Supporting Farmers Through Challenging Times

Farming has always been one of the most demanding industries to run, and recent years have only made it harder. While unpredictable weather has always been a worry, today’s farmers face a new mix of economic and political pressures that are making it more difficult to plan, invest and grow.

We’ve put together this short guide to highlight what’s affecting UK farmers right now and how smart financial planning and types of agricultural finance could help you navigate the road ahead.

The Challenges Facing UK Farmers in 2025

1. Extreme Weather and Climate Unpredictability

More frequent droughts and flooding are disrupting planting and grazing patterns, hurting crop yields and livestock productivity.

2. Changes to Subsidies and Policy

Ongoing post-Brexit reforms and the sudden closure of the Sustainable Farming Incentive (SFI) scheme in 2025 have left thousands without the support they were counting on.

3. Labour Shortages and Rising Costs

Since 2019, staffing costs have jumped by around 25% due to reduced migrant labour and higher wage obligations. With more increases expected in 2025 due to changes to National Insurance and the National Living Wage, many farms are facing pressure on all sides – especially with energy, insurance and feed costs also up.

4. Cheaper Imports and Trade Deals

New UK trade deals with the US and Australia are increasing pressure from lower-cost imports, particularly in beef and lamb, intensifying competition for local producers.

5. Succession Planning and Long-Term Viability

The cumulative effect of these challenges has led to a cash flow crisis for many farmers. Some are being forced to sell land or assets to stay afloat, with reports indicating that there has been a 50% rise in the number of farms and land blocks coming to market compared to the previous year. The imminent Inheritance Tax changes have also meant that farmers are reducing investments and beginning to retain cash flow as savings. An NFU survey in March 2025 reports that almost half of all family farms have paused or cancelled planned investment.

What the Latest Farm Data Tells Us/ Impact On Farm Accounts

The UK Farm Business Survey (FBS), funded by DEFRA and the Welsh Government, provides detailed data on farm incomes, costs, and outputs across England and Wales. The 2023/24 report, published on 19 December 2024, showed that:  

• The average Farm Business Income (FBI) rose by 12% to £96,100 – mainly due to better output prices and agri-environment payments.
• The average Basic Payment Scheme (BPS) income dropped by 21% to £18,300, though it still made up 40% of FBI.
• Agri-environment income increased by 14% to £10,600.
• Average farm liabilities rose 3% to £300,000, with pig and poultry farms reaching £1 million, up 22%.
• Investment in equipment is still happening – about 74% of farms invested in machinery, with tractor spending averaging £62,800, a 14% rise.

So while some numbers are improving, the reality for many is worse accounts and tighter cash flows.

Funding Options for Your Farm

Farming businesses often need to invest long before they see a return. Whether it’s buying new equipment, improving farm buildings, or diversifying into farm shops or eco-tourism, having the right finance in place can ease the strain.

Here are a few agricultural finance options worth considering:

• Working capital loans – to fund day-to-day costs like wages, supplies and overheads.
• Merchant cash advance – ideal if you sell directly to consumers through a farm shop or online.
• Asset finance – helps you invest in tools, machinery, and some fitting out for agricultural buildings.
• Property and development finance – can fund major building work or release equity from existing buildings to reinvest elsewhere.
• Invoice finance – If you sell to other businesses, this can speed up your cash flow by unlocking the value in your unpaid invoices. Newer providers use credit scores and open banking for fast, flexible options.

How We Can Help

We partner with Capitalise, who work with over 100 UK lenders, including those who specialise in rural and agricultural finance. We understand that no two farms are the same, and we’ll work with you to find funding that suits your needs, whether that’s keeping the business running or planning your next big investment.

If you’d like to explore your options, get in touch with us today – we’re here to help. Contact us on 01904 655202 or email enquiries@hghyork.co.uk.