Time for a budget reset: government must 'put its money where its mouth is' on sustainable farming

Bolstering the farming budget is key to kickstarting long-term growth in the rural economy and delivering on many of the government’s environmental targets, the Country Land and Business Association (CLA) has argued.

The CLA has set out a powerful rationale for increasing the agriculture budget to £3.8bn a year by 2027/28, offering the industry the certainty it needs at a vital time of the transition process post-Brexit.

Traditionally farmers received payments based on acreage, but since Britain left the EU the government has been gradually moving to a new era of sustainable food production coupled with public payments for public goods in areas such as soil health, wildlife habitats, flood management and access to nature.

But the budget has remained static since 2014, despite spikes in inflation, major shifts in the importance of domestic food security in a changing world, and recognition of the scale of the environmental challenges.

The CLA has been calling for the budget to be increased from the current £2.4bn a year to £3.8bn a year in England, with a £1bn budget in Wales, and has now set out a detailed analysis of why this is so important.

CLA President Victoria Vyvyan said: “Landowners can feed the nation and improve the environment – but they can't do it on a shoestring budget. Now is the time for a budget reset. Without the right economic, regulatory and political conditions, farmers will be unable to deliver on the multitude of societal demands that ultimately fall on them.

“The CLA applauds the government’s ambition to reverse the decline in nature, pave the way to a net zero society, create homes and jobs in the rural economy, clean up rivers and stimulate health and wellbeing by encouraging community engagement on our farms – with the right budget.

“Many CLA members are already well along this journey – but we need to know the government's ambition is real and not just a good soundbite.

"Achieving their aims costs money, and the Treasury must put its money where its mouth is.”

The CLA’s paper sets out an assessment of the ringfenced agriculture budget needed in England to meet the government’s commitments from 2025/26. The analysis is built on enhancing current schemes and programmes to meet the objectives, rather than on radical re-invention.

The budget covers three main programmes:

• The Environmental Land Management (ELM) programme, looking at new and existing schemes to incentivise and reward actions that contribute to the Environment Act targets. For example, the Sustainable Farming Incentive (SFI) is the cornerstone of payments for public good, and we estimate it will cost £1.5bn by 2027/28. High take-up of the various schemes will be crucial if the Environment Improvement Plan 2023’s targets are to be met.
• The Nature for Climate programme, which covers woodland creation and peatland restoration.
• The rural productivity, resilience and food security programme, covering areas such as technology availability and uptake, skills, training, research and innovation.

The Basic Payment Scheme (BPS), the previous system of support, is being phased out and while it was worth £1.84bn in 2020 it will fall to £480m in 2025/26 and disappear completely by 2028/29.

Victoria added: “The CLA believes that ELM schemes have the potential to lead the world in creating a sustainable agriculture and environment policy, and we support the direction of travel.

“But with BPS payments disappearing, farming businesses must not face a financial cliff-edge. The new government says it wants to support farmers and boost Britain’s food security, and now is the time to put their money where their mouth is and back them to grow food and improve our environment.”