Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of the potential impact of (a) the war in Ukraine (b) the wider geopolitical situation and (c) the impact of the closure of the Sustainable Farming Incentive on (i) the cashflow of farming businesses and (ii) food security.

(a)

The war in Ukraine led to rising oil, fuel and energy prices, which created inflationary pressures right across the food chain. Farmers experienced higher energy and fertiliser costs; manufacturers experienced higher production costs; and importers and hauliers experienced higher transportation costs. All of these fed through to higher consumer prices.

The Institute of Grocery Distribution anticipates food price inflation in 2025 to average 3.4%, with a range of 2.4 to 4.9%.

Food chain businesses will be keeping a close eye on developments in Russia/Ukraine and the Middle East, and their potential to influence global energy and input prices.

(b)

Reliance on food supplies from Ukraine is low. Defra actively monitors risks to UK food security on an ongoing basis. The UK Food Security Report, which was published in December, examines past, current, and future trends relevant to food security to present a full and impartial analysis of UK food security.

While climate and geopolitical volatility have weakened aspects of food supply stability since 2021, food availability or the quantity of food available to the UK has been maintained thanks to continued resilience in food production and the global trading system.

(c)

Farm businesses with existing SFI agreements or submitted applications will see no change to their payments due to the announced closure of SFI. Forecasts published this week suggest that at the all-farm level agri-environment scheme payments are predicted to have increased substantially in 24/25.

On the 11 March 2025 we published forecasts which suggest that Average Farm Business Income has risen in 2024/25 across all farm types with the exception of cereal farms.