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UK agriculture finds itself in the midst of a period of significant change. Long-term changes to land use, an ageing workforce and dietary shifts will all influence the future of UK agricultural production.

Land-use change and self-sufficiency

The UK is in a period of land use transition driven by a new agricultural subsidy regime post EU exit, as well as long-term changes to UK diets.

The Government’s Environmental Land Management Scheme (ELMs), due to be implemented in full by 2027, is changing the economic model for farmers and land owners by de-linking subsidies from food production.

This means some land will be taken out of production where actions such as rewilding or tree planting that are rewarded through Sustainable Farming Incentives (SFIs) result in greater value or lower risk.

Some producers, such as those in the livestock sector and tenant farmers, are disadvantaged by the current funding regime. This may drive additional production and intensification, to make up for the loss in subsidy payments.

Environmental payments from outside the food system, such as offsets, can also offer opportunities for landowners to set aside portions of land.

In addition, environmental payments from outside the food system, such as offsets, can also offer opportunities for landowners to set aside land, taking it out of food production.

The full impact of the changing funding system on the UK’s agricultural capacity may not be understood for many years. Once productive capacity is lost it cannot quickly be recovered, and without a long-term agri-food strategy, business willingness to make long-term investment decisions on land use (e.g. covering machinery or infrastructure) will be limited.

Climate change will drive changes in the growing conditions in the UK, which in turn will impact land use. Some current growing areas may become unusable or economically unviable, whilst opportunities in other geographies and for different species or varieties may emerge.

It will be a challenge for the UK to reach its Net Zero targets and biodiversity ambitions without a shift in how land is used, reducing how much is used for agriculture. Non-food-related uses such as forestry and biofuels are now increasingly competing for land used by the food system.

The UK is self-sufficient in around 60% of all foods and 75% of indigenous food, a level the government has committed to maintain. However, this masks significant exposure to shortages at a category level. The UK is self-sufficient in just over 50% of vegetables and 16% of fruit. Any reduction in the productive capacity of UK agriculture will adversely affect self-sufficiency and have a detrimental impact on availability.

If the UK becomes more reliant on international partners to feed its population the risks associated with extreme weather and geo-political change become more acute and may also result in lower welfare, quality and environmental standards.

Dietary shift is required to address both environmental impacts and diet-related ill health. This will mean the quantity of meat consumed per capita will continue to decline whilst consumption of plant-based protein sources will increase the intake of vegetables. Supporting livestock farmers through this transition whilst developing a resilient horticultural supply chain will be key.

Low-carbon farming practices can balance the needs of the UK’s future food supply and help the UK to reach its Net Zero targets and biodiversity ambitions. It is essential through this transition that any land taken out of production does not cause irreparable harm to the UK’s food system over the long term.

Input challenges

Current agricultural practices are supported by a network of inputs, including energy, fertilisers and labour. These inputs are subject to volatile price changes and long-term demographic changes.

The UK food system is reliant on energy, it takes five calories of fuel energy, to create one calorie of food.  Food security is inherently linked to energy security.

Currently, the UK has only one operational fertiliser plant, producing ammonia nitrate from imported ammonia, rather than UK gas. Agricultural producers are therefore reliant on global imports, often from outside the EU, exposed to geo-political instability, and regulatory change such as the Carbon Border Adjustment Mechanism.

Another input challenge relates to labour. While UK agriculture has increasingly focused on automation and robotics, it still relies on 462,000 workers across the UK, and thousands of seasonal workers each year.

The seasonal worker visa scheme has proven a challenge for certain parts of the food system over recent years. However, it will be essential that the scheme is working well to ensure there are no labour shortages during critical harvest periods.

Demographic challenges are likely to exacerbate the current labour shortages. 42% of farmers are over the age of 60, a situation likely to worsen as the population ages. To counter this change, it is essential that farms are supported to transition to greater automation.

To successfully automate processes, farm businesses are reliant on access to capital and finance. The level of finance is often relatively large when compared to the size of the business. Tenant farmers, in particular, shoulder the most risk of not having sufficient assets to borrow against. High interest rates and increasingly variable crop yields may deter banks from lending to farm businesses.