Five years on – has the Agriculture Act delivered?

Five years ago, the first major overhaul of agricultural legislation took place in seven decades. The Agriculture Act 2020 received Royal Assent on the 11 November and included important provisions for financial assistance that underpin the basis of the Environmental Land Management (ELM) schemes.

At the time the act came into force, the country was in the midst of the Covid-19 pandemic which highlighted some of the strengths and weaknesses in the food and grocery supply chains – increasing pressure to support food security. However, while there were theoretical concerns about impacts of geopolitical changes, conflict, and climate change, nobody really expected all these to be such prominent features as they have been over the last few years. So, in this increasingly unpredictable world, has the Agriculture Act stood the test of its early years, and is it fit for the future?

The groundwork for the Agriculture Act started with ambitious plans from Michael Gove, (Defra Secretary of State from June 2017- July 2019). He introduced the ‘Health and Harmony’ consultation in 2018 that investigated wide ranging options for domestic agriculture policy outside the EU, and introduced the concept of payment for public goods as a way forward.

The bill was initially introduced in September 2018 (although held up by the proroguing of Parliament), and was later reintroduced in January 2020 by Theresa Villiers and taken through Parliament by George Eustice who became Defra Secretary of State in February 2020.

The act was described by George Eustace as a ‘landmark’. It introduced legislation under a number of main themes:

• Public money for public goods – to reward farmers and land managers for environmental management to improve air and water quality, enhance biodiversity and soil health, mitigate climate change, promote animal welfare and increase public access to the countryside
• Financial assistance for productivity growth, innovation and resilience
• Phasing out of direct payments – Basic Payment Scheme (BPS) – over a seven-year period and by 2027
• Fairness in the supply chain and market transparency to enable regulation of unfair trading practices and support producer organisations
• Requirements to report on UK Food Security within three years
• Establishment of the Trade and Agriculture Commission to advise on impacts of trade deals on UK farming and food standards, but it stopped short of having legal requirement to meet domestic standards
• Tenancy reform to abolish the commercial unit test under Agricultural Holdings Act (AHA) tenancies, and shifted focus to suitability and business capability for succession

The CLA played an important role in shaping the Agriculture Act. We did this by responding to the consultations, publishing the CLA Land Management Contract in 2018 as a blueprint for the payment for public goods model, and working with MPs and peers to place amendments as the bill went through Parliament. During its development and progression, the CLA focused on three key areas of the bill:

• Transition – arguing for a carefully managed shift from the BPS to the new ELM schemes, warning that steep cuts without alternatives would harm farm businesses
• Trade – supported protections for food and environmental standards in trade deals
• Tenancies – worked to ensure that the tenancy reform under the act supports both landlords and tenants

The CLA backed the ambitions and the move to payment for public goods. However, Mark Bridgeman (CLA President at the time), warned that while the act was a step forward, implementation would be key and called for an ongoing engagement with the industry to ensure that the transition worked for rural businesses.

The success of the Agriculture Act depends on the perspective. Overall, as a piece of legislation it has provided a stable framework on the priority areas at the time, and has proven robust in the face of global and domestic disruptions.

The provisions for financial assistance for public goods and productivity growth allowed the development of the ELMs, as well as the investment into productivity and innovation and the Animal Health and Welfare Programme, and appears to provide the flexibility to address evolving needs. There were some hard fought inclusions, including soil health and plant and livestock genetics that are perhaps currently underused.

The legislation does not compel the government to make any payments, of course, so the ongoing challenge is making the case for the funding. The Agriculture Act is closely aligned with the Environment Act 2021 which sets apex targets across a range of themes, and is an important part of the justification for funding. The good news is that Defra negotiated a good agriculture budget settlement in the June 2025 Spending Review providing £8bn over three years.

However, as the CLA predicted, the challenge has been in implementation. Despite all the assurances from Defra and the engagement with the sector.

CLA concerns about misaligned timings between cuts in direct payments and new schemes being introduced has come to fruition, and worse with the sudden closures of Sustainable Farming Incentive (SFI) in March and the capital grants over spend the autumn before.

Nonetheless, the CLA remains supportive of the Environmental Land Management (ELM) schemes and is continuing to work with the government to ensure that the schemes deliver for both farming and the environment in the long-term. The codesign process at the early stages was supported across the industry, and the foundations for the SFI were good, providing flexibility and choice for different farming systems and locations. There was always an expectation that the schemes would continue to evolve over time, but our preference would be for a more planned approach to avoid gaps in funding.

The phasing out of direct payments was set in law with a seven-year transition period, although it did not explain how this would be done. There are provisions to extend the period, but clearly they have not been used. In fact, the industry expectations of a smooth run out were dashed when delinked payments were rapidly reduced in the last three years to 2028 – although this was balanced by the boost to funding for the SFI.

There has been good progress with fairness in the supply chain. Regulation for contractual fairness between producers and purchasers is in place in the milk sector (2024) and the pig sector (2025). Reviews have been completed or are underway in the combinable crops sector, fresh produce and eggs and poultry. An Agricultural Supply Chain Adjudicator (ASCA) has also been appointed to enforce the new fair dealing regulations. Fairness in the supply chain is a challenging area, as regulation and enforcement can only go so far, with the focus on contractual fairness. There are ongoing problems in accounting for rising productions costs, variable demand, perishability and reinvestment needs.

The act probably under-emphasised the importance of food security and the government has committed to an annual United Kingdom Food Security Report , rather than the minimum every three years as set out in the act. This is in response to the challenges of Covid-19, conflicts and climate, all of which impact supply chains and trade. It will be vital to monitor land use changes in the future, and the forthcoming Land Use Framework should help provide the spatial data to evaluate impacts.

The tenancy reform part of the Agriculture Act was limited, but the focus on reform has not diminished. The Rock Review, published in October 2022 and updated in May 2023, provided a platform for greater examination of the tenancy issues in relation to the agricultural transition from direct payments. The report resulted in creation of the Farm Tenancy Forum which is now the main platform for progressing the recommendations, including the appointment of a Tenant Farming Commissioner.

The financial assistance was wide in scope, but the focus on environmental public goods means that it lacks mechanisms to support climate change adaptation and respond to the volatility of input costs and output prices.

However, the main problem for the industry and the environment is the lack of a long-term commitment to funding and stability of schemes. This is perhaps outside the scope of the act, but is something that must be addressed. This is as much for the environment as it is for resilience of farming businesses. The environmental outcomes from the schemes will not happen overnight, so there must be stability of funding for the future.

That is not to say schemes should stay exactly as they are, as value for money for the taxpayer needs to be considered, but a more forward thinking perspective is needed. Innovation should be encouraged, for example, finding mechanisms for blended finance models where corporate businesses that impact on or depend on the natural environment can contribute.

On trade, the industry campaigned to include requirements that imports in trade agreements meet domestic environmental and animal health and welfare standards. However, this was not included, and the Trade and Agricultural Commission has an advisory role only. This remains a risk to certain sectors as new free trade agreements are negotiated, although there is now more recognition of the issues.

Food security is a more visible priority now and there are many supporters of targets for domestic production. This would provide the focus for investment in key sectors and critical infrastructure such as farm reservoirs and local abattoirs.

Finally, while the Agriculture Act is an important part of the future of farming and land use, it is by no means the only influence and how the industry transforms will be in the hands of those who manage the land.