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Farmers can take cautious encouragement from the outcome of this week’s Spending Review, even as food and farming failed to get a direct mention in Chancellor Rachel Reeves’ speech. Defra has now confirmed it has secured what it calls a “strong financial settlement” for the sector.
In a climate of uncertainty and concern over potential cuts to farming support, Secretary of State Steve Reed is said to have successfully negotiated significant investment for UK agriculture and the countryside. Farmers will continue to receive an average of £2.3 billion a year through the Farming and Countryside Programme, matching levels seen under the previous government, alongside an additional £400 million earmarked for wider nature schemes.
One of the most notable developments, is the sharp rise in funding for Environmental Land Management (ELM) schemes. These payments, which reward farmers for environmental stewardship, are projected to “skyrocket” to £2 billion by 2028/29, representing a 150% increase since 2023/24.
In total, Defra says over £7 billion will be directed into nature recovery efforts, including £5.9 billion for environmental farming schemes, £816 million for tree planting, and £85 million for peatland restoration.
This investment is framed as the largest of its kind in UK history, with Defra positioning it as critical to meeting Environment Act targets on biodiversity and water quality.
Elliot Taylor, Partner and Farm Business Consultant, said:
“This settlement brings some much-needed clarity and continuity for farm businesses, especially around environmental schemes, which are an important income stream for many farmers going forward. While the absence of farming in the Chancellor’s address is disappointing, the funding commitments behind the scenes are a step in the right direction. Farmers should use this moment to assess where they can adapt, diversify, and make the most of these new opportunities when they come available.”
“Despite the political wrangling, the secured funding provides farmers with a more stable outlook for the medium term. Environmental scheme payments, in particular, may offer opportunities for farmers to engage with Defra’s evolving ELM programmes. It will be important to review your business plans to integrate nature-based opportunities. However, we must watch for further detail as many aspects of the settlement are yet to be clarified and will shape practical implications over the coming months. We will continue to monitor developments closely and provide updates as more detail emerges. In the meantime, we encourage farmers and landowners to focus on ways to improve business resilience in very challenging time.
For further information or guidance on how this affects your farming business, please contact the GFW Rural team. Rural – GFW
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