A third of British farmers are making a loss or breaking even as they struggle with the loss of subsidies and looming inheritance tax changes, a report on post-Brexit farming has found.
Only 14% of farmers surveyed for McCain Foods’ inaugural Farmdex report said they made 10% or more profit in the past year. In fact, many are making no profit at all, with 35% of the farmers reporting making a loss or breaking even.
The report found this was true even for the highest-valued farms, with 28% of farmers with farms valued at £2.5m or more reporting a loss or no profit in the past year.
When the UK was part of the EU, subsidies from the bloc for UK farmers made up as much as half of their income annually. After Brexit, the devolved British nations designed their farming payments regimes differently. In England, automatic payments were sharply cut and instead a scheme was introduced where farmers are paid for looking after nature under the environmental land management scheme (Elm).
This money is less than the subsidies they received from the EU, farmers say. The government recently cut England’s farming budget by £100m. The nature schemes have been beset by delays and the application process has been unpredictable. In March the scheme abruptly closed because the government said the budget had been allocated.
Some farms have lost out under the new scheme. A survey by the National Farmers’ Union found that on average, upland farming businesses lost 37% of their support payments under the current Sustainable Farming Incentive (SFI) – the first component of Elm – and Countryside Stewardship (CS) options.
The government’s decision to introduce inheritance tax for farms worth more than £1m led to outrage and protests as farmers said they would be unable to pass down the land to their children.
Farmers are also on the frontline of climate breakdown, in recent years facing extreme floods and droughts that have led to some of the worst harvests on record.
The McCain report reveals that 51% of farmers have considered leaving the industry in the past year due to financial strain, while only 4% believe current government support is adequate. More than six in 10 farmers (61%) say their work negatively affects their mental health, while more than a third endure 70-hour-plus working weeks during peak seasons.
James Young, the vice-president of agriculture at McCain GB&I, praised farmers’ “unwavering resilience” and said the findings must serve as a wake-up call.
He said: “As a company founded by farmers, we’re proud to stand alongside our 250 growers across the UK. It is crucial that industry bodies, the government and businesses work together to heed the warning signs in the Farmdex and take action to support farmers.”
A spokesperson for the Department for Environment, Food and Rural Affairs said: “Farming plays a central role in our mission to kickstart economic growth, with farmers acting as stewards for our nation’s food security.
“We know there are challenges in the sector and prolonged dry weather, followed by heavy rain, has hit some harvests. We are backing our farmers with the largest nature-friendly budget in history to grow their businesses and get more British food on our plates and are working with all food producers to make sure farmers get a fair deal.”
