Is Labour’s relationship with farmers beyond repair?

The closure of the sustainable farming incentive is the latest blow to a rural community at loggerheads with the government. Sean O’Grady looks at how we got here – and what happens next

Justified or not, many British farmers feel under siege, and their concerns are widely shared by a sympathetic public. Since Brexit they’ve had to cope with new free trade deals, notably with Australia and New Zealand, which threaten to undercut them, pricing pressure from the big supermarkets, the proposed move to reduce the inheritance tax exemption on agricultural assets, and the transition from support payments from the EU Common Agriculture Policy to UK- designed environmental land management schemes (ELMs). Now one of the main ELMs, the sustainable farming incentive (SFI) is to be closed. Tom Bradshaw, the National Farmers’ Union president, said it was “another shattering blow to English farms”. Trouble ahead, then…

What is the SFI?

The scheme pays farmers in England (to manage land to protect soil, restore hedgerows and boost nature recovery, and was an important component of post-Brexit farm support. There are about 37,000 SFI agreements in continuing operation – covering some 800,000 hectares of arable land now being cultivated without insecticides; 300,000 hectares of low-impact sustainable grassland; and 75,000 km of hedgerows protected and restored for wildlife and visual amenity.

What’s gone wrong?

It was too popular. The scheme had a cash limit, or cap, of just over £1bn for 2024-5 and 2025-26, and the cap has now been reached. This was announced at short notice and has upset the plans of many farmers to take up the incentive, resulting in lost income. (The other nations of the UK, each more dependent on farming than England, have their own, devolved arrangements.)

So another blow for rural communities?

Yes; but, arguably, no different in principle for others affected by restraint in public spending.

Any more bad news?

The chancellor, Rachel Reeves, gives no public indication of a change of mind on the “tractor tax” (inheritance tax exemption) but there are plenty of useful suggestions out there to make sure it doesn’t destroy family farms (such as freeing the tax liability until the land is sold for non-farming purposes). A putative, if distant, free-trade deal with America would badly further disadvantage UK farmers operating high environmental and animal welfare standards, with an influx of low-cost grains, poultry, meat and processed foodstuffs.

Does farming matter, politically?

Those affected “should” be marginal, given that only 1.4 per cent of the UK population derives its livelihood from farming – a tiny group. However, the number of people living in broadly rural communities is much larger; and people generally do care about farming. It may be more pertinent, even if a severe misunderstanding, that the electorate believes farming is in fact the second most important economic sector (just behind building, and way ahead of financial services or leisure). The public also backs the farmers’ protests by 58 per cent to 13 per cent (with 29 per cent “don’t know” – all polling from More in Common, November 2024).

Who’s winning?

After the July 2024 general election, rural and semi-rural communities are almost as likely to be represented, often for the first time, by a Labour MP, which makes things especially complicated. The same may be said for the Liberal Democrats and the Green, both quite “country” parties, and keen to stay close to their constituents’ concerns, while Reform UK hopes to win some county councils this May. So all the parties have a stake in this – but it’s greatly amplified by much more widespread public sympathy.

What does the PM say?

At the last PMQs, Keir Starmer declared: “The Budget provided £5bn for farming over the next two years – that is a record amount. We have set out a road map for farming, which has been welcomed by farmers, and many thousands of farms have benefited from the farming schemes.”

What will happen?

Hard to say, precisely, except that whatever softening of various policies Starmer and Reeves might now come up, the damage to their vote in the countryside looks irreparable. Many of those rural seats won for the first time in 2024 will mostly revert to the Conservatives next time round, even allowing for some splitting of the opposition vote in the East of England by Reform UK.