Why Are British Farmers Quitting?

When I stand in a farmyard and ask a farmer how things are going, I rarely get a quick “great, thanks.”

I get a pause. Then something honest.

I’ve been on a lot of farms this year, and the question I keep coming back to is simple. If we all say we want good British food, why are the people making it struggling to carry on?

So I went looking for the numbers. This is what I found, in plain English, with sources at the bottom so you can check my working. I’m not an economist, and I’ll say where the evidence is thin.

First, are farmers really quitting?

Some parts of farming clearly are.

  • Dairy. The AHDB counts 6,850 dairy producers in Great Britain as of April 2026. That’s the first time the number has fallen below 7,000, close to 200 fewer than a year earlier, and a 15% drop in five years. An AHDB analyst described farmer sentiment as “largely negative with squeezes on both milk prices and costs of production.”
  • Farm businesses overall. Cynergy Bank’s analysis of ONS figures found closures have outnumbered new openings every quarter since mid-2021, a net loss of 9,925 farms. In the year to September 2025, 6,270 agriculture, forestry and fishing businesses ceased trading, the highest since the ONS records began in 2017. That figure includes forestry and fishing, so it isn’t farming alone, and it’s a bank’s analysis, not an official count.

So yes, the exits are real. The next question is why.

Reason one: farmers get a tiny slice of what you pay

You’ve probably heard that supermarkets squeeze farmers. It’s true that the share of the shelf price reaching the farm is small, but the detail matters.

A 2022 report from Portsmouth University and the Food Research Collaboration, Unpicking Food Prices, looked at what farmers earn from everyday products. The farmer’s cost to produce a 480g pack of mild cheddar was £1.48 against a £2.50 shelf price. For a 4-pack of beefburgers, it was 90p against £3.50. For an 800g loaf, the grain in it cost about 9p against £1.14.

The report’s bigger point was about profit, not cost. Farmers typically saw almost none of it, and for some products the processors took around ten times more profit than the farmer did. Sustain’s Vicki Hird described farms as “tiny players in the face of huge food industry buyers who hold all the cards.”

Supermarkets push back on this. In earlier evidence to a Commons committee, Tesco, Sainsbury’s and Morrisons all said their own margins are tight and that they don’t treat farmers unfairly. Tesco said it saw no evidence that price wars automatically lower farmer prices.

I’d be wary of picking a villain. A loaf of bread passes through a miller, a baker, a lorry, a warehouse and a shop before it gets to you, and each one takes a cut. What isn’t in dispute is who has the least bargaining power in the chain. A single farm selling to a handful of huge buyers can’t easily say no.

Reason two: the costs keep going up

Farming is one of the few businesses where you spend the money first and find out the price you’ll get months later.

  • Fertiliser is the big one for crop growers. AHDB said the key factor driving the expected rise in the cost of producing the 2026 harvest is the rise in fertiliser prices. It forecast the full cost of growing winter wheat at £1,659 per hectare, up 3% on the year, with labour and rent also expected to rise.
  • Feed is the pressure on livestock. Defra’s forecast for English dairy farms in 2025/26 had input costs rising by around 3%, driven largely by higher feed costs after the summer drought.

These aren’t headline-grabbing jumps, but a 2–3% rise on a business that runs on thin margins can erase a year’s profit.

Here’s the part I want to be fair about. The same Defra forecasts show English dairy farm incomes going up (from £154,000 to £224,000 on average, 2024/25 to 2025/26), while cereal farms fall from £49,500 to £17,000 and specialist pig farms from £126,500 to £75,000. These are forecasts, not final numbers. Farming isn’t one industry, and some sectors are doing far worse than others. That’s also why you’ll hear contradictory things from different farmers.

Reason three: the tax change

This is the one that made the news, and it’s the most emotional.

Until April 2026, farmland and farm businesses could usually be passed to the next generation without paying inheritance tax, under agricultural property relief. The government changed that.

According to the advisers I checked, here’s where it stands from 6 April 2026:

  • The first £2.5 million of qualifying farm assets per person still gets 100% relief.
  • Anything above that gets 50% relief, which works out as an effective inheritance tax rate of 20%.
  • Spouses and civil partners can combine their allowances, so a couple can pass on up to £5 million.
  • The tax can be paid in instalments over ten years.

The original plan, announced in October 2024, set the threshold at £1 million. After a lot of pushback from farmers, it was raised to £2.5 million. If you’d only read the 2024 headlines, the £1 million figure is the one you’d have in your head.

Is that fair, or not? People disagree, and I’m not going to pretend otherwise. The government’s argument is that the old rules let wealthy investors shelter money in farmland. Farmers’ argument is that land values have climbed so far that a perfectly ordinary family farm can be worth more than the threshold while earning very little cash. A lot of farm wealth is tied up in land and machinery, and you can’t sell a field to pay a tax bill and keep farming.

Banks and advisers say the uncertainty alone is pushing some families to sell or wind up early, and Cynergy’s CEO named rising costs, labour shortages and the inheritance tax changes as drivers of the closures. That’s one bank’s view, not proven cause and effect, but it matches what I hear on farms.

Reason four: the support is changing too

Farm subsidies used to be paid mostly by how much land you had. The Basic Payment Scheme is being phased out and replaced with schemes that pay for environmental work. That may well be the right direction. But the change has meant years of uncertainty, and farmers have said it’s hard to plan a business when the rules keep shifting.

I haven’t found a current survey on how many farmers are leaving because of this, so I’ll just say it comes up a lot when you talk to farmers.

What I saw on the farm

What stood out to me was how much of the farm’s income depends on going direct to the customer. When the farmer can sell his own milk himself, he decides the price and he keeps the margin. That isn’t an option for most farmers, which is a big part of why direct selling matters so much.

So what can you actually do?

I don’t want to leave you feeling gloomy and helpless, because there are real things that help. If you’ve been getting our Back British Farming emails, you’ll recognise them.

  1. Get to know a farmer or a butcher. Ask where the meat comes from and which farm. A butcher who buys from local farms is a direct line to someone who grows your food.
  2. Buy direct when you can. Farm shops, farmers’ markets, milk rounds, vending machines and veg boxes all put more of your money in the farmer’s pocket.
  3. Check the label. “Packed in the UK” isn’t the same as “produced in the UK”. The Red Tractor logo and the farm’s name where it’s given tell you more.
  4. Ask your supermarket where it sources from. Retailers respond to customer questions more than you’d think.
  5. Spread the word. Small farms don’t have marketing budgets. A recommendation to a friend is worth more than you’d think.

You can even search for a farm near you: https://www.onlyfarmers.co.uk/explore

None of this fixes tax policy or fertiliser prices. But every pound you spend directly is a pound that doesn’t go through the squeeze.

Ryan 🐮

 

This post reflects publicly available information at the time of writing and isn’t financial, tax or legal advice. Figures and rules change, so check gov.uk for the current position.

 

Sources:

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