Following the Government’s spending review, more details have been revealed about the agricultural budget going forward.
While money has been set aside for environmental and grant schemes, to maintain the overall budget there will be a sharp decrease in the Basic Payment Scheme (BPS).
2025 already saw a significant drop in delinked payments, with the overall scheme being budgeted at £330 million capped at £7,300 per business. For 2026, the budget will be cut to just £20 million, with businesses receiving £600.
This will remain the same until 2028, at which point BPS payments will cease.
Defra’s overview of the changes indicates that total support for agriculture will only change moderately, with increases to the Environmental Land Management schemes and Sustainable Farming Incentive to a maximum of £2 billion in 2028; while other productivity and transition schemes will shift from £350m to £250m over the next three years.
Taking into account nature schemes, the total support for agriculture will drop £2.77 billion to £2.7 billion.
The significant cut to BPS has provoked responses from the industry, including the Country Land and Business Association (CLA).
CLA president Victoria Vyvyan said: “In the context of last week’s Spending Review the sharp fall in BPS payments was expected but is nonetheless unwelcome. It will hit especially hard those whose profit margins are now cut to the bone.
“While there might be a consolation that the new SFI 2026 scheme could be ready for applications in spring 2026, there is as yet no clarity on what that will look like and who will have access to it.
“The reduction in productivity investment over the next three years will also risk dampening investment, at a time when businesses need to look at new technology and equipment to drive efficiencies and improve environmental sustainability.”