Policy paper

Farming Profitability Review: terms of reference

Published 7 April 2025

Applies to England

1. Vision

Farmers are essential to the sustenance and spirit of our country. They are the custodians of our environment and the food our farmers produce keeps the country fed.

Farmers have always had this vital role. In the early twentieth century, during an explosion in population growth, Britain faced food shortages and farmers collaborated with scientists to increase yields. During World War 2, food from our farmers sustained the war effort. More recently, faced with global supply shocks during the Covid pandemic and invasion of Ukraine, farmers again grew the food that kept us fed.

Farmers also carry great responsibility for the environment we all share. Restoring nature is vital to food production, not in competition with it. Healthy soils rich in nutrients and organic matter, abundant pollinators and clean water are essential for sustainable food production. They are the foundations farm businesses rely on to produce high crop yields and turn over a profit. Without nature, we cannot have long-term food security.

The methods of farming have changed over the years, and the challenges faced by farmers have too. Farmers have had to evolve and find new ways to keep the nation fed and support the environment. We also know farmers should not be expected to be wholly altruistic, nor are they farming only to keep the traditions of their ancestors alive. Farmers are business owners too, and farming needs to be a profitable business.

This government has heard the challenges faced by farmers, and the difficulties faced in realising satisfactory profits from their hard work. We understand farming is a business that carries great risks as well as the potential for great financial and personal reward. External pressures such as adverse weather conditions, pests and diseases create challenges for farming businesses, and it is essential that there are enough incentives for farmers.

The Secretary of State for the Environment, Food and Rural Affairs (Defra) has asked Baroness Batters to lead work to advise him on profitability, to identify recommendations and actions that will support farming profitability as part of this government’s New Deal for Farmers.

These terms of reference will be regularly reviewed and may be updated as necessary.

2. Key objectives for the Farming Profitability Review

The key objectives for this review are to identify and assess policy options for Defra Secretary of State to support farming profitability, to provide recommendations and support implementation where applicable. The review lead, and any recommendations provided, should consider:

• how farmers can reduce barriers to profitability, increase profit and manage their own risk to improve financial resilience, such as through embracing innovation, improving productivity, increasing market access and using risk management tools
• how the supply chain can support farm profitability such as through greater transparency, cooperation and ensuring a fairer distribution of risks, rewards and responsibilities
• whether there are other ancillary activities that farmers can undertake to support profitability and wider economic growth

In doing so, the Farming Profitability Review Lead will:

• develop reasoned and evidence-based recommendations on priority policies and interventions that both the government and industry could take to address the above objectives. These should be set out in a report with pragmatic recommendations to the Defra Secretary of State to tackle farming profitability over the short, medium and long term. Where recommendations relate to other government departments, or parts of industry, this should be made clear and be based on engagement and consultation with those stakeholders.
• provide expert opinion to Defra on matters relating to farm profitability on invitation by the Secretary of State during the period of the review
• have regard to and offer input to the Food Strategy, Farming Roadmap, agricultural and food regulations and the Land Use Framework, as well as wider government missions and priorities, including for growth

These terms of reference may be subject to change as work progresses and flexibility may be required to ensure effective delivery.

3. Scope and delivery of the commission

The Farming Profitability Review Lead will be a six-month position. The scope will be England only except where policy is reserved.

Recommendations must also be consistent with the UK Carbon Budget framework, as set out in the 2008 Climate Change Act, the Environmental Improvement Plan 2023 and consider alignment with net zero objectives.

4. Approach and deliverables

Baroness Batters has been appointed as the Farming Profitability Review Lead and will be supported in this work by a small secretariat of Defra officials, who will in turn interface with the department on further advice and expertise. Baroness Batters will report to the Secretary of State on a regular basis to provide an overview of progress.

Her important work in this role will lead to a substantive written report to government with recommendations to the Secretary of State to improve farming profitability. This will be an internal report submitted to the Secretary of State for his review.

Engagement across all relevant stakeholders will be essential. The Farming Profitability Review Lead will need to contribute expertise on the food and farming sector and chair meetings with stakeholders, providing leadership and encouraging diverse and representative contributions, to ensure an appropriate degree of consensus across industry with all sectors and regions.

5. Timing

The final report will be delivered within six months of appointing the Farming Profitability Review Lead.