Agricultural Policy Monitoring and Evaluation 2026

29. United Kingdom

Main findings

Support to agriculture

The Producer Support Estimate (PSE) in the United Kingdom amounted to 13% of gross farm receipts in 2023-25, 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 26% of the PSE and is most relevant for livestock products, some of which are still subject to tariffs, tariff rate quotas (TRQs) and non-tariff measures. A large share of the budgetary support to farmers is provided through payments based on historical entitlements and non-commodity criteria, which account for 41.3% and 11.8% of the PSE, respectively. Payments based on non-commodity criteria have increased substantially as a proportion of the PSE over the last three years.

Support for general services (General Services Support Estimate, GSSE) was 2.4% of the value of agricultural production in 2023-25, below the OECD average of 3.6%. 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 2023-25, about half the OECD average.

Key policy changes in 2025-26

In England, changes to the Sustainable Farming Incentive (SFI) are expected to limit the concentration of payments. Individual agreements will be capped at GBP 100 000 (USD 131 579) and smaller farms and those without nature-friendly agreements will be able to apply earlier. From April 2026, revised inheritance tax rules will cap the 100% relief at GBP 2.5 million (USD 3 289 474), with 50% relief applying above this threshold.

In Scotland, new conditionalities have been introduced for farmers who receive support through the Basic Payment Scheme (BPS). In 2025, additional cross compliance conditions (restrictions to carrying out certain activities on peatlands and wetlands) to protect these environmental assets were introduced. As of 2026, more farmers will be required to dedicate 5% of their land to practices considered to be good for the environment in order to benefit from greening payments (a top-up on the BPS).

In Wales, the Sustainable Farming Scheme (that intends to replace the BPS) started in January 2026. However, in 2026 farmers will be allowed to decide whether to opt for the new scheme or remain in the BPS scheme which will be terminated in 2029. The new scheme contains three layers (universal, optional and collaborative). All farmers are required to meet the conditions of the universal layer, additional payments will be made for farmers who decide to adopt additional actions (optional) or contribute to areas requiring collaborative action (collaborative).

In Northern Ireland, the Basic Payment Scheme (BPS) was replaced by a one-year transitional payment in 2025 and, subsequently, by the Farm Sustainability Payment (FSP) from January 2026. The FSP introduces revised land eligibility rules, new farm sustainability standards, as well as new eligibility criteria (e.g. for 2026 scheme year, the requirement to have carried out agricultural activities during a set previous time period) as well as new conditionalities, such as the compulsory participation in the Soil Nutrient Health Scheme and the Bovine Genetics project. A progressive capping of the benefits is also being phased-in over 2026 and 2027.

Assessment and recommendations

• Phase out high MPS for specific commodities as they can contribute to higher food prices and discourage farmers from changing production. Recent increases to the volume levels of the autonomous tariff quota (ATQ) on raw cane sugar and ongoing efforts to reduce non-tariff measures, such as recent trade agreements and the UK-EU SPS agreement currently being negotiated, are important steps in this direction.

• Strengthen the implementation of UK’s post-CAP frameworks to deliver environmental improvements while supporting productivity-enhancing change at scale. This will require building on the positive elements already introduced in the different schemes. This includes additional environmental conditionalities introduced (Scotland, Wales and Northern Ireland), as well as important design features of agricultural support schemes in England, which include a degree of flexibility in the choice of selected actions, differentiation in payment rates and bespoke schemes targeting complex actions (e.g. Landscape recovery and Countryside Stewardship). Combining the positive design aspects while addressing remaining challenges, including uncertainty of incentives for long-term adoption, will remain important to ensure the new agricultural support frameworks are at jointly addressing productivity and environmental sustainability.

• Ensure that agricultural support schemes provide stable, long-term incentives aligned with long‑term policy objectives that provide the predictability that famers need to make informed decisions about land-use changes. In England, the iterative approach to design has allowed for important corrective action that enabled a high uptake rate of the different schemes. However, uncertainty related to the future relative allocations between lower and higher tier agri‑environmental payments and recent challenges related to programme implementation of key programmes can create uncertainty for farmers. Providing a stable multi-year framework with more predictable allocations across different tiers of agri-environmental payments in a way that is aligned with long-term policy objectives is important to jointly addressing productivity and environmental sustainability.

• Invest in innovation and agricultural research and development and improve coordination across actors in the UK Agricultural Knowledge and Innovation system (AKIS) to progress towards sustainable productivity growth. The increase in funding noticed in the last three years is encouraging. Ensuring that increased funding translates into productivity gains in the most efficient way requires good coordination across all key AKIS actors.

Key indicators on agricultural support

Table 29.1. United Kingdom: Estimates of support to agriculture

Million USD

	2000-02	2023-25	2023	2024	2025p
Total value of production (at farm gate)	..	44 475	39 808	43 360	50 257
of which: share of MPS commodities (%)	..	69.02	71.83	65.84	69.39
Total value of consumption (at farm gate)	..	50 867	44 460	50 660	57 481
Producer Support Estimate (PSE)	..	6 402	6 237	5 967	7 001
Support based on commodity output	..	1 671	1 939	1 289	1 785
Market price support¹	..	1 671	1 939	1 289	1 785
Positive market price support	..	1 682	1 939	1 322	1 785
Negative market price support	..	-11	0	-32	0
Payments based on output	..	0	0	0	0
Payments based on input use	..	575	563	535	628
Based on variable input use	..	475	485	433	507
with input constraints	..	0	0	0	0
Based on fixed capital formation	..	89	74	90	103
with input constraints	..	0	0	0	0
Based on on-farm services	..	12	4	12	18
with input constraints	..	0	0	0	0
Payments based on current A/An/R/I, production required	..	739	820	955	441
Based on Receipts / Income	..	0	0	0	0
Based on Area planted / Animal numbers	..	739	820	955	441
With input constraints	..	48	107	26	10
Payments based on non-current A/An/R/I, production required	..	1	0	0	2
Payments based on non-current A/An/R/I, production not required	..	2 646	2 587	2 696	2 655
With variable payment rates	..	0	0	0	0
with commodity exceptions	..	0	0	0	0
With fixed payment rates	..	2 646	2 587	2 696	2 655
with commodity exceptions	..	0	0	0	0
Payments based on non-commodity criteria	..	760	328	491	1 463
Based on long-term resource retirement	..	135	92	135	178
Based on a specific non-commodity output	..	581	181	316	1 246
Based on other non-commodity criteria	..	44	55	39	38
Miscellaneous payments	..	10	0	0	28
Percentage PSE (%)	..	13.02	14.14	12.42	12.62
Producer NPC (coeff.)	..	1.04	1.05	1.03	1.04
Producer NAC (coeff.)	..	1.15	1.16	1.14	1.14
General Services Support Estimate (GSSE)	..	1 067	930	1 029	1 241
Agricultural knowledge and innovation system	..	549	441	535	671
Inspection and control	..	392	351	379	446
Development and maintenance of infrastructure	..	56	67	49	53
Marketing and promotion	..	67	71	64	67
Cost of public stockholding	..	1	0	3	2
Miscellaneous	..	1	0	0	3
Percentage GSSE (% of TSE)	..	12.05	12.97	11.42	11.93
Consumer Support Estimate (CSE)	..	-830	-2 587	228	-131
Transfers to producers from consumers	..	-1 683	-1 939	-1 324	-1 785
Other transfers from consumers	..	-555	-651	-505	-508
Transfers to consumers from taxpayers	..	1 393	3	2 015	2 162
Excess feed cost	..	14	0	43	0
Percentage CSE (%)	..	-1.73	-5.82	0.47	-0.24
Consumer NPC (coeff.)	..	1.05	1.06	1.04	1.04
Consumer NAC (coeff.)	..	1.02	1.06	1.00	1.00
Total Support Estimate (TSE)	..	8 862	7 170	9 011	10 404
Transfers from consumers	..	2 237	2 590	1 829	2 293
Transfers from taxpayers	..	7 179	5 231	7 687	8 619
Budget revenues	..	-555	-651	-505	-508
Percentage TSE (% of GDP)	..	0.24	0.21	0.24	0.26
Total Budgetary Support Estimate (TBSE)	..	7 191	5 231	7 722	8 619
Percentage TBSE (% of GDP)	..	0.19	0.15	0.21	0.22
GDP deflator (1986-88 = 100)	..	290	279	289	300
Exchange rate (national currency per USD)	..	0.78	0.80	0.78	0.76

.. 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 (2026), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

In the United Kingdom, policy areas that affect agriculture support are characterised by different levels of devolved competence. 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, some policy areas and instruments affecting agricultural support remain under the competence of the UK Government. 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 formal withdrawal from the European Union (EU), and consequent departure from the Common Agriculture Policy (CAP), the UK constituent countries 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 right to create and implement national legislation in relation to agriculture.

The United Kingdom’s departure from the EU also led to new trading relationships. 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. 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, New Zealand, Korea, and India.

Policy instruments to support the food and agriculture sector range from UK-wide trade and tax policies to agricultural support measures and policies specific to its constituent countries. 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 2024 was 8.8%, substantially higher the 2.9% faced by non-agricultural products. Certain sectors deemed as sensitive face higher levels of protections, including dairy (24.1% on average), live animals and meat (14.7%), sugars and confectionery (21.1%), and cereals (9.9%) (World Trade Organization, 2025[1]). 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.

Certain tax rebates or exemptions apply to farmers (OECD, 2020[2]). Farmers pay regular income taxes but benefit from provisions allowing profits to be averaged over several successive years, particularly when there is at least one year with zero profits or when average past profits fall below a given threshold (income smoothing). Farm vehicles are exempt from the annual vehicle tax, while agricultural land and production-related buildings are exempt from the local property tax. Farmers also benefit from reduced taxes through flat-rate VAT schemes with reduced rates of 4%, and lower excise taxes on diesel fuels for use on-farm. Eligible companies may claim tax relief on R&D expenditures to encourage innovation and inherence tax relief allows agricultural property to be transferred free of tax, encouraging family continuity and generational renewal.

The pace and design of reforms following the exit from the European Union have differed in the constituent countries of the United Kingdom. Most systems combine area-based payments, environmental land management schemes and sector-wide programmes supporting innovation, advisory services and public goods. In addition, some constituent countries operate food and nutrition programmes aimed at vulnerable consumers. The following sections summarise the main measures in each nation.

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 (Sustainable Farming Incentive, Countryside Stewardship, 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 targeted outcomes of the ELM schemes focus on 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. The scheme was reformed in 2025 and the number of actions on offer decreased from 100 to 71. Farmers can choose among several different action areas, 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.

In addition to ELM schemes, various budgetary support schemes are aimed at financing agricultural knowledge and innovation with the aim of boosting productivity and sustainability in the farming sector. Key programmes include:

• 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 32 894) 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 that provides grants of up to GBP 500 000 (USD 657 894). 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 are available to finance projects ranging from GBP 50 000 (USD 65 789) to GBP 100 000 (USD 131 579).

• 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. The programme includes several different competitions with varying project sizes, ranging from Feasibility studies (GBP 200 000 – GBP 500 000 or USD 263 157 – USD 657 895) to longer term innovations where project size varies from GBP 500 000 to GBP 6 million (USD 657 895 to USD 7 894 737).

Several major food and nutrition programmes support infants, children, pregnant women, and vulnerable consumers. Under the Free School Meals (FSM) scheme, over 2 million children in state-funded schools in England (from reception to secondary school) are eligible for free meals during the school year. The Holiday Activities and Food programme provides free or low-cost activities and free meals to children during school holidays. The Healthy Start scheme offers funding for healthy foods to pregnant women and children under four years old from very low-income households. Finally, the Household Support Fund helps low-income families purchase food, utilities, and clothes during winter.

Scotland

The Agriculture and Rural Communities (Scotland) Act 2024 creates a new support system, which will replace the former CAP schemes. As of 2026, reforms will gradually introduce a four-tier system of agricultural support. Tier 1 provides direct payments to support active farming, through the existing Basic Payment Scheme (BPS), with additional conditions introduced over time. Tier 2 provides additional support to farmers and crofters doing additional effort for climate and nature. Tier 3 will support actions that protect habitats or species or improve business sustainability. Tier 4 will focus on strengthening skills and capabilities, through training and advice.

Area-based decoupled direct payments to producers are the largest single support measure, targeting individual farmers that meet certain eligibility criteria (e.g. minimum farmed area, land in Good Agricultural Environmental Condition). As of 2026, under the new agricultural support system, farmers will receive the Basic Payment Scheme (subject to additional conditionalities, such as farm plans and audits). Greening payments for agricultural practices will be paid in addition to the BPS.

Coupled support is directed at beef and sheep. The Scottish Suckler Beef Support Scheme (SSBSS) is a direct payment to specialist beef producers based on the number of animals and subject to certain conditions (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.

The Farm Advisory Service (FAS) is the Rural Support Plan funded advice and knowledge exchange service for Scottish farmers and crofters, helping businesses access practical advice, knowledge transfer, events, peer-to-peer and specialist support.

Free school lunches are available in schools funded by the Scottish Government to all pupils in primaries one to five, and to eligible pupils from low-income families from primary six to secondary six. The Best Start Foods programme provides pregnant women and families with children under the age of three receiving certain benefits with a pre-paid card that is topped up every four weeks to purchase healthy foods.

Wales

The Agriculture (Wales) Act 2023 establishes Sustainable Land Management (SLM) as the overarching framework for future support to agriculture in Wales. Under the new framework, area-based decoupled direct payments are an important feature of agricultural support. These are currently delivered through the Basic Payment Scheme (BPS), which is to be phased out by the end of 2029, and the Sustainable Farming Scheme (SFS), which is being gradually introduced. Compared to the BPS, the SFS places greater emphasis on specific environmental conditionalities and sustainable land management and environmental outcomes. In 2026, the two schemes operate in parallel, allowing farmers to choose which programme to participate in.

The Control of Agricultural Pollution Regulations sets, among other things, a limit for nitrogen for livestock manure at 170 kg/ha across Wales aiming 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. The Farming Connect advisory service promotes the adoption of sustainable practices that improve livestock health and productivity.

Northern Ireland

Support to the agriculture sector in Northern Ireland is provided through the Sustainable Agriculture Programme (SAP) which aims to transition to a more sustainable farming sector by implementing policies and strategies that benefit the climate and environment while supporting the agri-food sector in Northern Ireland.

As of 2026, the Farm Sustainability Payment (FSP), within the Sustainable Agriculture Programme (SAP), is the largest area-based scheme available in Northern Ireland. Compared with the previous scheme (the Basic Payment Scheme) FSP includes new eligibility criteria (e.g. for scheme year 2026 the requirement to have carried out at least one of a number of defined agricultural activities during a set historic year period). It also introduces revised land eligibility rules, new farm sustainability standards as well as new conditions, such as compulsory participation in the Soil Nutrient Health Scheme and the Bovine Genetics project. A progressive capping of payments above GBP 60 000 (USD 78 947) is also being phased in over 2026 and 2027.

The Pilot Protein Crop scheme provides complementary support to farmers for growing beans, peans and sweet lupins. In the livestock sector, the Beef Sustainability Package includes the Beef Carbon Reduction Scheme, which encourages earlier slaughter of clean beef animals to reduce emissions, and the Suckler Cow scheme, which aims to reduce emissions by lowering the age at first calving and shorten the calving interval of beef breed suckler cows.

Public funding also supports animal and plant health, delivered by the Northern Ireland Department of Agriculture, Environment and Rural Affairs (including inspection and certification). One of the largest programmes in this area is the Bovine TB (tuberculosis) control programme, which requires annual testing of all herds. Funding for innovation is also provided, notably through the Agricultural Research and Development Scheme (Northern Ireland) 2024-2029, which supports research and development related to agricultural products.

Recent policy developments

Domestic policy developments in 2025-26

England

In 2025, the application for the Sustainable Farming Incentive (SFI) scheme was paused as requested funds exceeded the available budget. The reforms to the SFI include several important changes. First, the scheme caps the agreements at GBP 100 000 (USD 131 579) per agreement to avoid large landholdings absorbing an overly large proportion of the funding. Second, smaller farms and those without an existing nature-friendly agreement are eligible to in June, whereas the scheme opens for remaining farms in September. Third, the list of available actions was reduced from 102 to 71.

The Genetic Technology (Precision Breeding) Act of 2023, together with the Genetic Technology (Precision Breeding) Regulations, took effect in November 2025. This legislation introduces a new regulatory framework that distinguishes precision-bred plants from traditional Genetically Modified Organisms (GMOs).

Since April 2026, a new inheritance tax regime is in force. The full 100% relief for agricultural and business property is now capped at an individual threshold of GBP 2.5 million (USD 3.29 million). For the value of qualifying property above this threshold, a reduced relief rate of 50% applies.

Scotland

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

As of 2026, more farmers will be required to manage Ecological Focus Areas (EFAs) as previous exemptions are removed. This means that farmers receiving the BPS need to devote at least 5% the land to practices that are good for the environment. Additional conditionalities have been introduced to farmers choosing to obtain the greening payment (a top-up to the BPS). In 2027, the proportion of land under EFAs is expected to further increase, from 5% to 7%.

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.

Wales

On 1 January 2026, the Sustainable Farming Scheme (SFS) was launched with the aim to eventually fully replace the Basic Payment Scheme. Applications will be open until May 2026. In 2026, farmers will have the choice to opt for the Sustainable Farming Scheme or continue the Basic Payment Scheme (BPS), which will be terminated in 2029.

The SFS contains three layers of actions for farmers: Universal, Optional and Collaborative. All farmers in the scheme will be required to meet all of the 12 universal actions relevant to their farms in order to receive a universal payment. These universal actions cover aspects related to soil health (e.g. soil testing requirement), benchmarking (use of KPIs), and animal welfare (e.g. biosecurity assessments and engage in animal health improvement cycles). In addition, farmers can take on optional actions (grouped into 14 themes) or collaborative actions (3 themes linked to innovation, markets, and collective landscape scale activity). Additional actions will entail additional requirements, but also additional funding which can be a mixture of one-off revenue payments, multi-annual revenue payments (e.g. area-based payments), and capital payments.

Additional schemes are being implemented in 2025 and 2026, to help farmers improve efficiency and environmental performance. These include:

• A new Integrated Natural Resources Scheme, introduced in 2025, supports farmer-focussed partnerships delivering nature-based solutions across a landscape, catchment or on a pan-Wales scale.

• Organic Support, introduced in 2026, provides a payment for existing eligible organic agriculture producers who maintain full organic certification.

• The Farming Connect advisory service scheme, focusing on knowledge transfer and innovation support, was extended until spring 2026.

Northern Ireland

The Basic Payment Scheme (BPS) was replaced by the Farm Sustainability Payment (FSP) from January 2026. FSP includes new eligibility criteria (e.g. for scheme year 2026 the requirement to have carried out at least one of a number of defined agricultural activities during a set historic year period). It also introduces revised land eligibility rules, new farm sustainability standards as well as new conditions, such as compulsory participation in the Soil Nutrient Health Scheme and the Bovine Genetics project. A progressive capping of payments above GBP 60 000 (USD 78 947) is also being phased in over 2026 and 2027.

The Suckler Cow Scheme, introduced in April 2025, is designed 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, is the result of a collaboration between DAERA and Defra to include a Northern Ireland element within this Defra funded project. The results from this project will inform the development of future Northern Ireland livestock policy, in particular on dietary interventions.

Trade policy developments in 2025-26

The India-United Kingdom Comprehensive and Economic Trade Agreement was signed in July 2025. The agreement is not yet in force, pending both countries’ domestic procedures. For agricultural products, the agreement is a mix of new market access, phased tariff cuts, and retained safeguards. For UK exports into India, the goods chapter notes that 64% of UK tariff lines become duty‑free when the deal enters into force, rising to 85% after 10 years; this includes agri-food products such as sheep meat, frozen salmon and cod, chocolate, biscuits, infant formula, animal feed, protein concentrates, and soft drinks. No new equivalence decisions for agri-food products were made under the agreement. India gives immediate zero-duty access for some key UK agri-food exports (notably sheep meat and salmon), phases out tariffs over 5-10 years for a significant range of processed food items, gives partial tariff cuts for some beverages. For some areas (e.g. dairy), dairy imports from India be liberalised without reciprocal access in return. Other agricultural products, such as sugar, milled rice, pork, chicken and eggs will not be covered by the tariffs removal.

An updated trade agreement with Korea was concluded in December 2025. The renewal of this agreement was important as part of the trade agreement carried over from EU membership were set to expire in early 2026. This trade agreement ensures continued and permanent tariff-free access across 98% of tariff lines – the same terms the EU has with Korea. The updated trade agreement also includes a modernised SPS chapter, which includes new provisions on certification and import requirements, as well as an expanded article on animal welfare.

Following a 10% tariff rate imposed by the United States, the UK and the US concluded in May 2025 the Economic Prosperity Deal (EPD), a non-binding agreement that sought to reduce the potential impacts of US tariffs on the United Kingdom. Two agricultural commodities, beef and ethanol, were affected by the EPD. The UK will create a preferential-duty quota for US beef of 13 000 metric tonnes complying with the UK’s sanitary and phytosanitary requirements and will remove the 20% tariff on US beef imports. The US committed to reallocate to the UK 13 000 metric tonnes of its “Other countries” TRQ for beef at MFN rates at the latest by 1 January 2026. The UK also committed to create a preferential duty-free quota for US ethanol of 1.4 billion litres per year.

In May 2025, the UK Government and the European Union agreed to pursue a new Sanitary and Phytosanitary (SPS) agreement covering, among other things, the trade, production and movement of plants and animals, food and feed safety.

The UK Government reviewed to the volume level of its autonomous tariff quota (ATQ) on raw cane sugar from 260 000 tonnes to 350 000 tonnes, with the revised volumes intended to remain in place until 31 December 2033.

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 56.4%, and the share of crop production is 43.6% (Table 29.2).

Table 29.2. United Kingdom: Contextual indicators

	United Kingdom		International comparison
	2000*	2024*	2000*	2024*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	1 568	4 352	3.8%	2.6%
Population (million)	59	69	1.3%	1.3%
Land area (thousand km2)	242	242	0.3%	0.3%
Agricultural area (AA) (thousand ha)	17 531	16 760	0.6%	0.6%
			All countries1
Population density (inhabitants/km2)	243	285	52	64
GDP per capita (USD in PPPs)	26 635	62 872	9 508	31 740
Trade as % of GDP	20.3	17.1	12.3	15.0
Agriculture in the economy			All countries1
Agriculture in GDP (%)	0.9	0.7	3.0	3.6
Agriculture share in employment (%)	1.5	0.9	-	-
Agro-food exports (% of total exports)	5.1	6.6	6.4	8.3
Agro-food imports (% of total imports)	7.7	10.4	6.1	7.5
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	41.1	43.6	62.1	60.4
Livestock in total agricultural production (%)	58.9	56.4	37.9	39.6
Share of arable land in AA (%)	36.8	36.5	33.0	34.0

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 29.4). The easing of health measures and high level of pent-up consumer demand resulted in a sharp rebound with real GDP growth reaching 8.5% and 5.1% in 2021 and 2022, respectively, with growth rates below 2% observed since 2023.

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. With the exception of 2020 and 2021, unemployment declined steadily between 2011 and reached a low point of 3.8% in 2022, before increasing since 2023. 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. Inflation rates have since come down, reaching 3.3% in 2024.

The United Kingdom is a net importer of agricultural and food products (Figure 29.5). Over the last two decades, the share of agro-food exports and imports have increased, with agro-food exports now representing 6.6% of all exports, while agro-food imports account for 10.4% of total imports. Figure 29.5 also shows that the gap between agro-food imports and exports has increased substantially since 2021, with net agro-food imports increasing by 43% since 2021.The composition of agro-food trade in 2024 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 -0.05% per year between 2014-23, well below the global average (Figure 29.6). Annual total factor productivity (TFP) growth has also been negative at -0.1%.

Environmental indicators point to improvements over the past two decades (Table 29.3). The nitrogen balance fell by around 20%, the phosphorous balance declined by over 50%, the overall level of GHG emissions decreased, and the share of agriculture in water abstractions (14%) is significantly below the OECD average. 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 just under 11% of total GHG emissions in the United Kingdom, slightly above the OECD average.

Table 29.3. United Kingdom: Productivity and environmental indicators

	United Kingdom		International comparison
	1991-2000	2014-23	1991-2000	2014-23
			World
TFP annual growth rate (%)	0.1%	-0.1%	1.8%	0.8%
			OECD average
Environmental indicators	2000*	2024*	2000*	2024*
Nitrogen balance, kg/ha	108.4	89.4	32.3	29.0
Phosphorus balance, kg/ha	9.5	4.5	3.3	2.3
Agriculture share of total energy use (%)	0.8	1.1	1.7	2.0
Agriculture share of GHG emissions (%)	6.7	10.7	8.7	10.3
Share of irrigated land in AA (%)	0.8	0.4	-	-
Share of agriculture in water abstractions (%)	13.9	14.2	46.1	47.7
Water stress indicator	6.2	4.3	..	..

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) (see also the European Union chapter). 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 choices of elective measures the different constituent countries of the United Kingdom 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 constituent countries 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 29.4. 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 12-14% in 2022-25 (Figure 29.7). 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

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

[1] World Trade Organization (2025), World Tariff Profiles 2025, http://www.wto.org/statistics.