As part of the new scheme, direct payments to farmers will reduce by 55% by 2024– 25 before being phased out completely. The NAO found that the Department expects the reduction in direct payments and introduction of its replacement arrangements to have a significant impact on profits for many farmers. Analysis of the Farm Business Survey shows that many farmers are reliant on direct payments to support their business. Without direct payments, and with no other changes (such as income from new schemes or rent reductions), the average farm in England would have an annual net profit to the farmer of only £22,800, a fall of 53% compared to their average profit for previous years. Over a third (38%) of farmers would make a loss without direct payments.52 The Department asserted that farmers can manage the impact of these reductions through a range of business improvements. It expected that this would include both increasing income, such as through participation in schemes and other approaches such as diversification or exports, and reducing costs through improving productivity and reducing waste.53