Government announces no change to agriculture budget

Published on : 30 Oct 2024

The new Labour government had been urged by farm leaders to deliver an increased agriculture budget

The government has announced it will freeze the agriculture budget at the same level it has been since 2014, despite repeated calls for a significant increase to it.

Chancellor Rachel Reeves confirmed a freezing of the Defra budget - a cut in real terms - in today's (30 October) autumn budget.

The new Labour government had been urged by farm leaders to deliver an increased agriculture budget, as farmer confidence is at its lowest level since records began.

Industry groups had written to the chancellor outlining the need for a budget of at least £5.6 billion.

The funding pot for agriculture in the UK has remained constant at £2.4 billion since the 2019-2024 parliament.

During this time, inflation has led to a 44% increase in farm costs, but the budget has remained the same.

The Country Land and Business Association (CLA), which represents thousands of landowners, said the decision would have 'consequences for hard-pressed farmers. '

CLA President Victoria Vyvyan said: “The government was elected on a promise of growth, but has done nothing for the countryside but freeze the agriculture budget and raise taxes.

"It will damage confidence and stability across the industry, risking farm profitability. It could hit sustainable food production and undermine improvements to wildlife habitats, flood management and access to nature.

Defra’s proposal to accelerate the end of direct payments would also be 'incredibly damaging' to investment in farming and diversified businesses.

A recent CLA survey found that 80% of respondents said they ‘strongly agreed’ or ‘agreed’ that payments through farming schemes are critical to ensure their businesses stay viable.

Ms Vyvyan added: "There is enormous growth potential in the countryside, but we need the government to be working with us, not against us.”

Before the budget, the NFU said an increased agriculture budget was about "safeguarding our food security and our farmed environment".

It said: "It is funding that will give farmers the confidence to invest for the future and help make the government's aims around sustainable food production, affordability of food, energy security, the environment and net zero possible."

The NFU had commissioned the Andersons Centre to model the public funding required to deliver the government’s ambitions for agriculture in England over the 2025 to 2030 period.

The research indicated that an annual agricultural budget for England of around £4 billion would support the delivery of a balanced agricultural policy.

Respecting the nature of devolved government, the NFU and Andersons estimated that this would translate to a UK-wide budget of around £5.6 billion.