Sustainable farming could prevent £150bn hit to UK economy, report warns

Scaling up sustainable farming could prevent a £150 billion hit to the UK economy by 2050, a new report has warned, as farmers face rising costs, falling margins and ongoing policy uncertainty.

The study, published by think tank Demos and supported by McCain Foods, highlights growing pressure on the UK food system and urges faster action to support the transition to more sustainable practices.

It suggests that adopting regenerative approaches could not only improve environmental outcomes but also boost farm profitability, with potential gains of £1.6 billion a year by 2035.

The analysis also points to wider economic benefits, estimating that nature restoration linked to sustainable farming could unlock £56.3 billion in natural capital within the next decade.

Reducing reliance on imported inputs is another key factor.

With around 60% of nitrogen fertiliser currently imported, the report says sustainable methods could cut input costs by £905 million annually and reduce fertiliser imports by £449 million each year.

The findings come amid warnings that the UK’s food system is under increasing strain, driven by volatile input costs, climate pressures and an uncertain policy landscape.

The report also highlights a gap in public awareness around the link between farming, climate change and food prices.

However, support for action rises significantly when those connections are made clear.

Around 61% of respondents backed increased government investment in sustainable farming, while 45% said it should be prioritised over other areas of spending.

Nearly a third said they would view the government more favourably if it stepped up support.

The report calls for stronger farmer collaboration, the development of regional agri-growth hubs and clearer environmental standards covering areas such as carbon, soil, water and biodiversity.

It also recommends action to address skills gaps and improve understanding of sustainable farming across the sector.

Dan Goss, lead researcher at Demos, warned of the risks of inaction, saying: “In an increasingly unstable world, Britain cannot build a secure economy on depleted land and fragile food systems.”

He added that sustainable farming is about “protecting the foundations of our economy and the financial security of citizens”.

Mr Young said farmers are already feeling the impact of climate volatility and shifting conditions.

James Young, vice-president of agriculture at McCain GB&I, said: “The Sustainable Farming Dividend report shows that sustainable practices strengthen the resiliency of our food system and protect farmers and their businesses.”

He added that while farmers are ready to lead change, they need “long term policy certainty and the right incentives to invest with confidence”.

The report warns that without coordinated action, the UK risks falling behind, but says a shift to sustainable farming could strengthen resilience, profitability and long-term food security.