Key Takeaways
- The farming sector is facing significant challenges, including rising costs and extreme weather conditions
- Uncertainty surrounding the sustainable farming incentive scheme and inheritance tax changes is creating concern among farmers
- The sector is in need of reform, with a focus on fairness in the supply chain, planning reforms, and growing exports
- The government is taking action on planning reform, supply chain fairness, and supporting exports, but more needs to be done to address the sector’s concerns
- Farmers are seeking a fair return for their produce and the ability to run thriving, profitable businesses without relying on state handouts
Introduction to the Challenges Facing the Farming Sector
The farming sector is facing a multitude of challenges, including a sharp rise in costs and increasingly extreme weather conditions. According to a recent review, the sector is "bewildered and frightened" about what the future holds. The review highlights the significant ongoing concern among farmers, with many questioning the viability of their businesses let alone their profitability. The uncertainty surrounding the closure of applications to the sustainable farming incentive scheme and proposed changes to inheritance tax has added to the sector’s woes.
The Impact of Rising Costs and Environmental Legislation
The review notes that costs in the farming sector are expected to be 30% higher in 2026 than they were in 2020. This is a significant increase, and one that will have a major impact on the sector’s profitability. At the same time, the £2.4bn farming budget for England has remained largely unchanged since 2007, despite the fact that farmers and growers are being asked to do more to comply with environmental legislation. This lack of funding and certainty is creating a perfect storm for the sector, with many farmers struggling to make ends meet.
The Need for Reform and Support
The National Farmers’ Union (NFU) has welcomed the review, stating that it is a "thorough and complex report" that recognizes the need for reform. The NFU’s president, Tom Bradshaw, highlighted the importance of fairness in the supply chain, planning reforms, and growing exports. However, he also emphasized the need for immediate action to address the sector’s concerns, including providing clarity and certainty on the future of the sustainable farming incentive and addressing the issue of inheritance tax changes. The Country Land and Business Association (CLA) has also welcomed the review, with its president, Gavin Lane, stating that it is time for "urgent action" to address the sector’s challenges.
The Government’s Response
In response to the review, the government has stated that it is taking action on planning reform to make food production a clearer priority. This includes speeding up the development of on-farm reservoirs, polytunnels, and farm shops, and making it easier for farmers to invest. The government is also stepping up action on supply chain fairness, tackling barriers to private finance, and supporting exports and new markets. While these measures are a step in the right direction, more needs to be done to address the sector’s concerns and provide the support that farmers need to thrive.
The Importance of Fairness and Profitability
At the heart of the sector’s concerns is the issue of fairness and profitability. Farmers want to be able to run thriving, profitable businesses, earning a fair return for what they produce. They do not want to rely on state handouts, but rather to be able to succeed on their own merits. As Baroness Batters, the chair of the review, noted, "Farmers don’t want handouts from the state, they want nothing more than to run thriving, profitable farming businesses, by earning a fair return for what they produce." This is a sentiment that is echoed by farmers across the country, and one that the government and other stakeholders must take seriously if they are to address the sector’s challenges and ensure its long-term viability.