Agricultural Policy Monitoring and Evaluation 2025

28. United Kingdom

Main findings

Support to agriculture

The Producer Support Estimate (PSE) in the United Kingdom amounted to 14.6% of gross farm receipts in 2022-24, well below the 30% measured for the European Union in 2000-02.

The two largest items in the PSE are decoupled payments and Market Price Support (MPS). Observed market price support over the period is estimated at 32.8% of the PSE and is most relevant for livestock products, some of which are still subject to tariffs and tariff rate quotas (TRQs). A large share of the budgetary support to producers is provided through payments based on historical entitlements and non-commodity criteria, which account for 41.6% and 5% of the PSE, respectively. One recent trend has been the rapid increase in payments based on non-commodity criteria as a proportion of the PSE over the last three years.

Support for general services (General Services Support Estimate, GSSE) was 2.3% of the value of agricultural production in 2022-24, below the OECD average of 3.5%. Expenditures on agricultural knowledge and innovation systems account for about half of the GSSE, while inspection and control services account for most of the other half. The Total Support Estimate (TSE) for agriculture represented 0.2% of Gross Domestic Product (GDP) on average in 2022-24, about half the OECD average.

Key recent policy changes

The roll-out of Environmental Land Management (ELM) schemes has continued in England, with coverage now exceeding half of the farmed land in England. The list of environmental actions has been expanded, with over 100 actions on offer under the Sustainable Farming Incentive and Countryside Stewardship scheme. Additional resources have been made available to support the adoption of new technologies and practices through the Accelerating Development of Practices and Technologies fund which aims to provide smaller-scale innovation grants to support technology adoption.

The Agriculture and Rural Communities (Scotland) Act 2024 was passed by the Scottish Parliament in June 2024 laying the foundations to enable the Scottish agricultural policy framework to gradually transition towards a new support system where farmers meeting essential minimum standards receive a universal payment and additional support is provided if certain nature, climate or habitat conditionalities are met. As of 2025, the first new conditions, including the start of the Whole Farm Plan, have been introduced in Scotland for farmers to receive the Basic Payment Scheme.

In Wales, a new Integrated Natural Resources Scheme was introduced in 2025 to support farmer-focused partnerships delivering nature-based solutions. A new Sustainable Farming Scheme, currently in its preparatory phase and starting in 2026, will pay farmers for delivering sustainable land management outcomes, such as water quality, biodiversity, and animal health.

In Northern Ireland, the Farm Sustainability Transition Payment (FSTP) was introduced in January 2025 and is intended to support the transition from the Basic Payment Scheme to the Farm Sustainability Payment which is planned for introduction in 2026. In addition, several schemes have been launched in 2025 to improve the efficiency of the agricultural sector while simultaneously addressing environmental outcomes. This includes, among others, the Suckler Cow Scheme that provide direct support to farmers conditional on them reducing the age of first calving of replacement heifers and the calving intervals of suckler cows.

Assessment and recommendations

• The United Kingdom’s agricultural sector faces the challenge of reducing further the environmental footprint of the sector while achieving output growth. Total factor productivity (TFP) growth has remained low over the past decade at less than half of the global average rate. While nutrient balances have declined over the past few decades, the pace of this improvement has slowed and nutrient balances per hectare remain significantly higher than the OECD average. At the same time, agriculture’s share in total GHG emissions has been rising, reaching 10% in 2023.

• A significant acceleration in the pace of agricultural GHG emission reductions is required for the United Kingdom to achieve its net-zero emissions target by 2050. Achieving this will require accelerating the rate of land-use changes in favour of carbon sinks (e.g. woodland creation, afforestation, peatland restoration), as well as achieving sustained productivity increases and addressing the highly variable levels of agricultural productivity across different farm-types in the United Kingdom. The continued roll-out of Environmental Land Management schemes in England, Scotland’s Preparing for Sustainable Farming programme, and various grant schemes to encourage sustainable farming practices in Wales and Northern Ireland are promising steps for enhancing sustainable productivity growth. However, governments should carefully monitor the outcomes of these initiatives and ensure the additionality and permanence of environmental improvements over the long run.

• Recent examples of trade-related measures aiming to increase the sustainability of the agrifood system are key for achieving the UK’s climate ambitions. The United Kingdom should build on these examples and move towards implementation and operationalisation of announced measures.

• Investments in R&D and innovation are essential for supporting sustainable productivity growth. While public expenditures for the Agricultural Knowledge and Innovation System (AKIS) relative to the size of the sector are above the OECD average, it is important to ensure that the funding to AKIS is stable, sufficient, and directed towards fostering innovations and technologies that are able to deliver on sustainable productivity goals.

• The transition towards new domestic schemes is creating short-term challenges: these schemes need to be scaled up and to provide sufficient incentives for farmers to adopt sustainable production practices at scale.

• Persistently high MPS for some commodities can contribute to higher food prices and discourage farmers from changing production in response to climate and environmental concerns, or from adopting sustainable practices supported through other measures. The United Kingdom should consider phasing out this price support to further advance progress on sustainable productivity growth.

Development of support to agriculture

Table 28.1. United Kingdom: Estimates of support to agriculture

Million USD

	2000-02	2022-24	2022	2023	2024p
Total value of production (at farm gate)	..	41 077	40 063	39 808	43 360
of which: share of MPS commodities (%)	..	71.25	76.09	71.83	65.84
Total value of consumption (at farm gate)	..	45 877	43 222	44 456	49 953
Producer Support Estimate (PSE)	..	6 632	6 056	7 018	6 821
Support based on commodity output	..	2 159	1 585	2 720	2 173
Market price support¹	..	2 159	1 585	2 720	2 173
Positive market price support	..	2 178	1 585	2 720	2 228
Negative market price support	..	-18	0	0	-54
Payments based on output	..	0	0	0	0
Payments based on input use	..	553	551	563	544
Based on variable input use	..	466	478	485	434
with input constraints	..	0	0	0	0
Based on fixed capital formation	..	77	67	74	90
with input constraints	..	0	0	0	0
Based on on-farm services	..	10	6	4	20
with input constraints	..	0	0	0	0
Payments based on current A/An/R/I, production required	..	829	712	820	955
Based on Receipts / Income	..	0	0	0	0
Based on Area planted / Animal numbers	..	829	712	820	955
With input constraints	..	161	350	107	26
Payments based on non-current A/An/R/I, production required	..	1	4	0	0
Payments based on non-current A/An/R/I, production not required	..	2 756	2 987	2 587	2 694
With variable payment rates	..	0	0	0	0
with commodity exceptions	..	0	0	0	0
With fixed payment rates	..	2 756	2 987	2 587	2 694
with commodity exceptions	..	0	0	0	0
Payments based on non-commodity criteria	..	333	217	328	455
Based on long-term resource retirement	..	87	67	92	102
Based on a specific non-commodity output	..	182	51	181	314
Based on other non-commodity criteria	..	64	99	55	39
Miscellaneous payments	..	0	0	0	0
Percentage PSE (%)	..	14.56	13.60	15.91	14.21
Producer NPC (coeff.)	..	1.06	1.04	1.07	1.05
Producer NAC (coeff.)	..	1.17	1.16	1.19	1.17
General Services Support Estimate (GSSE)	..	955	946	931	987
Agricultural knowledge and innovation system	..	475	452	441	533
Inspection and control	..	366	373	351	373
Development and maintenance of infrastructure	..	42	47	67	13
Marketing and promotion	..	71	74	71	67
Cost of public stockholding	..	1	0	0	3
Miscellaneous	..	0	0	0	0
Percentage GSSE (% of TSE)	..	12.58	13.51	11.70	12.63
Consumer Support Estimate (CSE)	..	-2 851	-2 031	-3 501	-3 022
Transfers to producers from consumers	..	-2 179	-1 585	-2 720	-2 232
Other transfers from consumers	..	-697	-450	-784	-857
Transfers to consumers from taxpayers	..	5	3	3	8
Excess feed cost	..	20	0	0	59
Percentage CSE (%)	..	-6.21	-4.70	-7.88	-6.05
Consumer NPC (coeff.)	..	1.07	1.05	1.09	1.07
Consumer NAC (coeff.)	..	1.07	1.05	1.09	1.06
Total Support Estimate (TSE)	..	7 591	7 005	7 951	7 816
Transfers from consumers	..	2 876	2 035	3 504	3 089
Transfers from taxpayers	..	5 412	5 420	5 232	5 584
Budget revenues	..	-697	-450	-784	-857
Percentage TSE (% of GDP)	..	0.22	0.22	0.24	0.21
Total Budgetary Support Estimate (TBSE)	..	5 431	5 420	5 232	5 643
Percentage TBSE (% of GDP)	..	0.16	0.17	0.15	0.16
GDP deflator (1986-88 = 100)	..	275	259	278	286
Exchange rate (national currency per USD)	..	0.80	0.81	0.80	0.78

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for the United Kingdom are: wheat, barley, oats, rapeseed, sugar, milk, beef and veal, sheep meat, pig meat, poultry and eggs. The method for estimating MPS changes between 2020 and 2021. Market Price Differentials (MPD) for the United Kingdom are assumed equal to those of the European Union for the years until 2020, while they are calculated from UK domestic and reference prices from 2021.

Source: OECD (2025), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

In the United Kingdom, policy areas that affect agriculture support are characterised by different levels of devolved competence, with some areas being under the competence of the UK Government, while others are devolved. Agricultural policy is devolved to the governments of Scotland, Wales, and Northern Ireland, while the Department for Environment, Food and Rural Affairs (Defra) has responsibility for England’s agricultural policy. However, not all policy areas and instruments affecting agricultural support are devolved. Trade policy and elements of tax policy remain reserved matters (i.e. not devolved) and, in the agricultural sector, Defra remains responsible for setting some standards and regulations at national level and representing the United Kingdom in international negotiations.

Following the United Kingdom’s departure from the European Union, and as a consequence leaving the Common Agriculture Policy, the UK nations agreed a non-legislative framework for intra-UK co-operation on agricultural support (the Agricultural Support Framework). This provides the principles and procedures or co-operation while recognising each nation’s retention of the powers to create and implement national legislation in relation to agriculture.

The United Kingdom’s departure from the European Union also led to new trading relationships with the EU and other international trade partners. The exit from the single market has led to the negotiation of an EU-UK Trade and Cooperation Agreement. This agreement provides for zero tariffs and zero quotas on all trade of EU and UK goods that comply with the appropriate rules of origin. However, custom formalities apply between the United Kingdom and the European Union. A special set of arrangements, known as the Windsor framework, was agreed for goods entering Northern Ireland. The Windsor Framework ensures the seamless flow of goods from Northern Ireland to Great Britain while safeguarding the island of Ireland's single epidemiological unit and biosecurity. It implements various schemes that reduce checks on goods from Great Britain destined for Northern Ireland, while those heading to Ireland or the EU are subject to EU customs rules and procedures. Outside of the EU, the UK has also signed several Free Trade Agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), as well as bilateral FTAs with Australia and New Zealand.

The UK uses different policy instruments to support its food and agriculture sector, ranging from UK-wide trade and tax policies to country-specific agricultural support measures and policies. Border measures, in particular tariffs on imported products, are an important form of support. The average applied most-favoured-nation (MFN) tariff on agricultural imports in 2023 was 9.2%, substantially higher the 2.9% faced by non-agricultural products (World Trade Organization, 2024[1]). Certain sectors deemed as sensitive face higher levels of protections, including dairy (27.3% on average), Live animals and meat (15.7%), sugars and confectionery (20.2%), and cereals (10.5%) (WTO, 2024[2]). The UK also has in place tariff rate quotas (TRQs) for the import of certain agricultural and food products, including several livestock and dairy products (e.g. poultry, pig meat, milk products, eggs) and cereals. Given the trade agreements in place, these quotas do not apply to the EU. Some other trade partners are also exempt from the TRQs for specific products.

Tax policies, in particular tax exemptions or lower tax rates also constitute an important form of support, with several tax policies benefiting agriculture producers directly (OECD, 2020[3]). These policies typically seek to either improve the profitability of the sector, reduce the volatility of profits, or increase the incentives for innovation. Starting with income taxation, while farmers pay income taxes on farm incomes subject to normal progressive rates, they benefit from a feature that allows them to smooth profits. Specifically, farmers are allowed to average profits over several successive years when there is at least one year with zero profits or when average past profits fall below a given threshold. There are also several tax exemptions or reductions in place. Farm vehicles are exempt from annual vehicle tax and agricultural land and associated buildings used for production are exempt from the annual local property tax. Farmers also benefit from reduced taxes in some areas, including flat rate VAT schemes with reduced VAT rates (at 4%), and reduced excise taxes on diesel fuels for use on-farm. With regards to tax relief, eligible companies can claim tax relief on R&D expenditures and there is also tax relief on inheritances for agricultural businesses. The latter implies that farmers can pass on some agricultural property free of tax, thereby encouraging family continuity and generational renewal.

There is a diverse pattern of support for the food and agriculture sector in the United Kingdom in terms of targeted financial assistance and policy implementation owing to the devolved competences in these areas.

England

Under the seven-year Agricultural Transition Programme (2021-2028) financial support is moving from direct payments to farmers to instead pay farmers to take actions that benefit the environment. Under the Agricultural Transition Programme, the Environmental Land Management (ELM) schemes (Countryside Stewardship, Sustainable Farming Incentive, and Landscape Recovery schemes), provide ongoing payments for a range of environmental actions and one-off productivity and innovation grants to help farmers invest in new technologies and innovation to deliver more sustainable farming.

The ELM schemes are delivered through a combination of scheme payments and one-off grants, and deliver targeted outcomes relating to biodiversity, water quality, climate change adaptation and mitigation, air quality, natural flood management, coastal erosion risk mitigation, animal health and welfare, as well as access and heritage. As of 31 March 2025, there were over 70 000 live agri-environment agreements, covering more than 50% of farmed land in England.

• The Sustainable Farming Incentive scheme pays farmers for actions that support food production, farm productivity and resilience, whilst protecting and enhancing the environment. There are currently over 100 actions on offer under the new scheme, including on soil health, moorland, hedgerows, integrated pest management, farmland wildlife, buffer strips, and low input grassland.

• The Countryside Stewardship scheme pays farmers, land managers and foresters for more locally targeted actions relating to specific locations, features and habitats, including woodlands and water courses. The scheme supports a range of enhanced environmental outcomes, from restoring habitats to creating woodlands to managing flood risk. There were over 35 000 live Countryside Stewardship agreements in place across England as of April 2024.

• The Landscape Recovery scheme provides funding for long-term, large-scale projects that help farmers and land managers to produce environmental and climate goods on their land through bespoke 20+ year agreements.

Beyond measures that benefit individual producers, several budgetary support items also directly benefit the sector as a whole in areas such as Agricultural Knowledge and Innovation. On agricultural knowledge and innovation, some of the key mechanisms in place to support innovation and knowledge are:

• The Farming Investment Fund, launched in November 2021, provides support for farmers to improve productivity and enhance the environment. It does so via two strands. One such strand is the Farming Equipment and Technology Fund, which provides grants of up to GBP 25 000 (USD 31 953) for the adoption of sustainable technologies and practices (including minimum tillage, regenerative farming among others). Second, more complex higher-value investments with the potential to bring transformational improvements to business performance and the environment are funded through the Farming Transformation Fund provides grants of up to GBP 500 000 (USD 639 047). These grants are based on a set of themes including water management, improving farm productivity, slurry storage and improving calf housing.

• The Accelerating Development of Practices and Technologies (ADOPT) fund seeks to provide farmer-led, smaller-scale innovation grants, for farmers and farm businesses to trial new technology and methods on their farm. These productivity grants will be available to finance projects ranging from GBP 50 000 (USD 63 905) to GBP 100 000 (USD 127 809) starting from spring 2025.

• The Farming Innovation Programme is a grant scheme that provides funding to develop new, innovative methods and technologies that benefit farmers in England such as feed additives, vertical farming, robotics and automation, novel breeding, genetic technologies, and alternative on-farm proteins.

In England there are several large food and nutrition programmes in place to support infants, children, pregnant women, and vulnerable consumers. There are several schemes currently in place that provide Free school meals. During the school year, free school meals (FSM) are provided to children in state-funded schools in England (from reception to secondary school), with over 2 million children eligible for FSM. During school holidays, funding is also provided for free meals through the Holidays activities and Food Programme which provides free or low-cost activities and free meals to children during holidays. Funding for healthy foods aimed at pregnant women and children under four years old from very low-income households is also provided through the Healthy start scheme. Finally, the Household support Fund also provides support to low-income households to assist them with a purchase of three types of items, namely Food, utilities, and clothes during winter.

Scotland

The Agriculture (Retained EU Law and Data) (Scotland) Act 2020 enables the continuation of former CAP schemes beyond 2021, and allowed Scotland to maintain policy stability until 2025. Gradual changes to the way in which the government supports farming and food in Scotland will be introduced as of 2025. These changes will begin the gradual shift from the legacy EU schemes to a tier-based system of agricultural support. Tier One will provide direct payments to support active farming, starting with the current Basis Payment Scheme (BPS) and adding new conditions over time. Tier 2 will provide additional funding to support farmers and crofters to do even more for climate and nature. Tier 3 will support action that protects habitats or species or improves business sustainability. Tier 4 will help to grow skills and capabilities, which will include training and advice.

Area-based decoupled direct payments to producers remain the largest single support measure targeting individual farmers that meet certain eligibility criteria (e.g. minimum farmed area, maintain land in Good Agricultural Environmental Condition). As of 2025, however, additional conditionalities will apply as farmers will be expected to carry out specific farm plans and audits (e.g. carbon audit, biodiversity audit, soil analysis, animal health and welfare plan or integrated pest management plan) in order to access the Basic Payment Scheme. Additional conditions designed to protect peatlands and wetlands will also be introduced to cross compliance for 2025.

Coupled support, while smaller in magnitude, also plays a role in supporting specialist farmers in specific types of livestock subsectors, such as beef and sheep. The Scottish Suckler Beef Support Scheme (SSBSS) is a direct payment to support specialist beef producers and is based on the number of animals provided that certain conditionalities are met (e.g. calving intervals, breed, birthplace). Similarly, the Scottish Upland Sheep Support Scheme provides complementary funding based on the number of ewe hoggs and is aimed at supporting sheep farmers who farm in Scotland’s rough grazing areas.

Budgetary support measures that benefit the sector as a whole also target areas such as Agricultural Knowledge and Innovation. The Farm Advisory service under the Scottish Rural Development programme supports farmers in a number of areas, including integrated land management plans, specialist advice, as well as mentoring new entrants to the sector.

Food and nutrition-specific measures are also in place to support consumers in Scotland. Free School lunches are available to all children in primary (i.e. from primary one to five) attending schools funded by the Scottish Government and this support is also provided for eligible children from low-income families beyond primary (i.e. from primary five to secondary six). Food aid is also provided through Best Start Foods, which provides pregnant women and families with children under the age of three who receive certain benefits with a pre-paid card that is topped up every four weeks to purchase a range of healthy foods.

Wales

Area-based decoupled direct payments remain an important feature of support to agriculture in Wales. The Basic Payment Scheme has continued in Wales and will remain in place until 2026, providing stability and certainty to farmers following the United Kingdom’s transition out of the European Union. The Agriculture (Wales) Act 2023 was passed in the Welsh Parliament (the Senedd) on 17 August 2023. The act provides powers to amend legislation derived from the European Union and establishes Sustainable Land Management (SLM) as the overarching framework for future support to agriculture in Wales.

As of 2025, there will be a preparatory phase to a new Sustainable Farming Scheme to help calculate an appropriate payment methodology for the scheme, with the final scheme expected to be published in summer 2025. The Sustainable Farming Scheme will require all participants to follow the schemes’ twelve universal actions in various areas (e.g. benchmarking, animal welfare, etc…) to access the basic payment. In addition to the basic scheme, the Sustainable Farming Scheme will also include complementary schemes, launched in 2025, that will provide further funding opportunities to progress with additional economic, environmental and social actions.

Budgetary support measures and regulations in Wales also support measures that specifically target Agricultural Knowledge and Innovation in agriculture as well as plant and animal health. The Control of Agricultural Pollution Regulations aims to reduce the impacts of agricultural inputs on water quality, ecosystems, and soils. Funding is also provided to finance plant and animal health activities, including the rolling out livestock vaccination schemes. Finally, the Farming Connect advisory service focuses directly on the adoption of sustainable practices that improve livestock health and productivity.

Northern Ireland

A new programme of farm support, the Sustainable Agriculture Programme (previously the Farm Support and Development Programme), that has been developed in co-design with the Northern Ireland agricultural industry and other key food and environmental stakeholders, was launched on 29 January 2025. The overall aim is to transition to a more sustainable farming sector by seeking to implement policies and strategies that benefit the climate and environment while, supporting the economically and socially significant agri-food sector in Northern Ireland. The Programme has four main outcomes of improved environmental sustainability, enhanced productivity, stronger resilience and an effective functioning supply chain.

A simplified Basic Payment Scheme continued in Northern Ireland until the end of 2024, providing stability and certainty for farmers. As of 2025, the Farm Sustainability Transition Payment (FSTP), part of the Sustainable Agriculture Programme was introduced. The FSTP is intended to support the transition from the Basic Payment Scheme to the Farm Sustainability Payment which is planned for introduction in 2026.

Decoupled area-based direct payments to producers constitute an important component of agriculture support in Northern Ireland. As of 2025, the FSTP is the largest area-based scheme available in Northern Ireland and it consists of a basic payment provided that eligibility criteria are met. The Environmental Farming Scheme, which is closed to new applications, is another area-based scheme with specific environmental objectives (e.g. GHG emission reduction, water management and quality, biodiversity). Typically, EFS agreements have a five-year duration and are aimed at supporting farmers and land managers to carry out beneficial farming practices on their agricultural land, by promoting practices, including establishing woodlands, or organic farming. The EFS is closed to new applications but the Scheme will continue until the last agreements end on 31 December 2029. The Farming with Nature Package, which is a key component of the Sustainable Agriculture Programme, is being rolled out in phases from 2025 to replace EFS. Young farmers can also be supported through the Young Farmers’ Payments which provides an annual top-up to the FSTP for eligible young farmers. 2025 is the final year for new applications to the Young Farmers Payment.

Coupled direct payments are used to support specific crops and livestock activities. The Pilot Protein Crop scheme provides complementary support to farmers for growing beans, peans and sweet lupins. Coupled support in the livestock sector is provided through the Beef Sustainability Package which comprises two main schemes. The first such scheme is the Beef Carbon Reduction Scheme which aims to reduce emissions and the carbon footprint of the beef sector by supporting farmers to slaughter beef cattle at an earlier age. The Suckler Cow scheme will start in 2025 and intends to provide direct support to farmers to reduce the age of suckler cows at first calving of heifers and the calving intervals of suckler cows.

Beyond direct support to farmers, a significant share of budgetary support is also allocated to animal and plant health, with the Northern Ireland Department of Agriculture, Environment and Rural Affairs being responsible for delivering essential plant and animal health services, including inspection and certification. One of the largest programmes in this area is the Bovine TB control programme, which makes annual testing of all herds mandatory. Finally, funding for innovation is also provided, notably through the Agricultural Research and Development Scheme (Northern Ireland) 2024-2029, which aims to fund research and development in relation to agricultural products.

Climate targets

In 2019, the United Kingdom became the first major economy to legislate a binding target to reach net-zero emissions by 2050. Since then, it has progressively increased the ambition of its Nationally Determined Contribution (NDC), aiming to reduce GHG emissions to 81% below 1990 levels by 2035. Across the United Kingdom, responsibility to reduce GHG emissions in agriculture is devolved, with each nation free to develop its own strategy to reach the target. Scotland, Wales and Northern Ireland have released separate Net Zero Strategies that detail how they will contribute to the UK’s Net Zero target. With regards to mitigation measures in agriculture, Wales seeks to reduce emissions from soils (e.g. cover crops), livestock (e.g. diets, animal health, and breeding), as well as address aspects related to waste and manure management. In Scotland, the Climate Change Plan update sets out policies and proposals for reducing emissions from agriculture. The next Climate Change Plan is in development with a draft expected to be published in 2025 which will ensure the agriculture sector continues to play its part in meeting Scotland’s ambitious net zero national target by 2045. In Northern Ireland, the first Climate Action Plan covering the period 2023-2027 is currently being developed. This will set out policies and proposals to reach emissions and delivery the carbon budget for this period.

The third National Adaptation Programme, which sets out the government’s policies to adapt to climate change, was published in July 2023. It set out a range of measures to improve resilience and adaptation to climate change across the food supply and farming sector. 

Policies for trade and sustainability in agro-food markets

In recent years, the United Kingdom has sought to increase the sustainability of its agrifood system through trade-related measures and has done so through different types of measures, ranging from strengthening the national regulatory framework to make imports more sustainable to the explicit mention of environmental provisions in several of its most recent trade agreements with its partners.

The Environment Act passed through Parliament in October 2021 and received Royal Assent in November 2021. Schedule 17 on the “Use of Forest Risk Commodities in Commercial Activity” requires secondary legislation to be operationalised. The UK held a General Election on 4 July 2024 and the new government will set out their approach to addressing deforestation in the UK’s supply chains in due course. Once operationalised, Schedule 17 of the 2021 UK Environmental Act will make it illegal for larger businesses operating in the United Kingdom (i.e. those with a turnover above GBP 50 million, i.e. USD 64 million) to use key forest risk commodities produced on land illegally occupied or used. This act explicitly targets several commodities, including palm oil, non-dairy cattle products (i.e. beef and leather), cocoa and soybean. It requires businesses to undertake a due diligence exercise on the supply chains, assessing the risk of non-compliance with local laws, and taking steps to mitigate such risks. It also requires the enforcement authorities to monitor and investigate compliance and provides for the application of sanctions in the event of the breach (Frezal and Deuss, 2025[4]).

In the transport sector, the Renewable Transport Fuel Obligations (RTFO) has been in place since 2008. It is one of the government’s main policies for reducing GHG emissions from transport and it encourages the use of renewable fuels for use in UK transport. Specifically, the regulation requires suppliers of transport fuel in the UK to source at least a certain percentage (15.6% in 20251) of the fuel they supply from sustainable low carbon fuel. The scheme is a certificate trading mechanism, with certificates issued for the supply of eligible low carbon fuel and it applies to road vehicles, non-road transports, and maritime transport (if fuel used is a renewable fuel of non-biological origin). If certificates have been awarded based on an erroneous application they will be revoked and in the event of serious non-compliance, civil financial penalties may be imposed. As of 2023, renewable fuel accounted for 7.5% of total fuel for road and non-mobile machinery, with an estimated GHG emission saving of 7.9 million tonnes of CO₂eq.

Beyond changes in domestic regulations, the United Kingdom has also used trade and economic agreements to embed sustainability issues.

Several of the UK’s Trade Agreements and Economic Partnership agreements include sections or articles related to promoting the sustainability of traded agricultural products. Close to 20 agreements between the United Kingdom and its partners that included environmental co-operation provisions covering sustainable agriculture were identified. While most of these agreements generally included provisions related to sustainable agriculture as a general objective, several of these contain provisions that relate to more specific sub-areas, such as irrigation, biodiversity, technology, or climate change mitigation (Frezal and Deuss, 2025[4]). For instance, the FTA with New Zealand contains provisions related to both climate change and biodiversity. The Trade and Cooperation Agreement with the European Union contains provisions related to both sustainable consumption and production. Agreements with Georgia, Moldova and Viet Nam also include provisions related to biodiversity and ecosystems. Finally, agreements with countries in North Africa and the Middle East (including the trade agreement with Israel) frequently included provisions related to co-operation in the areas of soil and/or water management.

In addition to this, at least three recent agreements, including the FTA between the United Kingdom and New Zealand as well as two EPAs (with Kenya and CARIFORUM states) include provisions related to domestic environmental policies. These agreements establish specific Committees (UK-CARIFORUM EPA), sub-committee (UK-NZ FTA), or dialogues (UK-KEN EPA) to oversee the implementation of the FTAs’ Sustainable Food Systems and Environment Articles or Chapters, respectively (Frezal and Deuss, 2025[4]).

In October 2024, the UK Government outlined its plans to introduce a Carbon Border Adjustment Mechanism (CBAM) by 2027. The UK CBAM is expected to target five sectors at high risk of carbon leakage, including the fertiliser sector and is expected to cover both direct and indirect emissions related to production processes of CBAM goods. The United Kingdom is planning to set a sector-specific CBAM rate which will be adjusted on a quarterly basis and will reflect the price faced by producers under the UK Emissions Trading System (ETS).

Recent policy developments

Domestic policy developments in 2024-25

England

Several changes were announced to policies supporting the food and agriculture sector These include:

• Doubling the management payment for the Sustainable Farming Incentive so those with existing agreements receive up to an extra GBP 1 000 (USD 1 278) and extending it to Countryside Stewardship mid-tier for the first year of agreements starting by March 2025.

• Introduction of a 25% limit to the amount of land that a farmer can put into 6 of the SFI actions which remove land from food production. The underlying rationale for this is to ensure that the right balance continues to be struck between protecting and improving the environment, food production and food security.

• Under the Countryside Stewardship scheme, new Mid-Tier agreements were merged into the Sustainable Farming Incentive scheme, ensuring that the Countryside Stewardship is now composed of Higher Tier agreements covering more complex environmental management.

• The Environment Agency (an executive non-departmental public body sponsored by Defra) published the Rural Flood Resilience Partnership: 2024 to 2026 work plan and a GBP 75 million (USD 96 million) grant scheme to Internal Drainage Boards (IDBs, i.e. local public authorities that manage water levels) is being delivered by Defra.

• In April 2024, the Environment Agency published its Methane Action Plan.

• New actions to reduce flood risk, restore and enhance floodplains, and better storage of flood water were introduced under the integrated Sustainable Farming Incentive and Countryside Stewardship.

• Following the Genetic Technology (Precision Breeding) Act of 2023, which provides a new regulatory regime in England for organisms produced through precision breeding technologies such as gene editing, regulations and draft guidance documents have been issued in 2025. Before a Precision Based Organism can be used in a food or feed product it must be authorised under the Genetic Technology (Precision Breeding) Regulations 2025. In addition to the regulations, draft technical guidance has also been provided on how to notify Defra of the release of precision bred organisms or submit a marketing notice.

• In autumn 2024 the UK Government announced that from 6 April 2026, the full 100% relief from inheritance tax will be restricted to the first GBP 1 million (USD 1.28 million) of combined agricultural and business property.  Above this amount, landowners will access 50% relief from inheritance tax and will pay inheritance tax at a reduced effective rate up to 20%, rather than the standard 40%. 

Scotland

The Agriculture and Rural Communities (Scotland) Act 2024 was unanimously passed by the Scottish Parliament on 18 June 2024. The Act has been designed to provide an adaptive support framework for farmers and crofters that can respond to future social, economic, and environmental changes. It enables tailored provisions to be produced and adapted as required. As of 2025, the Scottish agricultural policy framework will gradually transition from the legacy EU schemes to a tier-based support system.

As part of the transition to the new framework of policy support in the agriculture sector, the following changes have been implemented:

• Starting from 2025, farmers and crofters who want to receive support through the Basic Payment Scheme (BPS) must comply with additional conditionalities. These include additional cross compliance conditions (restrictions to carrying out certain activities on peatlands and wetlands) to protect these environmental assets.

• The completion of least two of five proposed plans and audits as part of the Whole Farm Plan to help farmers and crofters measure the impact of their businesses and find ways to become more efficient and to cut emissions.

• New conditions related to calving intervals were introduced for the Scottish Suckler Beef Support Scheme (SSBSS). Since 1 January 2025, calves are only eligible for an SSBSS payment if their dam has a calving interval threshold of 410 days or less. This condition is designed to help balance productivity and profitability with the opportunity to address the climate impact of emissions by encouraging efficient beef production.

In addition to these changes on direct support, several new policy documents or legislative acts were also adopted in 2024, including:

• The Climate Change (Emissions Reduction Targets) (Scotland) Bill, which introduces a carbon budget framework, was passed in November 2024.

• The third Scottish National Adaptation Plan was published in September 2024 and sets out a range of actions to further build Scotland’s agriculture sector’s resilience to climate change. They include financial and advisory support for farmers to enable climate adaptation at a farm, regional and national level and consideration of climate resilience and vulnerabilities in supply chains.

Wales

A set of transitional rural grant schemes are being implemented in 2024 and 2025, providing capital to farmers to improve efficiency and environmental performance. These include:

• The introduction of a new Integrated Natural Resources Scheme in 2025 to support farmer-focussed partnerships delivering nature-based solutions across a landscape, catchment or on a pan-Wales scale.

• The Nutrient Management Investment Scheme, providing financial support to improve the economic and environmental performance of farm holdings.

• Organic Support 2025, a payment for existing eligible organic agriculture producers who maintain full organic certification.

• Extension of the Farming Connect scheme, focusing on knowledge transfer and innovation support, until spring 2026.

Northern Ireland

Several schemes and projects were launched in 2024 and 2025. These include:

• The Farm Sustainability Transition Payment (FSTP) was introduced in January 2025 and is intended to support the transition from the Basic Payment Scheme to the Farm Sustainability Payment which is planned for introduction in 2026.

• The Beef Carbon Reduction Scheme commenced on 1 January 2024. The scheme aims to improve the efficiency of the beef sector and reduce livestock GHG emissions, thereby contributing to meeting the Climate Change Act (Northern Ireland) 2022 targets. The scheme will support progressive reductions in the maximum age at slaughter over a four-year period, from 30 months in 2024 to 26 months by 2027. Farmers slaughtering clean beef cattle at or below the target age for each year of the scheme will receive a payment of for each eligible animal slaughtered.

• The Suckler Cow Scheme, which opened on 1 April 2025 aims to incentivise farm businesses to reduce the age at first calving and/or calving interval of beef breed suckler cows over a four-year phased implementation period.

• The Dairy Carbon Networks Project, launched in February 2025, which is the result of a collaboration between DAERA and Defra to include a Northern Ireland element within the Defra funded project. The results from this project will inform the design of a future Northern Ireland specific Livestock Dietary Emissions Challenge Fund.

• The Soil Nutrient Health Scheme, which assists farmers in planning their farm nutrient management more effectively, has continued to roll out on a zonal basis throughout Northern Ireland and the final zone is planned to open in 2025.

• The Bovine Genetics Project is one of the key components of the Sustainable Agriculture Programme and will provide farmers with the data and evidence to breed animals with reduced Greenhouse Gas emissions, lower pollution potential and improved animal health and welfare, including the ability to identify those breeding animals most resistant to Bovine Tuberculosis.

• The Carbon Footprinting Project will provide each farm business in Northern Ireland with a baseline whole farm carbon footprint. Data obtained from the project will be used to provide knowledge transfer to farmers to support them in reducing on-farm emissions, to inform future policy development on carbon mitigation strategies, and to update assumptions within the Northern Ireland part of the UK GHG inventory.

• The Farming with Nature (FwN) Package is one of the key priorities within the Sustainable Agriculture Programme and is intended to start in 2025, subject to business cases and legislation being in place. The policy intent is to increase the extent of habitats on farmed land across Northern Ireland and restore biodiversity and habitat connectivity at a landscape scale by rewarding farmers for delivering environmental public goods, alongside food production

• A pilot of the Farming for the Generations programme, launched in October 2024, will encourage longer term planning for farm businesses based on a three-phase approach including planning for succession, development of the successor, and maintaining support for both generations. The programme will also include knowledge skills development and explore the provision of appropriate incentives to facilitate generational change.

Trade policy developments in 2024-25

In May 2022, an agreement in the form of an exchange of letters was reached between the United Kingdom and Ukraine, allowing for a temporary elimination of all customs duties on goods for a period of 12 months, which was subsequently renewed until March 2024 alongside the signature of the UK-Ukraine Digital Trade Agreement. In February 2024 the United Kingdom announced that it will extend tariff-free trade with Ukraine until 2029, aiming to provide Ukrainian businesses and exporters with greater economic support and certainty. This latest agreement will see tariff-free trade extended on all goods until 2029, except for eggs and poultry which will be extended only until 2026.

The Scottish Government published its third Annual Report of Scotland’s Vision for Trade on 31 October 2024. This documents progress towards its trade objectives, including better understanding the impacts of trade. This progress includes that the Scottish Government undertook economic modelling to quantify the impact of four UK Free Trade Agreements (FTAs) (Australia, India, Switzerland and Türkiye) and the UK-EU Trade and Cooperation Agreement (TCA) on sectors of the Scottish economy. This included granular UK-level analysis of impacts of the UK-India and UK-Australia FTAs on agri-food subsectors.

Policy context

Key economic and agricultural statistics

Agriculture accounts for a relatively small share of the United Kingdom’s economy, representing less than 1% of GDP and total employment, significantly below the OECD average. The share of livestock in total agricultural production is 61%, and the share of crop production is 39% (Table 28.2).

Table 28.2. United Kingdom: Contextual indicators

	United Kingdom		International comparison
	2000*	2023*	2000*	2023*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	1 562	3 979	3.9%	2.6%
Population (million)	59	68	1.4%	1.3%
Land area (thousand km2)	242	242	0.3%	0.3%
Agricultural area (AA) (thousand ha)	16 964	16 832	0.6%	0.6%
			All countries1
Population density (inhabitants/km2)	243	283	52	64
GDP per capita (USD in PPPs)	26 533	58 288	9 368	29 013
Trade as % of GDP	20.0	18.5	12.3	14.9
Agriculture in the economy			All countries1
Agriculture in GDP (%)	0.9	0.6	2.9	3.5
Agriculture share in employment (%)	1.5	0.9	-	-
Agro-food exports (% of total exports)	5.2	6.4	6.4	8.1
Agro-food imports (% of total imports)	7.8	10.0	5.8	7.3
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	41.1	38.7	-	-
Livestock in total agricultural production (%)	58.9	61.3	-	-
Share of arable land in AA (%)	34.6	35.6	31.8	33.3

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organisation (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Real GDP growth has ranged between 1.4% and 4.3% since the turn of the century, with the exception of the recession following the global financial crisis in 2008-09, and the significant contraction linked to the COVID-19 pandemic which started in 2020 (Figure 28.4). The easing of health measures and high level of pent-up consumer demand resulted in a sharp rebound with real GDP growth reaching 8.6% and 4.8% in 2021 and 2022, respectively, with growth rates below 1% observed in 2023 and 2024.

The unemployment rate was steady at around 5% in the early 2000s and increased to more than 8% in the aftermath of the global financial crisis. Unemployment has been declining steadily since 2011 and reached a low point of 3.8% in 2022. In contrast, inflation rose to a multi-decade high of 7.9% in 2022, driven by rising energy and food prices, and supply chain bottlenecks.

The United Kingdom is a net importer of agricultural and food products (Figure 28.5). Over the last two decades, the share of agro-food exports in total exports has increased to 6.4%, while agro-food imports now account for 10% of total imports. The composition of agro-food trade in 2023 shows that the majority (75%) of exports are processed goods for consumption, while 14% of goods exported are processed for industry. In terms of imports, the majority (59%) are processed goods for consumption, followed by primary goods for consumption which account for 18% of imports.

Agricultural output growth averaged 0.47% per year between 2013-22, less than one-third of the global average (Figure 28.6). Total factor productivity (TFP) growth has been 0.4, accounting for more than half of the observed output growth.

Environmental indicators point to improvements over the past two decades (Table 28.3). The nitrogen balance fell by around 20%, the phosphorous balance declined by about 40%, and the share of agriculture in water abstractions (14%) is significantly below the OECD average (50%). However, the sector’s share of total energy use and of GHG emissions grew over the same period and the nitrogen balance is almost three times the OECD average. Agricultural GHG emissions have not fallen as quickly as other sectors (in particular energy), and now account for about 10% of total GHG emissions in the United Kingdom, slightly below the OECD average.

Table 28.3. United Kingdom: Productivity and environmental indicators

	United Kingdom		International comparison
	1991-2000	2013-2022	1991-2000	2013-2022
			World
TFP annual growth rate (%)	-0.1%	0.4%	1.7%	0.8%
			OECD average
Environmental indicators	2000*	2023*	2000*	2023*
Nitrogen balance, kg/ha	107.0	86.1	32.0	29.7
Phosphorus balance, kg/ha	10.0	5.8	3.3	2.5
Agriculture share of total energy use (%)	0.8	1.1	1.7	2.0
Agriculture share of GHG emissions (%)	6.7	10.0	8.7	10.1
Share of irrigated land in AA (%)	0.8	0.4	-	-
Share of agriculture in water abstractions (%)	..	14.2	47.0	49.5
Water stress indicator	6.2	4.3	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

The United Kingdom joined the European Economic Community in 1973, and for several decades its agricultural policies were shaped by reforms to the European Union’s Common Agricultural Policy (CAP). The 2009 CAP Health Check allowed Member States to adopt a selection of measures under their Pillar 2 funding. Subsequently, elective measures were also allowed under Pillar 1 of the CAP 2014-20. The United Kingdom nations’ choices of elective measures were broadly aligned in this context, while specific payments were sometimes chosen, such as the redistributive payment in Wales and voluntary coupled support in Scotland. The United Kingdom opted to transfer 10.8% of its broad-based direct payments envelope to targeted longer-term expenditure under Pillar 2.

On 31 January 2020, the United Kingdom left the European Union. The CAP defined support to agriculture in the United Kingdom until the transition out of the European Union in 2020. In 2020 there were extensive negotiations with the European Union over future trade and co-operation relations, the preparation and adoption of laws to govern agriculture in the United Kingdom after the withdrawal from the European Union, and bilateral trade liberalisation negotiations with third countries.

In 2021 new agricultural support systems were introduced in England and the devolved governments of Scotland, Wales, and Northern Ireland. While the four nations share some common aims and challenges, the proposed timing and nature of the changes to their agricultural support policies vary.

The three devolved governments and England are at various stages of development and implementation of their agricultural transition plans. Alongside the phasing out of the CAP measures, the devolved governments are taking a co-development approach with the sector and stakeholders to design and deliver their new domestic policy instruments.

Table 28.4. United Kingdom: Agricultural policy trends

Period	Framework	Changes in agricultural policies
1973-2020	European Union’s Common Agricultural Policy (CAP)	Coupled support phase (pre-1992) MacSharry Reform (1992-1999) Agenda 2000 CAP Reform (2000-2002) Fischler Reform (2003-2008) Health Check (2009-2013) 2013 reform (2013-2020)
Since 2020	Transition to new agricultural support system	Gradually phasing out of CAP agricultural support and introduce new systems of agricultural support: Agriculture Act 2020 (England) Agriculture (Retained EU Law and Data) (Scotland) Act 2020 and Agriculture and Rural Communities (Scotland) Act 2024 Agriculture (Wales) Bill 2022 54 policy decisions on Future Agricultural Policy for Northern Ireland

The PSE remained stable at around 18-19% from 2017 to 2021 before decreasing to 14-16% in 2022-24 (Figure 28.7). These fluctuations were partly driven by changes in market price support (MPS) for livestock products, in particular beef and poultry which are subject to tariffs and tariff rate quotas.

References

[4] Frezal, C. and A. Deuss (2025), “Trade-related measures linked to the environmental sustainability of agriculture: A stocktake and typology”, OECD Food, Agriculture and Fisheries Papers, No. 216, OECD Publishing, Paris, https://doi.org/10.1787/ebfdca09-en.

[3] OECD (2020), Taxation in Agriculture, OECD Publishing, Paris, https://doi.org/10.1787/073bdf99-en.

[1] World Trade Organization (2024), World Tariff Profiles 2024: Türkiye, https://www.wto.org/english/res_e/statis_e/daily_update_e/tariff_profiles/TR_E.pdf.

[2] WTO (2024), World Tariff Profiles 2024, https://doi.org/10.30875/9789287076519c004.

Note

← 1.  This number includes the percentage related to both the main obligation (14.054%) and the development fuel target (1.6%).