19:20 - The House divided: - Ayes: 57 / Noes: 279 - Question accordingly negatived.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Jenny Riddell-Carpenter)
I thank the Liberal Democrat spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), for his speech. Farming is not simply another industry. Farmers produce the food that sustains us, manage much of our countryside and underpin a wider food and drink economy. Agriculture alone contributes £14.5 billion to the economy, while the wider food and drink sector contributed £153.2 billion in 2023. That does not just matter to the economy; maintaining domestic food production to at least current levels is integral to our national security.
As the Prime Minister said in this House last month, farming and food production are part of this country’s sovereign production and manufacturing capacity, which we will need to strengthen in the years to come. We will need to depend on it, and therefore we need to strengthen it—that is a clear commitment. That is why this Government are committed to backing British farmers and maintaining domestic food production to at least current levels.
Charlie Dewhirst (Bridlington and The Wolds) (Con)
On the point about maintaining domestic food production, the Minister will no doubt be aware of the problems facing the pig sector. We have had tens of thousands of pigs backed up on farms, contracts cancelled, and farmers losing up to £50 a pig. What discussions have the Minister and colleagues had with the pig sector, and what plans do the Government have to support our Great British pig farms?
Jenny Riddell-Carpenter
I thank the hon. Member for that important question. I can confirm that the Farming Minister and other colleagues have been in active conversation with the National Pig Association and are continuing that dialogue.
Our farming road map sets out a long-term direction for the sector that is more profitable, productive, sustainable and resilient, and better able to withstand climate, market and geopolitical shocks.
I want to acknowledge just how difficult this year has been. The Liberal Democrat spokesperson set out the extraordinary combination of pressures that farmers have faced this year alone: drought and water shortages, reduced grass and forage growth, difficult crop conditions, and higher irrigation and feed costs. At the same time, the conflict in the middle east has put further pressure on fertiliser and fuel prices.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Minister highlights fertiliser costs. Last week, this Government pushed through the fertiliser tax, which will put up the price of fertiliser by between £80 and £90 a tonne, which the Conservatives voted against. The Liberals sat on their hands and did not oppose the tax, which was, frankly, shocking. Does the Minister not recognise the pressures that farmers are facing and the fact that this additional tax that this Government have imposed will do nothing to help?
Jenny Riddell-Carpenter
I will remind the hon. Member that the last UK ammonia production facility closed under the Conservatives without any Government intervention.
We recognise that resilience is not evenly distributed and that some farm businesses have significantly less capacity than others to withstand those short-term shocks. The impacts of climate change and drought have been particularly severe, with more than 80% of the country now in drought. The south-east and south-west experienced their driest period from April to September in more than a century, and pressure on water resources continues despite the rain that we are seeing today.
We understand what that means on our farms—less grass, lower forage growth and new crop yields, pressure on irrigation and reservoirs, greater demand for livestock water, and, ultimately, greater uncertainty about the year ahead—so we have acted. In August, we introduced a package of drought support measures including temporary adjustments to environmental land management agreements so that farmers affected by drought could continue receiving payments while taking practical steps to protect their businesses. We also reminded farmers and growers that they can apply to the Environment Agency for temporary abstraction flexibility through local enforcement protections to help them to access water during dry periods where environmental impacts can be appropriately managed.
Liberal Democrat Members ask now what we are doing on water and climate resilience, but the last time they were in government, they cut flood defence spending by a fifth within six months of taking office. We are taking water and weather extremely seriously.
However, responding to one dry summer is not enough; farmers need greater long-term water security. That is why we are making up to £15 million available through a further water management grant to help to build farm reservoirs, which allow water to be stored when it is most readily available and then used to support food production during the drier periods. This will help to reduce reliance on direct abstraction when rivers and groundwater are under greatest pressure. We are also making it easier to build reservoirs by updating planning guidance and working with industry to review whether further planning reforms are needed.
We have also simplified applications for longer-duration abstraction licences, helping farmers to secure finances for on-farm reservoirs by better aligning licence duration with investment and loan repayment periods. We have also brought forward the reservoir refill season from November to October for this year. We are also encouraging farmers to work together through water abstraction groups to strengthen local water resilience, while trialling dynamic abstraction in places like Cambridge, using real-time monitoring and data to help farmers to access water when it is available while also protecting the natural environment.
Drought and climate change are not the only sources of uncertainty, though; the middle east conflict remains a significant source of disruption to fertiliser and red diesel prices. The continued pressures underline something fundamental: our farming system needs to become less exposed to global shocks and expensive imported inputs. That means not simply telling farmers to absorb higher costs, but helping them to become more productive and more efficient, with farming schemes including actions supporting variable-rate nutrient application, companion cropping, legumes and herbal leys, all of which can help to improve nutrient efficiency and reduce reliance on synthetic fertiliser.
Ian Roome (North Devon) (LD)
Does the Minister agree that it is simply unacceptable for farmers to be expected to deliver the Government’s environmental ambitions when they have less than six hours to secure the funding to do so? Will she commit to a fairer system for the SFI scheme, with sufficient funding and guaranteed opportunity to apply—for North Devon farmers especially—instead of leaving farmers’ livelihoods subject to a scheme operated on a first come, first served basis?
Jenny Riddell-Carpenter
I thank the hon. Gentleman for that contribution. I will tackle the SFI later in my speech. The Farming Minister has been clear on many of the lessons that will be learned, but I will set them out further shortly.
Across the sustainable farming incentive, countryside stewardship and higher level stewardship, 534,000 hectares are already using precision applications of fertiliser and manure. We have also increased fertiliser market monitoring and encouraged greater use of nutrient planning to help farmers optimise fertiliser use, and we are rolling out an online tool to help farmers use fertilisers more efficiently.
Beyond DEFRA, the Treasury reduced the duty on red diesel earlier this year in response to price increases resulting from the middle eastern crisis. We are investing in innovation, because lasting resilience must ultimately come from producing more efficiently. For ’26-27, £123 million has been allocated to the farming innovation programme, with support for technologies and approaches that can raise productivity and strengthen resilience.
Jenny Riddell-Carpenter
I will make progress, because I am coming on to something important.
I want to address the issue of SFI26 frankly. I really do recognise the disappointment and frustration caused by the closure of the second application window on 22 September. The SFI is a scheme that the Government inherited from the previous Conservative Government. They designed this first come, first served scheme, sent a quarter of the money to 4% of farms and now complain that it was oversubscribed.
When we inherited it, the scheme had no budget control and no proper alignment of SFI actions to environmental and sustainability targets, and it included that first come, first served application process. For 2026, we made improvements to the offer to ensure that more farmers could access funding. We made the offer simpler and more focused, with fewer actions while retaining actions for all farm types. We introduced a £100,000 per annum max agreement value cap to spread the availability of funding more widely.
We also gave priority access to the scheme for small farms and farms without existing ELM revenue agreements. Those two groups had been under-represented in the SFI previously. This priority access through SFI26 window 1 remained open for two months. The SFI26 window 2 was open to all eligible farmers and land managers. It experienced exceptionally high demand and closed after around six hours once available budget had been allocated.
Josh Fenton-Glynn (Calder Valley) (Lab)
I have met with a lot of farmers since the deadline closed, and there is an overwhelming feeling of anxiety, but because they are practical the main thing they want to know is that we are going to learn the lessons of this. Could my hon. Friend please let me know what lessons we will learn and how we will move forward on that basis?
Jenny Riddell-Carpenter
I thank my hon. Friend for the work he is doing to engage with his local farming community. I will be talking about that more, but work is already under way to make those improvements and scrap the first come, first served element of the scheme.
We anticipated stronger demand and increased the window 2 budget significantly over this summer. An additional £50 million was announced by the Prime Minister in August as part of the response to the dry weather that we saw, and a further £20 million was added before window 2 opened.
Jenny Riddell-Carpenter
I will give way because it is the right hon. Gentleman.
Mr Carmichael
I am grateful to my former colleague on the Environment, Food and Rural Affairs Committee—these links are important. Can she tell the House how many applications the Department expected? It was modelled by some that there would be somewhere in the region of 40,000. In fact, there was money available for 12,000. Did it come as a total surprise to the Department that it got as many applications as it did?
Jenny Riddell-Carpenter
The right hon. Gentleman is correct that modelling was undertaken. As a result of that modelling, a further £50 million was announced by the Prime Minister and a subsequent £20 million was announced by the Secretary of State.
I recognise that the substantial demand remained unsatisfied when window 2 closed, and I understand how difficult that was for farmers who were ready to apply but did not have the opportunity to secure an agreement. Let me say this clearly: there will be future SFI offers, and we plan to make an SFI27 offer available as soon as possible.
Jenny Riddell-Carpenter
I am sorry; I am going to make progress.
To that end, we are working with the farming sector on how the scheme can be improved, and the Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Portsmouth South, confirmed that we will scrap the “first come, first served” application.
It is important to stress that the SFI is only one part of our support for farming. Across this Parliament, the Government have allocated a record £11.8 billion to sustainable farming and food production. That includes £788 million this year alone in new funding for farmers to boost farm productivity, develop cutting-edge technologies that will drive future growth, and maintain a healthy natural environment. Capital grants have provided £225 million this year for practical environmental improvements on farms. At least £50 million is available for new countryside stewardship higher-tier agreements. We have also committed £173 million in 2026-27 for productivity, equipment and innovation through the farming equipment and technology fund and the farming innovation programme. That represents an extensive ongoing commitment to farm adaptation and improvement. I hope that the Opposition support those aims.
Our Government support is not only about grants. Farmers need thriving markets and fair returns for the food they produce. That is why we have established the Farming and Food Partnership Board, which brings together leaders from farming, food, retail and finance to focus on productivity, profitability, home-grown produce and national food security. We are taking action on fairness in the supply chain, too. Fair dealing regulations have been introduced for dairy and pigs, with further work covering eggs, fresh produce and crops.
Our farming road map makes our long-term approach clear: we will maintain domestic food production at least at current levels; we will protect productive land for food production; we will support investment in technology and skills; and we will build resilience to the climate and geopolitical shocks that farmers are increasingly having to manage. That is because healthy soil, reliable water supply, efficient use of nutrients and profitable farm businesses are not competing objectives but the foundations of our food security.
Jenny Riddell-Carpenter
I am going to make progress.
Farmers have endured an exceptionally demanding period. We recognise the pressure that many businesses are under, and I recognise the real frustration for those who have been unable to secure an SFI26 agreement, but our commitment to farming has not changed. We will continue to invest in farmers, support productivity and innovation, improve water resilience, make supply chains fairer and work with the sector to build businesses that can withstand changing weather and an uncertain world. Above all, we will continue to back the people who produce our food, because supporting British farming is not simply about supporting one sector; it is about our food security, our economic security and our national resilience. The Government are determined to secure all three.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Stephen Morgan)
I thank hon. Members on both sides of the House for their contributions throughout the debate, and for sharing issues raised by farmers and rural communities across our country. I also thank the Liberal Democrat spokesperson, the hon. Member for Westmorland and Lonsdale (Tim Farron), for raising these important matters.
Let me reiterate the words of my excellent fellow Minister, my hon. Friend the Member for Suffolk Coastal (Jenny Riddell-Carpenter), in her first speech at the Dispatch Box: we know how hard this year has been for farmers. Behind every statistic about drought, input prices or farm income is a family making difficult decisions about crops, livestock bills and their future. We set out our farming road map because farmers have repeatedly asked for clarity and certainty, and we are delivering that. The road map sets out this Government’s strategic vision for farming. We want profitable, productive farms that are better able to withstand volatile weather and markets, and geopolitical shocks. The road map also sets out that domestic food production will be maintained at least at current levels, while nature recovery, economic growth and the responsible use of land and resources are supported. That is supported by the strong financial settlement that DEFRA secured in the 2025 spending review.
Across this Parliament, the Government have allocated a record £11.8 billion to sustainable farming and food production, including £788 million this year alone in new funding for farmers to boost farm productivity, develop cutting-edge technologies to drive future growth, and maintain a healthy natural environment. Where this year has exposed vulnerabilities, this Government have responded. We have made drought flexibilities available, supported investment in farm reservoirs and added funding to the SFI26.
I thank the Chair of the Select Committee, the right hon. Member for Orkney and Shetland (Mr Carmichael) —he is back in his place—for his interventions. I think he is right to recognise the optimism and resilience of our nation’s farmers. I wholeheartedly support that view, as do so many Members in this House. I very much agree with what he said about the value of providing greater certainty to the sector; we are very much doing that through our farming road map. It sets out the Government’s vision for driving more a profitable, productive, sustainable and resilient farming sector, and we are doing that in partnership with the sector, via our partnership board and the sector growth plans.
Members spoke about the SFI, this year’s two windows and the learning for future years, and I thank all Members who have offered practical ideas for its delivery in future. We also recognise where things have not worked as farmers would have wished. The speed with which the SFI26 window closed last month caused real disappointment, and I do not dismiss that frustration. I recognise the concerns raised by Members across the House, and the specific examples that they have given. Demand substantially exceeded the funding available, and we must learn from that experience as we work with the sector in partnership on SFI27. Working through the options, following my confirmation that we have scrapped the “first come, first served” approach, is absolutely a priority of mine.
Tim Farron
In March 2025, the last time the drawbridge was pulled up with no notice, the hon. Member for Cambridge (Daniel Zeichner) said that we must not do first come, first served again. We have just done that, so what guarantees can the Minister give us that next time around it will not be first come, first served? All the same, can he ensure that the window will come very, very soon?
Stephen Morgan
I thank the hon. Gentleman for that intervention. He will know that we made a number of changes to improve the scheme this year. He briefly mentioned those in his opening remarks, but I have been very clear that we need to learn lessons from this year’s scheme and that means a commitment on scrapping the first come, first served approach and bringing forward SFI27 as early as possible.
A number of Members also expressed concerns about the impact on farmers of trade deals done by the previous Conservative Government. Let me be clear: this Government will always act in the national interest to protect Britain’s farmers and secure our food security. We will never lower food standards and we will uphold the high animal welfare standards that our country expects. In the last year alone, we have reached agreement on new trade deals with India, the Republic of Korea, the Gulf Cooperation Council and Switzerland. All those deals strike a balance: they open new opportunities for UK businesses and help diversify supply chains, while also protecting the UK’s most sensitive sectors.
A number of Members have been interested in the SPS agreement with the European Union. I want to thank the hon. Member for South Northamptonshire (Sarah Bool) who is not in her place currently—[Interruption.]—there she is—for the issues she raised. The EU remains the UK’s biggest and closest export market, offering major opportunities for British food and drink businesses to reach millions of consumers. Yesterday, I was at the SIAL trade show in Paris, meeting businesses from every corner of the UK who want to increase their exports to Europe. The SPS agreement will reduce costs and delays for both UK and EU exporters and importers at the border, supporting the UK’s food supply chains and security. It will make agrifood trade with our biggest market cheaper and easier, cutting costs and red tape for British producers.
Ben Goldsborough
Does my hon. Friend agree that one of the huge things we must protect in the SPS agreement is precision breeding—not just the research and development aspect but how we get it to market? From other conversations we have had, I know that he has been working hard with our European colleagues. Can he explain what action he is taking to ensure we can keep precision breeding as that benefit to the UK?
Stephen Morgan
I thank my hon. Friend for that intervention. It was a real pleasure to spend time with him at the Royal Norfolk Show earlier this year, where I heard very clearly the value of our innovation and world-leading technology in this space. I take this opportunity to reflect on the points he made earlier on the importance of working with our international partners and showcasing the best of British around the world, and thank him for that. He will appreciate that I cannot provide details on the ongoing SPS negotiations. The Prime Minister set out that the Government will be completing those negotiations before the next EU-UK summit on 20 November.
A number of Members expressed concern about the impacts of the reforms to agricultural property relief on inheritance tax, which came into force earlier this year. I recognise that when the Government initially announced the reforms in 2024, there was significant concern in the industry about their impact. The Government listened to those concerns carefully, considered the feedback, and the previous Chancellor acted. That is why last year the Government went further to protect more farms and businesses, while maintaining the core principle that the most valuable agricultural and business assets should not receive unlimited relief. This is a fair and balanced approach that protects the family farm while also fixing the public services that we all rely on.
Stephen Morgan
On these matters the Government’s view is now settled. I recognise that the previous Chancellor made the changes as a result of the engagement that she and others had with the farming community up and down the country, but the hon. Gentleman would have been keen to place his views on the record and he has successfully done that.
My hon. Friend the Member for South West Norfolk (Terry Jermy) raised a number of constructive points as a result of his continued engagement with the farmers across his constituency. I understand he has now visited 100 farms in his patch, and I know that he is hosting a very important event in his constituency later this week on the future of farming, and I wish him well with that. My hon. Friend the Member for South Norfolk (Ben Goldsborough) spoke about the importance of profitability and the value of learning from international partners, and I thank him again for his insights. My hon. Friend the Member for Rushcliffe (James Naish) gave a very eloquent speech about the importance of co-designing the future of SFI. I can assure him that directly, and through officials, I and the Department are already working with the sector on exploring options and trade-offs as we consider what SFI ’27 will look like.
To conclude, farmers deserve security, fairness and confidence to invest in the next generation and they have a Government who listen when times are hard and work in partnership with the sector to deliver on the commitments set out in our farming road map. That is our commitment: to back British farming; to maintain domestic food production; and to ensure that those who produce our food have a resilient and profitable future.
Question put.