A transition to sustainable farming could prevent a £150bn hit to the UK economy by 2050, according to a new report from Demos, supported by McCain Foods.

The report, The Sustainable Farming Dividend, warns that the UK’s food system is under mounting pressure from rising input costs, uneven farm profitability, and ongoing policy uncertainty. It argues that regenerative and sustainable farming practices could play a central role in strengthening food system resilience while delivering significant economic gains.

Among its key findings, the report estimates that nature restoration linked to sustainable farming could unlock £56.3bn in natural capital by 2035. It also suggests farm profitability could increase by £1.6bn annually over the same period, a notable intervention in a sector where nearly one in five farms currently operates at a loss.

Reducing reliance on imports is another major lever. With around 60 per cent of nitrogen fertiliser currently imported, the report finds sustainable practices could cut overall input costs by £905m per year, including a £449m reduction in fertiliser imports.

Beyond direct economic benefits, the report highlights the role sustainable farming could play in stabilising food prices, an increasingly sensitive issue as cost-of-living pressures continue to weigh on households.

However, it also identifies a gap in public awareness. While understanding of the links between farming, climate, and food prices remains limited, support for intervention rises sharply when those connections are made clear.

The research found 61 per cent of the public would back increased government investment in sustainable farming, with 45 per cent saying it should be prioritised over other spending areas.

The findings point to what the authors describe as a clear “window of opportunity” for coordinated national action, with public sentiment aligned behind reform.

To capitalise on this, the report calls on government to accelerate efforts across three core areas: strengthening partnerships across the agricultural sector, improving measurement and delivery of nature outcomes, and addressing knowledge and skills gaps.

Recommendations include scaling farmer collaboration initiatives, developing regional agri-growth hubs, and creating standardised baselines for carbon, soil health, water, and biodiversity. It also urges a review of skills gaps through Skills England to ensure farmers are equipped to transition effectively.

Dan Goss, lead researcher at Demos, said the economic case for change is now unavoidable: “Sustainable farming is not just about protecting nature. It is about protecting the foundations of our economy and the financial security of citizens.”

James Young, VP of agriculture at McCain GB&I, added that while farmers are ready to lead the transition, greater support is needed across the value chain: “What is clear is that farmers cannot be expected to make this transition alone. They need long-term policy certainty and the right incentives to invest with confidence.”

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