A report from HCR Law has stated that food security is being held back by a range of legal and regulatory barriers. In the foreword, Rory Hutchings, partner and head of agriculture and estates at HCR Law, says that government incentives for the environment had taken priority over food production, which, combined with renewables projects on Grade 1 land, is eroding farmland.
He added that there is potential within the sector, both for food security and the sector’s contribution to GDP, but this requires a strategy of support which enables farmers to boost productivity on the best land, while using less productive areas for environmental gain.
The report highlights the volatility of farm incomes. While the Total Income From Farming (TIFF) has significantly increased since the Covid-19 pandemic (£5.1b in 2020 to £7.7b in 2024), sharp changes year-to-year and between livestock and arable incomes make it difficult for businesses to plan with confidence. Defra’s Farm Business Income (FBI) figures show that arable farm incomes dropped by around 73% between 2023 and 2024, and despite improvements, the figure of £49,700 in the latest statistics was bolstered by diversification and agri-environment schemes. Arable farming on its own was still considered a loss-maker.
HCR Law states that this raises fundamental questions about the sustainability of domestic food production and self-sufficiency. Currently, the UK can produce around 60% of its total food requirements. Quoted in the report, Abi Reader, president of NFU Cymru, says that policy discussions often overlook primary production.
“Too often, government focuses on the food and drinks sector, and that has been the area of conversation instead of farmers and growers,” she says. “The logistics of food production and how that produce arrives in the shop are not given the prominence they deserve.”
Long-term planning
Cath Crowther, regional director for the East of England, Country Land and Business Association (CLA), highlights the need for a reset on water abstraction licences. “…agriculture is often at the bottom of the priority list compared to other users. There’s a huge opportunity for us to be producing more fruit and vegetables in the county.”
She adds that wider abstraction windows, during flooding, for example, and greater planning permissions for on-farm reservoirs would go some way to boosting productivity, but that growers struggle to get the various departments to align. The CLA’s own Rural Powerhouse report notes that the rural economy is around 16% less productive than the national average. If efforts were made to close this gap, it would add around £4.3b to UK Gross Value Added.
The report notes that policy around planning permissions has become increasingly complex, with local authorities interpreting rules differently or rigidly adhering to outdated local plans, which leads to unnecessary delays and refusals. The piecemeal process of applying for a change of use, then adding an extension, as an example, incurs multiple fees and prolongs the process. HCR Law calls for regulations to be streamlined and guidance to be improved to ensure consistency between councils to encourage innovation.
Cutting red tape
Farming is one of the most heavily regulated sectors in the country, as it spans agriculture, waste and transportation, and the UK has some of the most stringent standards. EU rules still in place are ‘gold-plated’, whereas member states have some discretion in how these are implemented, according to the report.
Aled Owen, partner, agriculture regulatory, HCR Law, notes that proper regulation is important, and that the high standards of the UK across welfare, environmental compliance and quality could be beneficial to international trade. However, the resulting increase in production costs has the adverse effect of making imports cheaper. “The question needs to be: can higher costs associated with higher regulation be justified, or is there a case for a more nuanced approach as seen in many of the European agricultural economies?
“…regulation must protect food safety and the environment without creating avoidable cost and uncertainty that undermine competitiveness.”
Price takers
Steve Thomas, partner, commercial, HCR Law, highlights the restrictive nature of supply contracts that do not take into account unexpected market shifts or adverse weather events. Dairy farmers who have invested heavily in equipment and livestock may find themselves selling at a loss or face non-compliance penalties should the buyer reduce their order or if the market changes.
The report calls for more flexible terms that allow for changes in supply and demand, as well as offering fairer exit clauses. Looking again at the dairy industry, the Fair Dealings Obligations (Milk) Regulations 2024 aim to improve the imbalance of power between primary producers and buyers, though its impact is yet to be seen.
“Primary producers, such as farmers, are often ‘price takers’ rather than ‘price setters’, making it difficult to negotiate from a position of strength, particularly with perishable goods. What the sector needs most is stability, fairness, and transparency.”
An even footing
The report concludes that the industry is at a crossroads, with sustainable farming only possible when farms are financially viable. “UK farmers have the capability, ingenuity and appetite to deliver more… but cannot do so while navigating systems that limit growth, distort risk and stifle innovation.
“To secure a resilient agricultural future, we believe there needs to be greater emphasis on food security, placing food production on at least an equal footing with environmental policy and creating the conditions for profitable, forward-looking farm businesses.
“That means regulatory proportionality, a planning system that supports diversification, realistic labour solutions, fairer contractual relationships and sustained support for the adoption of productivity-enhancing technologies.”