The UK agriculture sector is undergoing significant transformation as the government phases out the Basic Payment Scheme (BPS) and introduces the Environmental Land Management (ELM) schemes, including the Sustainable Farming Incentive (SFI)(1).

These reforms aim to tie financial support to environmental stewardship, rewarding actions such as improving soil health, enhancing biodiversity, and reducing carbon emissions(2).

However, the transition has not been without challenges. In March 2025, the Department for Environment, Food & Rural Affairs (Defra) announced that the £1.05 billion cap for the SFI had been reached, leading to the closure of the scheme to new applications(3). This sudden halt has left many farmers in limbo, particularly those who were preparing applications, and has raised concerns about the reliability of government support for sustainable farming practices(4).

Compounding these policy shifts are the increasing impacts of climate change. The UK has experienced unprecedented weather events, with 2023 being the second warmest year on record and 2024 following closely(5). Extreme rainfall has led to widespread flooding, leaving fields waterlogged and disrupting planting and harvesting cycles . These conditions have significantly affected crop yields, particularly for staples like wheat, with projections indicating a potential 25% loss in UK wheat production(6).

Moreover, intensive farming practices have led to soil degradation, with a recent report indicating that about 40% of British soils are degraded, compromising their ability to retain water and sequester carbon .This degradation exacerbates the effects of extreme weather and threatens long-term food security(7).

In response to these challenges, there is a growing emphasis on regenerative agriculture practices that focus on restoring soil health and enhancing ecosystem resilience. However, the success of these initiatives depends on consistent policy support and adequate funding. As the sector navigates these complex changes, the need for clear communication, reliable financial incentives, and robust climate adaptation strategies becomes increasingly critical.

Bibliography

1 Delinked payments: replacing the Basic Payment Scheme (Accessed May 2025) https://www.gov.uk/guidance/delinked-payments-replacing-the-basic-payment-scheme

2 Defra's Future of Farming in England (Accessed May 2025) https://www.gov.uk/government/collections/future-of-farming-in-england

3 Defra Farming Blog – Update on the Farming Budget( Accessed May 2025) https://defrafarming.blog.gov.uk/2025/03/12/update-on-the-farming-budget/

4 ‘Farmers' Fury as Nature Restoration Grants Run Out’ (Accessed May 2025) https://www.thetimes.co.uk/article/farmers-in-limbo-as-nature-restoration-grants-run-out-xbdp3vrqh

5 Met Office – State of the UK Climate (Accessed May 2025) https://www.metoffice.gov.uk/research/climate/maps-and-data/about/state-of-climate

6 ECIU – Climate and Food (Accessed May 2025) https://eciu.net/analysis/reports/2024/climate-and-food-home-and-away

7 ’European and British soils seriously degraded by intensive farming’ (Accessed May 2025) https://www.theguardian.com/environment/2025/may/09/more-than-a-third-of-uk-agricultural-soil-degraded-by-intensive-farming-report Business & Professional Services