Farming: Profitability and Sustainability

Thursday 8th January 2026 Written Statements

[The Secretary of State for Environment, Food and Rural Affairs (Emma Reynolds)]

Farmers are at the heart of our national life—for what they produce, the communities they sustain, and the landscapes and heritage they protect.

Since becoming Secretary of State, I have seen first hand the resilience farmers show in the face of increasingly unpredictable weather and volatile markets, their innovation in finding new ways to farm productively and sustainably in a changing climate, and their determination to build businesses that they can pass on to the next generation.

Today, at the Oxford farming conference, I have announced a package of measures that show that we are serious about partnership with the farming sector, that we are committed to giving farmers clarity and stability, and that we are backing farmers to grow their businesses with confidence and resilience.

We recognise that when British farming thrives, consumers benefit through affordable, high-quality food on their tables. We are ensuring that modern British agriculture is productive, profitable and sustainable.

This was a key theme in the recommendations from Baroness Batters’ farming profitability review. In response to the review, we are establishing the farming and food partnership board, which will give farmers and food businesses a seat at the table when policy is developed. This is part of our ongoing commitment to work in partnership with farmers to make decisions that stand for the long term—not just for the life of one Parliament, but for the future of British farming.

At the heart of this partnership is listening. I have listened to farmers and stakeholders about their concerns on proposed changes to inheritance tax. That is why we are increasing the inheritance tax threshold for agricultural and business property relief from £1 million to £2.5 million. This means that couples can now pass on up to £5 million without paying inheritance tax on their assets. That is on top of the existing allowances such as the nil rate band. Around 85% of estates claiming agricultural property relief, including those also claiming business property relief, will pay no more inheritance tax in 2026-27. The reforms will still ensure that the wealthiest estates do not receive unlimited relief.

Today’s package of announcements include:

An update on the sustainable farming incentive—This includes our plans to simplify the scheme and make it more focused, with fewer actions and less complexity. Previously, 90% of SFI spending went on fewer than 40 of the 102 actions available. A quarter of SFI money goes to just 4% of farms. This is not fair. We will improve fairness and accessibility, including by initially opening the scheme to small farms and those without an existing agreement. We are committing to greater stability following lessons learned from last year, including regular updates on uptake. These reforms will also help us to meet our ambitious environmental improvement plan target to double the number of farms delivering for wildlife, while recognising that food production is the core of farmer’s businesses. SFI needs to work alongside food production, not displace it, so we will also review how much land can be put into certain actions and review payment rates for others.

£30 million Government investment in the Farmer Collaboration Fund, funding peer-to-peer networks and advice—We are developing a new approach that will provide funding for existing and new farmer groups and networks. It will help those groups to connect with experts and create strong partnerships on everything from environmental action to business growth.

A long-term transformation of England’s upland areas—Our uplands provide over 70% of our drinking water, support rural livelihoods and are home to precious wildlife and beautiful landscapes; and they produce food in some of the most challenging conditions anywhere in the country. For too long, upland communities have faced a perfect storm of economic fragility, social isolation and environmental pressures. We want to change that. Over the last year, we have started working with social entrepreneur Dr Hilary Cottam on a new approach—an approach where we get out on the ground and talk directly to upland communities. This has been the beginning of what is a long-term partnership, starting with communities in Dartmoor, then Cumbria. Working with Hilary, our next step will be to develop a place-based approach for what these communities need, co-designing solutions to specific problems—for example, by developing a common understanding of how land can be best used for food production and the public good. Together, we will look at pooling public, private and third sector resources, laying the foundations for new income streams, and creating the skills and networks that let communities lead their own transformation.

Extending the Farming in Protected Landscapes programme for another three years, with £30 million in funding next year—This locally led programme has farmers and FiPL advisers working side-by-side to deliver projects tailored to their landscapes. This extension means farmers in our most precious landscapes can continue delivering for nature, climate and their communities.

We will continue to work alongside farmers to deliver these changes through our new farming and food partnership board, through peer-to-peer networks, through community-led change, and through engagement on the detailed changes to SFI.

We will provide the certainty farmers need to plan, giving clear timelines and a clear way forward with the farming roadmap later this year.

And we will deliver growth built on strong foundations: profitable farming and a thriving environment—not as a trade-off, but as two sides of the same coin.

[HCWS1230]