Farming Threats in the United Kingdom

by Stuart Harrison of Devon, UK

I like to think I’m a positive sort of chap… but sometimes, occasionally, it is hard to remain completely without foreboding. Today I am struck by the thought that British farming is under pressure, and many a small farmer here in the UK would agree that the current government’s policies are contributing to, or at the very least failing to alleviate, what many small farmers see as a crisis.

While I shall endeavour to keep this as balanced as I can, in truth I acknowledge I am biased in favour of my friends, neighbours, their families, and our traditional country ways.

Before I start beating a skeptic’s drum against the government’s role in all of this, I will try to give a fair hearing to the broader underlying pressures that farming both here in the UK, and indeed across the world, is facing.

Like Farmers almost everywhere, UK farmers are grappling with sharply increased costs for land, fuel, electricity, livestock, seed and machinery. As anyone in farming knows, when margins are already thin, policy uncertainty and shifts in prices become much more painful. Added to this is the fact that manpower pressures, in part due to an unwillingness of many in our society to see working in agriculture as a pleasurable job or a worthwhile career, has seen the available workforce dwindle. This is especially true for seasonal and horticultural work. Labour shortages are already affecting some crops and output, and many farmers are finding it difficult to see a way forward. Labour shortages unfortunately amplify risk, increase wage pressures, and reduce profitability. In addition, extreme weather events, unpredictable seasons, droughts, floods and other climatedriven risks are, and have always been, part of the farming equation in Britain and elsewhere. Farmers are resilient folk, who understand the pressures and who try to mitigate the worst effects, but the income from farming falls sharply when exceptional floods and gales hamper harvests. These risks mean that as farming incomes become less predictable, and reliance on alternative sources of income grows more attractive, longer-term investment in traditional farming becomes fraught.

I am a fan of the UK’s departure from the European Union (EU) for another layer of politicians and their aggrandising policy decisions made to enrich themselves at others expense I think we can all do without. The transition away from the EU’s Common Agricultural Policy (CAP) has generally been a good thing for smaller farms as it favoured mainly the huge landowners and massive industrial sized BigAgri units at the expense of the small local producer. Of course farmers face big structural changes in terms of the UK’s subsidy regimes and the shift away from the old schemes towards more targeted and environmental sensitive schemes, but on the whole it certainly seemed a good idea when the changes were first proposed. However, at the same time, the UK government began negotiating cheap imports from countries with lower production costs or fewer regulatory burdens, which placed huge pressures on domestic producers, especially smaller farms, and seemed to fly in the face of both good sense and their election promises.

The UK in terms of land mass is about the size of Oregon. UK farms are often small in size in comparison to many other parts of the world, and land values are high, often very high, with a great deal of pressure upon it for other uses. Many of the farms in the UK are family-run, often on low margins. The question of generational handover is key to their future viability, particularly as the average age of a UK farmer is 65 years of age. When tax, regulatory or other burdens increase, these businesses feel particularly exposed. In short, many UK farms are asset-rich (land value high) but cash-poor (operational margins thin), meaning that policy shifts that either assume wealth or lack flexibility often misread the real situation and cause difficulties.

With the general pressures facing UK farmers established, I’ll turn to how the Labour government’s decisions and timings are contributing to the difficulties of UK farmers. Several key areas have caused concern, namely subsidy and funding changes, changes to inheritance tax law, environmental support scheme closures, and altered planning regulation together with multiple international trade deals.

One of the most often cited criticisms of Prime Minister Kier Starmer’s administration is the change to the farming budget, how that funding is allocated, and the seeming lack of any intelligent analysis or logic to it. The Labour Party in the UK is rooted in the big industrial conurbations of the nation and few of their members or their voters seem to have any interest in the countryside, farming, or appear to know where and how their food is produced. When they took office the Labour Party began to boast to anyone interested about how they could cut the money paid to farmers and save the nation billions of pounds without having any negative effect upon the national food supply. This, despite their election promises to farmers. It has not gone well.

The government’s handling of the farm support schemes it did introduce has also triggered significant disquiet. In March 2025, the government announced, without any warning, the immediate closure of the Sustainable Farming Incentive (SFI) to all new applicants because the fund’s maximum limit had been reached. This decision caused huge disappointment among many farmers. Literally thousands of farmers had started applications on the expectation of payments promised by government, only to find new entries blocked. The National Farmers’ Union (NFU) described the outcome as threatening farm business investment, confidence, and the national food supply. The combination of scheme change, abrupt closure, and insufficient consultation or notice undermines the confidence of farmers who rely on predictable funding streams. The area of most severe concern has been around inheritance tax policy.

The Labour government has changed the tax laws for UK farms, and now all farms valued above the paltry threshold of £1million are subject to inheritance tax at 40% of the total value of the farm (IHT). A farmer dies, and 40% of his assets above £350K goes to the government. There are some ways to try to mitigate these effects, but with land prices averaging £10,000 per acre in the UK, you only need 100 acres of land irrespective of farm buildings, facilities and other assets to hit this threshold. Previously all farms were exempt from IHT. Farms were seen as an essential national resource which required protection to ensure the continuity of the food supply, management of the countryside and profitability of rural communities. Not any longer. Farmers will argue that because they are land-rich but cash-poor, any IHT liability will inevitably force the sale of land or break up of farms. This is already proving to be the case. From the government side, the aim of tax changes was to ensure fairness and avoid large investment based landholdings being passed on free of tax. However, the practical impact is destroying the concept of family farms and raising huge uncertainty by threatening farm viability, especially given that generational handover already often coincides with large investments or increased indebtedness. This in turn has created a sense among farmers that the government is less aligned with the realities of life in rural Britain and fails to recognise farming’s value, worth and contribution to a functioning society and the nation’s food security.

In the last few days before Christmas, the Government has finally relented and given in to the year-long demonstrations and lobbying pressure farmers have exerted on the inheritance tax changes. Many farmers were prepared to sell their farms to investment companies or to property developers rather than try to struggle on against government policy that sought to destroy their life’s work and deprive their offspring of a lifestyle that has been in the family for generations. The inheritance tax law now will be amended. Farms will now only pay inheritance tax if they are valued at over £2.5m and rather than the usual 40 per cent paid by other estates, farmers will pay inheritance tax at 20 percent. Beneficiaries will have ten years to pay the bill before any interest is incurred. The UK Treasury has said the change would help farmers who wanted to pass on their land to their children, but many larger farmers still believe this is a Labour Party conspiracy to deal a death blow to those they see as old fashioned dyed in the wool traditionalists. Time will tell what the result to U.K. agriculture will be.

Beyond direct agricultural policy, broader rural and planning policy decisions are also troubling farmers. The House of Lords has recently noted that government planning reforms and it’s overall economic policy decisions are negatively affecting farming, farmers, the available supply of higher quality farmland and the viability of rural communities. Farm businesses in the UK now increasingly rely on diversification (tourism, renewable energy, contract work) to supplement the low margins from their core production. If planning regimes become restrictive or aggressively seek to alter the use of farmland towards greater house building or infrastructure projects, and if the government’s word can no longer be relied upon, many farmers begin to wonder what is the point?

One very strong criticism of the Labour Government is that there is no coherent rural strategy. Even the governments own Members of Parliament and their committees question the lack of proper planning for the countryside, land use and the marginalisation and impoverishment of rural communities. Without a well thought out and coherent rural plan, decision making becomes patchy, and farming, which needs long-term investment and a degree of certainty, suffers disproportionately.

While not always directly attributable to one specific government policy, the context of global trade and competition is also relevant, and decisions (or indecisions) by governments matter. When domestic producers face imports produced under lower standards and at cheaper cost, their ability to compete weakens.

One government document has even suggested that some UK farms might be taken out of food production altogether to boost “naturefriendly land management” and “re-wilding,” the deficit being taken up by cheaper food available from overseas. I’m sure some people might make a case for the good sense of all this, but surely it raises questions about local food production, environmental concerns, and food security? If farmers feel that their products are undervalued by their native population, undercut by imports, and if domestic agricultural policy is shifting them toward environmental payments (winter wild bird food fields are now some of the most profitable crops in Britain,….sow it, leave it, and let the birds eat it!) where is the incentive to produce food? To an old fool like me, it seems very strange to do this rather than actually grow food for people in our own country. The reliance on overseas food sources, and the promotion of wildlife friendly environmental schemes surely makes “proper” farming harder and national security weaker?

It is often not just the policy changes themselves but the timing of them, the combination of multiple pressures, and the way these changes are being communicated, that makes the situation especially difficult. As noted before, many farm businesses operate on thin margins and with cost pressures mounting and a shift away from the more predictable support of past subsidy schemes toward newer schemes with either cancellations, delays or wild uncertainties, means that UK farming is less resilient to shocks than it was. When rising input costs, labour shortages, climate volatility, tax policy and subsidy uncertainty all hit at once, the cumulative effect is greater than the sum of it’s parts. Each alone would be manageable, but together, they become a serious risk to farm viability.

While the shift to environmental payments might be positive from a sustainability perspective, if they do not equally compensate or match the money made from normal farm production, farmers feel squeezed. The NFU has argued that a mismatch between environmental payment rates and normal farm production is already undermining national food production capacity and overall farm viability.

Multiple agencies report that business confidence in UK farming is low, with the NFU leaders saying farmer confidence has reached “rock bottom.” Lower confidence means less production, fewer innovations, more caution, less people interested in farming, all of which reduces competitiveness at a time when government policy has already squeezed it. So what then might be done to help? Given the fragility of the current situation, there are several areas where government policy might be altered to reduce hardship and future risks in the farming sector. The urgency is high, as farming underpins food security, rural economies and the nations land management.

In short Farmers need clarity about subsidy regimes, payment levels and eligibility well ahead of time. Abrupt closures or delays create investment paralysis especially for smaller farms who do not benefit from economies of scale. The government should surely try to work with farmers to map out a clear timetable of payments and support, with transparent bridging arrangements for those caught mid-transition rather than ambushing them with quick decisions and policies that appear designed to force them out of farming?

If domestic farmers are to compete, the government must ensure that trade deals, import standards, tax policy and retailer contracts do not disadvantage UK producers. Without this, even the best run farms may struggle to justify future investment or maintain viability.

A coherent rural strategy that includes agriculture, land use, environment, labour supply, and the skills necessary to support the rural economy is urgently needed. Frequent criticisms point to the complete absence of any considered analysis of farming in wider government decision making. Government education policy seems unable to recognise agriculture as a worthwhile career for young people at an early age and appears to assume that agricultural workers will just emerge.

To conclude, British farming is facing some pretty strong headwinds. The current Labour government, while not solely responsible for all these pressures, has made policy choices that have arguably amplified farming’s vulnerability. Farmers are not just upset about specific policies, they feel that the underlying contract between the nation and farming is being renegotiated without adequate warning, consultation or any transitional protection. In a sector where generational continuity, long term land stewardship, and long-term investment are key, this sense of instability is deeply damaging.

If the government wishes to support British farming through this challenging period, it will need to provide better clarity, stability, and fairness in recognising that many farmers are struggling to mange pressures from many different directions. Farmers just cannot absorb abrupt policy shifts without risk to food security, rural livelihoods and long term land management. It is not unreasonable for farmers to want to pass on their deep emotional attachement to their way of life and their land to their children. Even if your average Labour Party MP or voter seems to imagine that food comes magically wrapped in cellophane from a supermarket, and farms are just another accountancy asset, government ministers and the leaders of our nation must surely know better?