Chancellor Rachel Reeves is reportedly considering slashing billions of pounds in farming subsidies, sparking fears that thousands of family farms could go bust. The move, expected to be announced in her spending review on June 11, would target the environmental land management (ELM) fund, which provides around £2.5 billion annually to farmers who adopt nature-friendly practices.
Whitehall sources suggest that after the current £5 billion commitment for subsidies covering last year and next year, only 'small farms' would continue to receive funding. Critics argue that axing the ELM scheme would be the 'final blow' for many farms, which already face the controversial 'family farm tax' introduced in the October Budget.
The National Farmers' Union (NFU) warned that around 40,000 farms rely on ELM payments to supplement their income. Andrew Clark, the NFU's policy director, said: 'There is a significant risk that thousands of family farm businesses would be at risk if this scheme were axed. What farmers and growers really need from this government is confidence and certainty that what they do for this country is valued.'
Liberal Democrat MP Alistair Carmichael, chair of the Commons environment, food and rural affairs committee, accused the government of betraying farmers. 'Since Labour came to power, they have had basic payments ended earlier than planned, they have seen the shambles of the sustainable farming incentive closed without notice – all on top of the family farm tax and other tax changes,' he said.
Former committee chair Sir Robert Goodwill, who runs a farm, warned that cutting subsidies could push many farms into the red. 'For many farms their profit line is less than the support they get, so it will push many farms below into the red. Potentially thousands,' he said. The government has defended its approach, but critics argue that food security is at risk if domestic farming is undermined.
