DAERA outlines capping rates for farm sustainability payments

The Department of Agriculture, Environment and Rural Affairs (DAERA) has outlined the capping rates that will be applied on Farm Sustainability Payments (FSP) from 2026 onwards.

The FSP is a scheme that forms part of DAERA’s new Sustainable Agriculture Programme (SAP), which was introduced in Northern Ireland at the start of this year.

According to DAERA, the FSP scheme serves as a “safety net payment” for farmers and aims to balance support with encouraging farm businesses to manage risks.

The department has implemented progressive capping on payments from FSP “to discourage unwarranted risk-taking and to encourage the management of risk within the business.”

Progressive capping

DAERA stated that FSP payments above £60,000 will be reduced from this year onwards.

The capping rates are set to be introduced gradually, with 50% of the final capping rate to be applied on all payments this year, while full capping rates will be applied every year post-2026.

Additionally, DAERA noted that capping does not affect the number of entitlements a farmer holds, the value of each entitlement, or the farmer’s ability to buy, sell or transfer entitlements.

How the capping rates will work

Here is an example of how capping will apply in 2026 if a farm received a FSP payment of £86,000:

The first £60,000 will receive no reduction;
The next £20,000 will be reduced by 10%, leaving £18,000;
The next £6,000 will be reduced by 20%, leaving £4,800;
This means that the total payment from FSP will be £82,800 after the 50% capping rates have been applied.

And here is how the same payment would be capped with the full capping rates that will be introduced from 2027 onwards:

The first £60,000 will also receive no reduction;
The next £20,000 will be reduced by 20%, leaving £16,000;
The next £6,000 will be reduced by 40%, leaving £3,600;
This means that the total payment from FSP will be £79,600 after the full capping rates have been applied.

Farm Sustainability Payment

DAERA has also advised farmers on how to find out if they are eligible for FSP and what they need to do to claim payments this year.

Participants of the scheme must be “actively farming and carrying out agricultural activity”, according to the department.

FSP applications must be submitted by May 15, 2026.

DAERA said that farmers must also activate at least three payment entitlements on at least 3ha of eligible land in order to receive FSP.

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For larger claims where a farmer is claiming 5ha or more, agricultural activity must be undertaken on at least 3ha.

Alternatively, if a farmer is claiming less than 5ha, they must be undertaking agricultural activity on at least 2ha.

DAERA added that participants must have management control of any land they use to activate entitlements.

Additionally, a farm business must have also met the Historic Years requirement if it was operating before December 31, 2021.

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