British farming is facing a deepening crisis, with new figures revealing that fewer than half of closed farms and rural businesses are being replaced – the worst rate of any UK sector.
Research from Cynergy Bank shows that just 805 new farm businesses were established in the first quarter of 2025, while 1,890 closed during the same period.
That equates to a Business Health Score of just 0.43 – meaning fewer than one new enterprise is replacing every two closures.
This is a record low for the sector and significantly trails behind the national average, according to the bank's report.
By contrast, sectors such as real estate, finance, education and health all recorded more start-ups than closures, with property businesses achieving a robust score of 1.43.
The findings come from Cynergy Bank’s latest Business Births and Deaths Index, based on ONS data from January to March 2025.
The analysis also highlights broader economic concerns, including shrinking start-ups and rising turnover losses from business closures.
Across the UK, the number of staff employed per new business has dropped sharply, with new firms employing an average of just 2.64 people – down from 3.5 in 2017.
As a result, only 4,334 net new jobs were created in Q1 2025, a dramatic fall from 110,242 in the same period eight years ago.
Nick Fahy, CEO of Cynergy Bank, said, however, that the findings are particularly worrying for the country's rural communities.
“With less than half of closing agricultural businesses being replaced, farmers are grappling with rising costs, labour shortages, and the looming spectre of inheritance tax changes,” he said.
“It is concerning to see new businesses employing fewer and fewer staff, and the turnover of closing or relocating firms at an all-time high.
“Despite these sobering statistics, I strongly believe that the entrepreneurial spirit of the UK remains intact."
The report raises questions about the resilience of the rural economy, particularly as pressures mount from recent policy shifts, including the rise in National Insurance and proposed changes to inheritance tax.
