However, despite no mention of the rural sector in the Chancellor’s speech and a slight decrease in the real-term funding for Defra, rural and farming bodies have cautiously welcomed the outcome.

Combinable crop yields could go either way after one of the driest springs in living memory. Forecasts suggest the crops could be heading for one of the worst seasons on record if there isn’t more rainfall soon. The good news for arable farmers is that the government will review trading practices in the combinable crops sector to ensure fairness and improve the position of growers in negotiations.

FOOD & FARMING

Harvest prospects on a “knife edge” after record-breaking spring
UK farmers are experiencing a challenging farming year due to the warmest spring on record and the driest conditions in over 50 years. According to analysis by the Energy and Climate Intelligence Unit, prolonged dry conditions have left key arable crops in poor condition, with yield potential significantly reduced. This follows a devastating 2024 harvest, the third-worst on record, which was caused by extreme rainfall during the winter of 2023/24. The Agriculture and Horticulture Development Board reports the damage from the spring drought may already be done, despite recent rainfall. Forecasts suggest unless crop conditions improve rapidly, 2025 could rank among the worst harvests in UK history; however, much hangs upon rainfall in the coming weeks.

Review of fairness in the combinable crops supply chain
The government is going to investigate fairness in the supply chain for combinable crops. This initiative is part of the broader “New Deal for Farmers,” and seeks to ensure arable producers benefit from fairer, more transparent, and legally enforceable contracts. Led by Defra, the review will examine pricing structures, supply volumes, data sharing and dispute resolution mechanisms. It follows recent reforms in the dairy and pig sectors, such as the Fair Dealing (Milk) Regulations, which came into effect on 9 July 2024 and the Fair Dealing (Pigs) Regulations. It is intended to strengthen the position of growers in negotiations with processors and buyers. A public consultation will be launched to allow farmers and the supply chain to feed in their views.

Consumers turning away from ultra-processed foods
The Agriculture and Horticulture Development Board (AHDB) suggests increasing awareness of ultra-processed foods and the potential health risks associated with their consumption may be encouraging consumers to opt for dairy products. Additionally, an increasing focus on personal health and wellbeing, such as heightened awareness of gut health and a preference for protein-rich foods, is also affecting purchasing decisions. Over the past year, the dairy category experienced a 2% increase in value, despite a 0.5% decline in sales volumes. However, certain products achieved significant growth, reflecting these changes in consumer preferences.

According to new insights from the AHDB, cottage cheese has experienced a striking comeback. The category delivered a 26.2% year-on-year increase in value and a more substantial 29.4% rise in volume. The growth has been attributed to health consciousness, as well as cottage cheese’s versatility in social media-driven trends, such as meal prepping. Kefir, a fermented milk drink known for its probiotic benefits, has also achieved significant growth. Value rose by 37.1% year-on-year, with volume not far behind at 34.7%.

Cattle electronic identification to become mandatory
The government has announced electronic identification will become mandatory for all newborn calves in England from 2027, marking a significant step forward in biosecurity and livestock traceability. The new system, utilising low-frequency technology, will enable cattle to be scanned electronically during movements, replacing the current manual tag-reading process. This reform is part of a broader strategy to modernise cattle identification, registration, and movement reporting. It aims to simplify regulations, improve disease control and enhance the UK’s ability to respond swiftly to outbreaks. A new digital reporting system will also be introduced to streamline processes for farmers, markets, and abattoirs.

POLICY

What does the spending review mean for rural?
On 11 June, Chancellor Rachel Reeves delivered the 2025 Spending Review in the House of Commons, outlining departmental budgets through to 2029. Before the Spending Review, there was some concern about significant cuts to rural funding, which have largely proven unfounded. While the Chancellor's speech focused heavily on defence, migration, energy, and housebuilding, it notably omitted any direct reference to the rural sector, despite its strong ties to energy, infrastructure, and housing development.

From 2026-27 to 2028-29, the government has pledged to invest over £2.7 billion annually in sustainable farming and nature recovery. This includes an average of £2.3 billion per year through the Farming and Countryside Programme, slightly down from the previous £2.4 billion and up to £400 million for additional nature recovery schemes. A major component of this funding will support the expansion of Environmental Land Management schemes, with the budget set to rise from £800 million in 2023-24 to £2 billion by 2028-29. This uplift is to be partly funded by phasing out legacy subsidy payments, like delinked payments, which are considered to offer a limited return on investment. In 2026 and 2027, to calculate a farmer's delinked payment, Defra plans to apply a 98% reduction to the first £30,000 of their reference amount, and any amount above £30,000 will be cut by 100%. This will mean the maximum delinked payment is £600 compared to £7,200 in 2025.

Elsewhere in the review, capital investment was a clear priority, with infrastructure spending, particularly in transport and housing, likely to have direct implications for rural land. The statement included £39 billion for a 10-year affordable homes programme alongside additional funding for HS2. Meanwhile, Defra’s overall capital allocation of £16 billion and a separate £4.2 billion commitment to flood defence over three years suggests rural resilience remains on the agenda, even if not explicitly acknowledged in the Chancellor’s address.

While the figures suggest an increase in funding for Defra, this translates to a decrease in “real spend” when adjusted for inflation, though it is still viewed as a “meaningful” statement, according to the CLA. The NFU has cautiously welcomed the settlement, although it has warned farmers will have to do more with less.

Changes to the Nature Restoration Fund are considered
The Planning and Infrastructure Bill, which began its passage through Parliament in March, has recently been debated in the House of Commons following a proposed amendment by Labour MP Chris Hinchcliffe. The amendment centred on the Nature Restoration Fund (NRF), a provision that aims to establish a central fund for nature restoration. Developers would contribute to this fund, which Natural England would manage to deliver natural restoration work on their behalf.

Mr Hinchcliffe's amendment aimed to ensure the conservation status of certain environmental features is improved before development can proceed in areas where Natural England anticipates significant harm. The purpose of the amendment was “to ensure the NRF delivers the right nature protection” and safeguards specific habitats that might be affected by development. He suggested this approach would decrease the likelihood of restoration efforts failing to recreate the same habitat types that were affected.

In response, Housing Minister Matthew Pennycook stated the government had “no time for spurious and misleading attacks” on the fund. He added his department would continue to explore ways to strengthen the fund to build public confidence. The amendment followed concerns raised by the Office for Environmental Protection and various nature organisations, who questioned whether the fund was fit for purpose and warned it could divert attention from existing schemes such as Biodiversity Net Gain.

The amendment was ultimately defeated, with 180 Members of Parliament voting in favour and 307 against, including 15 Labour MPs voting against the government. The Bill continues its progress through Parliament.

Wales: Environment Bill
The Welsh Government has introduced a new Environment Bill that could significantly reshape the country's approach to protecting nature. Officially titled the Environment (Principles, Governance and Biodiversity Targets) (Wales) Bill, it was brought forward in June 2025 by Deputy First Minister and Climate Change Secretary Huw Irranca-Davies.

The Bill aims to tackle the twin crises of climate change and biodiversity loss, setting out a legal duty for public bodies to consider environmental principles when making decisions and proposing the creation of a new watchdog, the Office of Environmental Governance Wales. This independent body would hold public authorities to account, much like the Office for Environmental Protection does in England. Another key part of the Bill is a new framework for setting biodiversity targets, aiming to halt and reverse the decline in nature across Wales.

The response has been mixed. Environmental groups have welcomed the Bill as a long-overdue move to strengthen protections for nature in Wales. Farmers Union Wales has raised concerns the Bill could increase the regulatory burden on farmers in Wales. The Bill is currently at Stage 1 in the Senedd, where the Climate Change, Environment and Infrastructure Committee is examining it.

ENVIRONMENT & NATURAL CAPITAL

Farmers will ditch environmental schemes if funding ends
Nearly all farmers (95%) would scale back environmental land management if funding for the Sustainable Farming Incentive and Countryside Stewardship schemes were to be withdrawn. The survey by the CLA, involving 460 farmers, was taken ahead of the government’s spending review, amid reports the Treasury may reduce support for post-Brexit Environmental Land Management schemes. Most respondents (76%) said they cannot afford to meet scheme requirements without financial aid. Prominent organisations, including the CLA, NFU, National Trust, and Soil Association, have jointly warned funding cuts would be “catastrophic” for environmental progress, threatening biodiversity, soil health, and water quality. Thankfully, the fears proved unfounded at this stage, but it does highlight the dependence on public or private support to deliver our national environmental targets.

Wales: New protections for Ancient Woodlands
The Welsh Government has announced a strategic plan to safeguard ancient woodlands, recognising their ecological and cultural importance. Key actions set out include:

• Enhanced planning policies to strengthen the protection of ancient woodland.
• Forestry legislation amendments to better protect veteran trees during felling operations.
• Air quality improvements and new legislation to reduce pollution impacts on woodland.
• Support through the National Forest for Wales and Woodland Investment Grant to restore ancient woodland.
• £19.8 million in funding to support woodland resilience, including restoration and buffer planting.
• New monitoring indicators developed by Forest Research to track progress.

Consistent failure to take sludge seriously
A coalition of environmental campaigners has signed an open letter to the government, urging that the rules governing the testing and regulation of sewage sludge spreading on farmland be updated. Around 3.5 million tonnes of sludge, the waste produced from sewage at wastewater treatment plants, is spread annually across UK fields as fertiliser. Evidence suggests this sludge contains harmful contaminants, including microplastics and “forever chemicals”, which remain in the environment and have been linked to cancer.

Since 2020, Environment Agency proposals to update the regulatory framework have been repeatedly delayed due to ministerial inaction. The campaigners warn that current rules, dating back to 1989, fail to address modern chemical threats. Unlike the clean water discharged from wastewater treatment plants, the sewage sludge is considered “exempted waste”, meaning it is not subject to routine chemical checks. The water industry is concerned farmers may reject the use of sludge, leaving them with millions of tonnes of sewage sludge with no viable disposal alternative. Defra has confirmed the Water Commission will review the regulatory framework.

Call for evidence: the private sector's role in nature recovery
A call for evidence has been launched to explore expanding the private sector's role in nature recovery. It seeks information and insights into how the business sector can be supported to invest in nature recovery, particularly in industries that significantly impact or rely on nature. This follows various commitments from the government to “mobilise” and “improve the flow” of public finance into nature recovery and acts on a recommendation made by the Corry Review.

The government said while voluntary actions by businesses to engage with the Woodland Carbon Code and Peatland Code were appreciated, they were insufficient to achieve the necessary environmental improvements. The call for evidence asks for views on policy principles for future policy design, aiming to incentivise the private sector to align with the Environment Act targets. There are four objectives:

1. Economic growth: Enhance business productivity, resource efficiency and foster green industries.
2. Business certainty: Provide policies to help businesses invest confidently in nature-positive practices.
3. Innovation: Encourage flexible, non-restrictive regulation to achieve environmental goals.
4. Fair burden sharing: Ensure investment responsibilities are distributed fairly.

The call for evidence will run until 10 August and asks various sector and outcome-specific questions, focusing on water, tourism, flood management, food production, and international nature finance.

PROPERTY & DEVELOPMENT

Landowners lobby for higher mobile phone mast rents
Landowners are urging the government to halt reforms that reduce phone mast rents by up to 90%. The Electronic Communications Code changes aimed to accelerate the rollout of 4G and 5G by lowering the costs for operators to access private land. A letter to Lord Livermore from industry groups, including the British Property Federation and the NFU, says changes introduced in 2017 have damaged the relationship between mobile tower operators and landowners.

Approximately 6,200 sites, or about 16% of the UK's total, are still regulated under the Landlord and Tenant Act 1954, and their rents fall outside the reforms introduced by the Electronic Communications Code. The government is currently consulting on regulations to bring the rental valuation of these agreements into the scope of the Electronic Communications Code when they are renewed.

Electrical infrastructure code of practice
A code of practice covering how rights over land are secured for electricity infrastructure projects has been released. Developed collaboratively by the Central Association of Agricultural Valuers, the Energy Networks Association, and the Royal Institution of Chartered Surveyors, the code sets out best-practice principles to ensure landowners, farmers, and tenants are treated fairly during the planning and delivery of major energy projects. The code has been endorsed by the CLA, NFU, Scottish Land and Estates and other rural groups. The guidance is designed to encourage transparency and professionalism when negotiating access and compensation for land affected by new or upgraded electricity lines. It encourages early engagement, clear communication and balanced outcomes that respect both infrastructure needs and rural livelihoods. The code is currently being trialled and will be reviewed after 12 months to assess its effectiveness.

BUSINESS & economy

“Goldilocks zones” could help the UK achieve net-zero
Recent research conducted by the British Geological Survey has identified eight regions within the United Kingdom, referred to as “Goldilocks zones”, which possess subsurface conditions ideally suited for a variety of clean energy technologies. These geological super-regions are poised to play a crucial role in the UK's transition to net-zero emissions. Their unique geological characteristics make them suitable for supporting geothermal energy, carbon storage, mineral extraction, and wind infrastructure within compact areas.

The economic potential of these zones is significant, with estimates suggesting they could attract up to £40 billion in annual investment, thereby facilitating job creation and regional development. Michelle Bentham, the Chief Scientist at the British Geological Survey, recommended that strategic planning of subterranean spaces could enable decision-makers to avoid committing to a single technology in areas where multiple or alternative technologies might be more advantageous. For more information on mineral opportunities, contact Stuart Jeffries of the Savills Minerals and Waste department.

OTHER RURAL NEWS

And finally… Can’t handle the heat?
Have you ever regretted choosing the Vindaloo over the Korma? Or wish you had gone for lemon and herb rather than extra hot? Such regret could be a thing of the past with a new “anti-spice” condiment to tame the tongue-tingling inferno of a spicy meal. Researchers at Ohio State University have discovered three natural compounds (capsianoside I, roseoside and gingerglycolipid A) that reduce the perceived heat of chilli peppers.

The heat of chilli peppers has been attributed to two compounds: capsaicin and dihydrocapsaicin. Their overall pungency has been calculated based on the concentration of these two molecules in each pepper. TRPV1 receptors in our mouth are responsible for perceiving the pungency of chilli peppers and are triggered by molecules like capsaicin. Researchers believe the newly identified heat-suppressing compounds desensitise the receptors and therefore reduce the stimulus created by chilli peppers that leads to the culinary conflagration.

If you have queries about any of the articles, please contact us.