A third of British farmers have reported making no profit or suffering financial losses over the past year, as the agricultural sector grapples with post-Brexit subsidy cuts, inheritance tax changes, and the growing impact of climate change, according to a new report.
McCain Foods’ inaugural Farmdex report reveals that just 14% of UK farmers made profits of 10% or more in the past year, while 35% either broke even or recorded losses. Even among the country’s wealthiest farmers — those with holdings valued above £2.5 million — 28% said they failed to make a profit.
Before Brexit, EU farming subsidies accounted for nearly half of annual farm income in the UK. Since leaving the bloc, however, support payments have been drastically reduced and replaced with the Environmental Land Management (Elm) scheme, which pays farmers for environmental stewardship rather than output. Farmers argue that these payments are significantly lower than those previously received under the EU’s Common Agricultural Policy, leaving many struggling to remain viable.
In England, automatic direct payments have been sharply reduced, and delays in rolling out nature-based schemes have compounded financial pressures. Earlier this year, the government even paused Elm applications after announcing that the budget had been fully allocated.
A National Farmers’ Union (NFU) survey found that upland farming businesses have been particularly hard hit, losing an average of 37% of their support payments under the current Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) schemes.
Farmers have also expressed anger over the government’s decision to apply inheritance tax to agricultural land worth more than £1 million, warning that such a move could make it impossible for families to pass farms down to future generations.
The sector’s struggles are further intensified by extreme weather events linked to climate change, including floods and droughts that have devastated harvests in recent years.
The Farmdex report found that more than half of British farmers — 51% — have considered leaving the industry in the past year due to financial hardship. Only 4% said they believe current government support is adequate, while 61% said their work has had a negative effect on their mental health. Over a third reported working 70-hour weeks or more during peak seasons.
James Young, vice-president of agriculture at McCain GB&I, commended farmers’ “unwavering resilience” but warned that urgent action is needed.
He said: “As a company founded by farmers, we’re proud to stand alongside our 250 growers across the UK. It is crucial that industry bodies, the government and businesses work together to heed the warning signs in the Farmdex and take action to support farmers.”
A spokesperson for the Department for Environment, Food and Rural Affairs (Defra) said: “Farming plays a central role in our mission to kickstart economic growth, with farmers acting as stewards for our nation’s food security. We know there are challenges in the sector and prolonged dry weather, followed by heavy rain, has hit some harvests. We are backing our farmers with the largest nature-friendly budget in history to grow their businesses and get more British food on our plates.”
