The agriculture budget and sustainable farming did not merit a mention in Chancellor of the Exchequer Rachel Reeves’ Spending Review statement yesterday (11 June). Rural watchers were compelled to pore through the full Treasury document to discover that the review imposes a real-terms cut of 2.7% to Defra’s current spending budget over the period to 2028-29. 

The past fortnight saw fevered speculation about a government plan to slash the budget for sustainable farming initiatives needed to meet its own targets for nature restoration. The Guardian reported on 28 May: 

“Sources at the Department for Environment, Food and Rural Affairs (Defra) confirmed the post-Brexit farming fund will be severely cut in the review on 11 June… 

“Labour promised a fund of £5bn over two years, from 2024 to 2026, at the budget, which is being honoured, but in the years following that it will be slashed for all but a few farms…  Defra sources said the scheme will be targeted at “small farms”; wealthier farmers will not be eligible, meaning larger farms will be locked out of nature-friendly farming incentives.” 

In the event, the review did nothing of the kind. There was no discussion of restricting eligibility based on farm size and the budget for the Farming and Countryside Programme, which includes most agri-environment schemes, was set at an average of £2.3 billion a year. In 2023-24, the last year for which figures have been published, actual spending within that programme totalled just over £2.1 billion so in cash terms the budget is set to increase. In that year, however, the then-government was criticised for underspending its budget owing to slow uptake of the new schemes, with the shortfall returned to the Treasury. 

The government has been able to boast of “increasing support for nature-friendly farming through Environmental Land Management schemes from £800 million in 2023-24 to £2 billion by 2028-29.” This is primarily the result of the old area-based Basic Payment Scheme being wound down and transitioned to targeted agri-environmental support, which has been planned since the Agriculture Act was passed in 2020. It would be ill-advised to regard it as a particular success of the present administration. 

Spending reviews are not what the government terms ‘fiscal events’, occasions for changes to the tax system, meaning there was never any realistic prospect of relief from the despised Family Farm Tax. Nevertheless, the pressure must continue. Lobbying from the Countryside Alliance and others is bearing fruit, most recently through the publication of the cross-party, Labour-majority EFRA Select Committee report that called on the government to delay its plans and change them. 

This Spending Review may have proved a damp squib, with Defra cuts not as severe as feared but detail still needed on where efficiencies will be found, but the Countryside Alliance will continue to fight the corner of farmers and rural communities in all parts of the United Kingdom.