With the new Labour government facing a £22 billion budget shortfall, the Chancellor may target agriculture for potential savings.

Reports indicate that funding for a scheme designed to incentivise nature-friendly farming practices could be cut by £100m, putting Labour at risk of breaking a key manifesto pledge.

Over 20 Conservative MPs have urged the government to preserve funding for the Environmental Land Management Scheme (ELMs), highlighting its critical role in supporting farmers' livelihoods amid rising costs.

MORE NEWS | SAWS plans must be looking to the future

MORE NEWS | Starting gun fired on NFU Scotland elections

On September 11, the NFU celebrated ‘Back British Farming Day’ by calling on the government to establish a renewed multi-annual agriculture budget of £5.6bn.

In a letter to the Prime Minister, NFU President Tom Bradshaw emphasized the need for the government to honour its commitments to farmers and growers. He stated: “The Prime Minister’s words were warmly greeted at NFU conference. We finally heard recognition of the certainty and stability needed for a thriving food and farming industry – one that underpins the UK’s largest manufacturing sector food and drink which delivers £148bn to the economy.

“However, reports that the government is considering cutting the agriculture budget due to the failure of the previous government leading to an underspend of £358m, and a possible review of Agriculture Property Relief (APR) are incredibly concerning.

“We are asking for a renewed multi-year annual agriculture budget of £5.6bn, not because it would be nice to have, but because it is an essential investment to deliver the government’s environmental goals, increase growth and support the economic stability of farm businesses.

“The loss of APR could mean family farms, who are vital to producing food for the country, providing jobs and looking after our countryside, having to be sold to cover the costs. Changes would amount to a “Family Farm Tax”. It would also have a devastating impact on tenant farmers3 and new entrants.

“At a time when farmer and grower confidence is at its lowest on record due to high production costs, extreme weather and uncertainty during the agricultural transition, we need stability and that genuine partnership with government which the Prime Minister spoke of.”

The NFU has also urged individuals in the sector to engage with their political representatives. Farmers across the UK have publicly appealed to the Chancellor, warning that funding cuts could lead to food shortages and increased unemployment within the industry. Instead of reductions, they are advocating for a budget increase that reflects the inflation rates impacting farm businesses.

This call for a sustainable, long-term increase in agricultural funding has been further highlighted by the NFUS, emphasizing the critical need for stable support in the sector.

NFUS’s political affairs manager Beatrice Morrice said: “We continue to call at every opportunity on the UK Government to announce an increased, ring-fenced multi-annual commitment for agriculture in the Budget on October 30.

“Scottish agriculture generates a gross output of over £3.3 billion annually and directly employs over 67,000 people – making it the mainstay of most rural communities. As the first and most critical link, agricultural production provides the seed corn for approximately £16 billion of output from the Scottish food and drink sector – an industry that employs over 130,000 people.

“We recognise the wider pressure on public finances; however, any reduction would have an extremely disproportionate and potentially devastating impact on farmers and crofters.

“Providing a clear commitment in this budget will demonstrate that the UK Government supports the long-term future of the country’s primary producers and is standing by its own statement that food security is national security.

“It would see farmers and crofters continue to produce high quality food, help to tackle climate change, and support biodiversity recovery. As our sector supports thousands of jobs and supply chain companies both upstream and downstream of the farm gate, this is not just important for the future of farmers and crofters but rural communities as well.”

Given the likelihood of changes to inheritance tax the NFU have called for confirmation that Agricultural Property Relief (APR), which provides exemption for farmland, will be kept in place. They suggest that the removal of APR would produce limited financial reward through tax and seriously reduce rentable land for farmers.

The NFU is also asking the Treasury to:

• Ensure adequate resourcing to deliver the Farming and Countryside Programme, maintain flood defences and deliver the government’s new bTB strategy.

• Introduce enhanced capital allowance to incentivise investment in climate smart investments.

• Only apply Capital Gains Tax increases to non-business or short-term gains.

• Commit to a full consultation ahead of the proposed abolition of the Furnished Holiday Lettings regime.

• Confirm a further round of the Rural England Prosperity Fund.