Concerns over budget cuts in UK farming have been allayed as the government commits funding of £7.4 billion (US$10 billion) in 2028‑29 as part of yesterday’s spending review.

Concerns over budget cuts in UK farming have been allayed as the government commits funding of £7.4 billion (US$10 billion) in 2028‑29 as part of yesterday’s spending review.

The National Farmers unio (NFU) and other actors in Britain’s agri-food supply chain were bracing for severe cuts to the farming sector, but Chancellor Rachel Reeves revealed the higher-than-expected funding for the Department for Environment, Food and Rural Affairs (Defra).

Defra says this settlement maintains the government’s “steadfast commitment to farming, food security, and nature’s recovery.”

Investing in farming

The government will invest more than £2.7 billion (US$3.6 billion) per year in sustainable farming and nature recovery from 2026‑27 until 2028‑29. Farmers will benefit from an average of £2.3 billion (US$3.1 billion) through the Farming and Countryside Programme and up to £400 million (US$542 million) from additional nature scheme.

“This will boost productivity and protect the natural ecosystems underpinning food production and broader economic activity, supporting food and economic security. This includes increasing support for nature-friendly farming through Environmental Land Management schemes from £800 million (US$1 billion) in 2023-24 to £2 billion (US$2.7 billion) by 2028‑29, sustained by rapidly winding down subsidy payments that do not provide a return on investment,” says a Defra statement.

Reaction to the funding

The NFU has welcomed the government’s announcement of an overall settlement of £7.4 billion (US$10 billion) but remains cautious. 

The £2.7 billion (US$3.6 billion) for farming and nature recovery is significant, but the unio flags that within this, there will be a £100 million (US$135 million) cut to farming and countryside programs. 

This comes after the agriculture budget has already been eroded over the past decade by inflation, significantly reducing its spending power. These include the Sustainable Farming Incentive, Countryside Stewardship, Landscape Recovery, and capital grants.

Moreover, the Chancellor also failed to reverse the “devastating” family farm tax, another bone of contention for the NFU.

NFU president Tom Bradshaw says, “While the Defra Secretary of State has listened and managed to maintain the overall funding for farming and nature recovery, from what we can see so far, the £100 million (US$135 million) cut to farming means farmers and growers will need to do more with less.”

“The devil will be in the detail. And it’s essential that the Environmental Land Management schemes will be accessible for all farmers to get involved.”

“This government has repeatedly said it wants to deliver growth, and the Chancellor said that ‘economic security relies on our ability to make and sell more in Britain’, something the food and drink sector is primed to do. It is already the UK’s largest manufacturing sector.”

“To help increase this, farmers must be included in the government’s industrial strategy and given access to the new investment announced to boost supply chain resilience, job creation, R&D, and local economic growth.” 

Closing a financing hole 

Sajeev Mohankumar, senior technical specialist at the FAIRR Initiative, praises the Government decision to increase the budget for nature-friendly farming from £1.6 billion (US$2.1 billion) to £2 billion (US$2.7 billion) by 2028/29. He believes this funding will close a gaping financing hole on nature-based solutions.

“The Chancellor’s decision is vital to protecting the UK’s food security, economic resilience and ecosystem stability. Climate finance for agriculture remains shockingly low, with even fewer capital flows directed toward nature-based solutions. It is reassuring that the Chancellor has decided to maintain these valuable payments.” 

“The environmental land management fund is vital to ensuring the viability of nature-friendly farming, and evidence already demonstrates that these green subsidies are delivering measurable environmental improvements on the ground.”

“Nature-based solutions outperform tech-based interventions, they are cost-effective and scalable, with nearly all major nature-based solutions ready for market deployment, given the right incentives.”

“As well as creating more stable incomes for farmers, reports show that land managed for ecosystem services is commanding a premium, as markets and regulations begin to favor environmental outcomes. The financial rationale to favor nature-positive subsidy models is clear. It is encouraging that the Chancellor has recognized this economic opportunity.”