The government has announced there will be 拢2.7 billion for farming and nature recovery, but within this there will be a 拢100 million cut to farming and countryside programmes. These programmes include SFI, Countryside Stewardship, Landscape Recovery and capital grants.
This comes after the agriculture budget has already been eroded over the past decade by inflation, significantly reducing its spending power.
The Chancellor also failed to reverse the devastating family farm tax which will mean many farming families continue to be left in the lurch, unable to afford the future tax bill.聽
鈥�From what we can see so far, the 拢100 million cut to farming means farmers and growers will need to do more with less.鈥�
NFU President Tom Bradshaw
Farmers must be included in investment plans
Responding to the Chancellor's spending plans, NFU President Tom Bradshaw said: 鈥淲hile 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 拢100 million cut to farming means farmers and growers will need to do more with less.聽
鈥淭he devil will be in the detail. And it鈥檚 essential that the Environmental Land Management schemes will be accessible for all farmers to get involved.
鈥淭his government has repeatedly said it wants to deliver growth, and the Chancellor said today that 鈥榚conomic security relies on our ability to make and sell more in Britain鈥�, something the food and drink sector is primed to do. It is already the UK鈥檚 largest manufacturing sector, worth some 拢148 billion to the national economy and supports more than four million jobs. To help increase this, farmers must be included in the government鈥檚 industrial strategy and given access to the new investment announced today to boost supply chain resilience, job creation, R&D and local economic growth.
鈥淭he Chancellor also said that this government 鈥榗ares about where things are made and who makes them鈥�. But British farmers and growers haven鈥檛 felt this applies to them, and their confidence has been battered by constantly moving policy goalposts, global volatility and unpredictable climate events. In this age of insecurity, will the government back up its manifesto statement that food security is national security, and give farmers and growers the certainty and confidence to invest in their future?鈥�
More detail needed
Tom said it was also 鈥渋ncredibly disappointing that the Chancellor didn鈥檛 take this opportunity to do the right thing on the family farm tax, especially when farmers and growers are the working people of Britain, the same people this government claims it wants to see thrive鈥�.聽
He added: 鈥淲e still need more details and the NFU will continue to work with Defra as it makes important decisions about how this money will be spent.鈥�
What does this mean for my business?
NFU Senior Economist Sanjay Dhanda delivers his analysis.
The Chancellor, Rachel Reeves, has set out the latest UK Spending Review which outlines the departmental budgets from 2025/26 through to 2028/29, offering a strategic overview of how public funds will be allocated in the years ahead.
This review takes place in a very tight fiscal context following years of inflation and anaemic growth alongside an increasing cost of servicing government debts which rose sharply during the Covid pandemic.
The UK Government has also committed to increasing defence spending in response to the increasing geopolitical threats, further pressurising spending elsewhere.
For British farming, this review represents a pivotal moment; it defines the fiscal parameters for environmental delivery, food security, rural growth, and farming resilience.
Defra鈥檚 overall budget was 拢7.3 billion in 2024/25 and is set to rise to 拢7.4 billion in 2028/29. When adjusted for inflation, this represents an average annual real-terms cut of 2.3%. Against a backdrop of sharp input cost inflation in agriculture, where prices have risen by 29.5% since January 2020, this further erosion in real spending power for the department presents a serious concern. For many farm businesses, a flat nominal budget as set out in the Spending Review equates to shrinking resource in practice.
ELMs figures misleading
A key pillar of Defra鈥檚 budget is the continued investment in ELMs, with funding set to rise to 拢2 billion by 2028/29 compared to the 拢1.8 billion earmarked in the Autumn 2024 budget. While the government has framed this as a significant uplift from the 拢800 million spent in 2023/24, this comparison is misleading as ELMs was not fully operational at that point, and de-linked payments absorbed a large share of funding.
The actual increase is a modest 拢200 million over four years 鈥� barely sufficient to keep pace with inflation, let alone scale up delivery. Furthermore, the government falls well short of the 拢2.7 billion needed to meet environmental targets, as estimated by the NFU. There is growing uncertainty over how the gap will be bridged.
Investment for rural communities
In terms of wider rural investment, the Spending Review brings both opportunities and omissions. On the one hand, programmes such as the Shared Rural Network and Building Digital UK will improve digital infrastructure, an essential component for the modern farm business.
On the other, key details remain absent around future productivity funding, a critical issue given that the NFU estimates 拢615 million will be needed to enhance agricultural productivity through innovation and investment.
Agri-food potential may go unrealised
The review also underscores broader economic ambitions, with investment in supply chain resilience, clean energy, and regional regeneration. Agri-food, as a sector contributing 6.5% to national GVA (Gross Value Added) and showing strong growth over the past decade, has a strategic role to play in these efforts.
Yet, unless this potential is matched by sufficient public investment, particularly in farm infrastructure and capability, it may go unrealised.
Biosecurity
皇家华人wrote to Border Security Commander highlighting the need to strengthen borders to protect national biosecurity. The Spending Review announced a further 拢280 million for the Border Security Command, however, this was in reference to people smuggling gangs and small boat crossings.
We will continue to press for a greater focus on measures to stamp out illegal meat imports.
Flooding
The Spending Review also included a 拢4.2 billion budget over three years, from 2026/27 to 2028/29, to build and maintain flood defences.
British Business Bank
A further 拢2.9 billion has been allocated for the BBB (British Business Bank), increasing its total financial capacity to 拢25.6 billion, which may offer more opportunities to support investment in agricultural businesses.
Economic security and resilience
Up to 拢257.8 billion capital will be invested through the NWF (National Wealth Fund), which prioritises investment in clean energy, digital and technologies, advanced manufacturing, and transport sectors. The government has also announced that the NWF will consider investments to support supply chain resilience across priority sectors.
The government highlighted the importance of taking action to protect economic security and promote its strategic strengths, with investment in technologies and supply chains driving resilient growth. If the government truly believes that food security is national security it will seek growth in the agri-food sector which contributed 拢147.8bn (6.5%) to national GVA in 2022, supporting more than 4 million jobs. With investment in the right places, there is an opportunity to deliver food security alongside economic resilience and growth.
Building Digital UK
For delivering the next phase in the transformation of the country's digital infrastructure, the Chancellor has allocated 拢1.9 billion. This includes connecting more homes and businesses to gigabit-capable broadband to reach 99% of UK premises by 2032.
Delivery in this Spending Review period will focus on achieving greater coverage in Scotland and Wales, and refresh delivery plans ahead of the Spending Review 2027; and importantly for the farming community, it will work to deliver the Shared Rural Network, to make sure most remote areas have 4G coverage.
Read the Treasury's statement in full at:聽.
