Farm profitability now more crucial as direct support fades

As government debt skyrockets and direct support payments for farm businesses diminish, industry leaders have called for a greater emphasis on farm business profitability.

At the Ceres AgriStrategy conference on 4 December, Sir Peter Kendall, Bedfordshire farmer and interim chairman of Rothamsted Research, warned that government support is unlikely to provide solutions for agriculture in the same way it once did.

See also: Farm business incomes show partial recovery after sharp fall

Sir Peter highlighted that UK government debt had grown from roughly £1trn in 2010 to around £3trn today.

“My message is that the idea that we are going to solve any problems we have in farming by going to government… I think we are whistling [in the wind].”

Ceres Rural managing partner Charlie Ireland said the challenge for farm businesses now is to “produce more from less”.

Mr Ireland added that there was uncertainty over policy and funding within agriculture, and farm businesses should focus on what they can change, potentially with less support.

Chloe Timberblake, environmental adviser at Ceres Rural said: “There’s not no public money available; it’s just frozen at the moment.

“For 2028-29 there’s £2.25bn allocated for the Farming and Countryside Programme.

“That includes the Sustainable Farming Incentive (SFI), Higher Tier Countryside Stewardship and Landscape Recovery.”

Ms Timberlake calculated that this represents a 6% cut from the £2.4bn allocated in 2025, excluding inflation.

“By 2028, we’re going to have the majority of SFI schemes having reached their expiry, being a three-year duration. So much of that £2bn, we hope, will be available for new schemes.”

Ms Timberlake advised farm businesses to stay well informed of government grants, with the windows for applications likely to be very brief.

She also suggested farm businesses might consider whether wider private grant schemes are available, to obtain funding outside public schemes.

Total income from farming

However, Sir Peter added that he remained optimistic.

There had been lots of talk of a “crisis” in farming, but he said current total income from farming figures suggested the industry was pretty strong.

Although the arable sector was having a really disappointing time, dairy farmers had had a really good run-up until recently, potatoes and onions last year were a “bonanza”, and beef, pork and eggs were all performing well.

“My point is, let’s make sure we are not just telling people how bad things are.

“What we need to look at is the industry as a whole, and how we can develop more integrated systems to get more balanced farming for ourselves,” said Sir Peter.

Mr Ireland added that the forecasts for total income from farming were actually quite positive.

He said: “Essentially, the outlook for 2026-27 is really good. Dairy has had a great year, pigs are having a good year, poultry, eggs and broiler meat are having an exceptional year.

“If we look over the next one to two years, the milk price reduction in the past couple of months has knocked the edge off it.

“For general cropping we have seen that potato and onion prices have recently fallen off a cliff edge, unless you are on a contract.

“But the use of contracts is at all-time highs, with less being traded as free-buy.

“Arable is probably the area that is going to have the bumpier ride for a couple of years.”