Farmers need a ‘new deal for profitable farming’, Minette Batters has urged, after her much-anticipated Farming Profitability Review was published today.
Such a deal should recognise “the true cost of producing food and delivering for the environment”, ex-NFU president Batters said, but in the face of the myriad challenges currently facing the farming sector, she warned “there is no silver bullet to achieving farming profitability”.
The long-awaited review by the former NFU boss laid bare the challenges facing farmers including increased input costs, changes to Inheritance Tax liabilities, and the abrupt closure of the Sustainable Farming Incentive in March.
Responses from across the farming sector to the review showed that “farmers and growers are feeling first-hand the impacts of volatility, extreme weather and rising input costs”, Batters said.
Citing Office for Budget Responsibility analysis, she warned soaring input costs, such as for machinery and wages, meant the cost of doing business will have risen by 30% between 2020 and 2026.
But with an annual Defra farming budget of £2.4bn for England, the amount paid to farmers in subsidies remained “almost the same” as it did in 2027, with additional competition from overseas markets also set to increase due to the impact of trade deals with the likes of Australia and New Zealand – which would soon benefit from a “fully liberalised trading relationship” with the UK.
“Against this backdrop of huge cost pressures, farmers and growers in England are being asked to do more to be compliant with environmental legislation and regulation, with less funding and no certainty,” the cross-bench peer’s report said, adding the sector needed funding of around £4bn to comply with that legislation.
“This government has made a commitment that food security is national security. This is an important first principle to establish but it needs to be implemented and embedded, with a long-term plan for farming and food production, that sits alongside restoring nature recovery,” Batters urged.
“On the evidence I have, it would be irresponsible not to recommend change. The economic funding models of the past are not fit for the future,” she added, while decrying the fact UK governments had “taken a relatively relaxed approach to food security”.
A “lack of clarity on finances and policy is leaving many farmers I’ve spoken to questioning the viability of their farming business”, Batters’ report explained.
“But the overriding message I’ve received from farmers is that they are deeply committed to their farms, they want farming to be a success and to leave their farm in a better place for the next generation.”
Restoring balance in food systems
The review gives 57 recommendations to the government with a core focus on restoring “balance between food production and the environment”.
“They should be treated as two sides of the same coin,” said Batters.
Her recommendations fall into 15 categories, including: valuing food & farming, resilience and viability, nature, British brand, supply chain fairness, people, labour & skills, tenancy, tax incentives, grants & investment, planning, energy & connectivity, water, and regulation.
Among her recommendations, she has called for the measurement of the value of primary and secondary processing in GDP, the provision of a scheme for those that have not accessed the SFI previously, and the establishment of the Great British farm advisory board to increase and track progress of sales of British raw ingredients, with the goal of growing exports by 30% by 2030.
Batters also stressed there had to be a reduction in unfair supply chain practices by extending the remit of GSCOP and Groceries Code Adjudicator, bringing both within Defra and enshrining the watchdog’s so-called ‘golden rules’ into law.
Batters added there had to be closer relations with farmers and local government to champion English food producers.
She additionally pointed to other reviews which are yet to be acted on by the government, including John Shropshire’s review into labour shortages. Recommendations from that review should be implemented alongside an extension to the Seasonal Worker Visa Scheme to nine months to cover the whole season.
Farming & Food Partnership Board
In response to the review’s publication, the government has announced the launch of a Farming & Food Partnership Board designed to drive growth, productivity and long-term profitability across the sector.
It will be chaired by environment secretary Emma Reynolds with farming minister Angela Eagle as deputy.
It will bring together senior leaders from farming, food production, retail, finance and government to take a practical, partnership-led approach from farm to fork to strengthen food production, which has declined from 78% in 1984 to 65%.
The government is yet to respond to the review’s findings more extensively but has said “action is already underway to give farm businesses the stability they need”.
“Baroness Batters’ review underlines the need for government, farming and the food industry to work much more closely together,” said environment secretary Reynolds. “That is exactly what the new Farming & Food Partnership Board will do.
“This is about serious action to remove barriers, unlock investment and make the food system work better, so farm businesses can grow, invest and plan for the future with confidence.”
The board will focus on removing barriers to investment, improving how the supply chain works and unlocking growth opportunities in primary production and processing, the government said.
It added it will have an emphasis on supporting agricultural productivity, homegrown British produce and strengthening food security, starting with horticulture and poultry “where these is significant untapped potential to increase homegrown production”.
“I’m pleased that the secretary of state recognises the need to establish a new approach to growing the British brand at home and abroad by producing, creating and selling more from our farms in a measurable way,” said Batters. “With ever more extreme weather, the horrific, ongoing war in Ukraine and 69.7 million people in the UK, now is the time to deliver food security as national security.”
The full response to the review will be set out through the 25-year Farming Roadmap which is due for publication next year.
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