Defra has published figures showing that the Farming and Countryside Programme (FCP) annual report has failed to fully spend its budget for three consecutive years.

The Westminster department had £130m left over in the 2023/24 budget, £103m in 2022/23, and £125m in 2021/22. The underspend has sparked anger within the farming community, which is frustrated by the government’s failure to allocate the full amount of the intended support to the rural economy.

NFU president Tom Bradshaw said: “We have repeatedly highlighted our concerns about an underspend, and at long last, we now have an honest admission of Defra's failure. A £358m underspend over three years is unacceptable and nothing short of a kick in the teeth for farmers and growers, who have faced years of uncertainty and loss of income during the agricultural transition.

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“Let’s be clear: this underspend hasn’t happened because the investment isn’t needed. It’s happened because the schemes to replace the Basic Payment Scheme (BPS) have not been completed in time, leaving many gaps and unanswered questions. We’ve flagged problems with the new Environmental Land Management (ELM) schemes from the start, and despite some improvements, a significant gap in spending remains, as the money saved from BPS reductions has been left sitting idle.

“For years, the NFU has pressed for the new schemes to be in place before BPS reductions began, to avoid this very issue and ensure funding wouldn’t go unspent when farmers needed it most. Twelve months ago, when further issues with the rollout of the new schemes emerged, we were a lone voice calling for BPS reductions to be paused. They weren’t, and farmers continued to face record inflation levels and devastating weather events. We’re now seeing the consequences, as confidence in the sector has collapsed.

“The risk posed to farm businesses by this cumulative lost income is well known. Recent research showed that, on average, upland businesses have lost 37% of their support payments under the 2023 scheme options, despite the public goods they deliver for the nation.

“In opposition, the Food Security Minister stated that any underspend in agricultural funding should be rolled over into future years and asked Defra for clarity on how this would be done. We now ask the same: for the government to carry this much-needed funding forward, so it can finally be used for its intended purpose – building resilience, investing in sustainable homegrown food production, and delivering on the government’s environmental targets.”

Meanwhile, NFU Scotland has sent a delegation to Westminster to lobby the UK Government for increased funding for the Scottish sector. Political affairs manager Beatrice Morrice said: “The Labour party manifesto for the recent General Election made no mention of its plans for agricultural funding. The current funding commitment only ran to the end of the previous parliament, so on October 30, farmers and crofters will understand more about the new UK Government’s plans. NFU Scotland submitted a detailed budget submission to the UK Government following Chancellor Rachel Reeves MP commissioning the Treasury to conduct a spending audit. Our submission underlined the need for increased, multi-annual, ring-fenced agriculture and rural economy funding in the budget.”