Farming News - Private investment in UK farming drops by £260m as Gov looks to offset with grants
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Private investment in UK farming drops by £260m as Gov looks to offset with grants
New research has revealed that the agriculture sector saw the biggest cuts in investment in the last year, dropping by £270 million across private investors and government schemes.
New government capital grants for the sector offer some relief, though - at £150 million in total - there is still set to be a shortfall of more than £120 million compared to previous years.1
The business finance experts at money.co.uk business loans have analysed BVCA and government data to reveal how investment changed last year compared to the previous year across the UK economy.
Changes in private investment by sector:
|
| Amount invested (£m) | ||
Rank | Industry sector | 2023 | 2024 | Difference |
1 | ICT (Communications, computer and electronics) | 4,116.14 | 10,566.26 | 156.70% |
2 | Business products and services | 3,145.32 | 6,785.71 | 115.74% |
3 | Biotech and healthcare | 2,682.09 | 4,542.45 | 69.36% |
4 | Real estate | 110.24 | 184.34 | 67.21% |
5 | Construction | 69.88 | 110.23 | 57.75% |
6 | Chemicals and materials | 82.95 | 66.01 | -20.42% |
7 | Financial and insurance activities | 3,409.33 | 2,495.57 | -26.80% |
8 | Consumer goods and services | 4,018.61 | 2,791.62 | -30.53% |
9 | Energy and environment | 2,237.43 | 1,150.29 | -48.59% |
10 | Agriculture | 279.58 | 18.92 | -93.23% |
The agriculture sector has seen the biggest slash in private investment in the most recently documented year - with a drop of more than 90%. The sector saw private funding plunge from £279.58 million in 2023 to just £18.92 million in 2024.
Sectors with the most significant increase and decrease in the total amount of funds invested:
Rank | Industry | Funds raised through EIS or SEIS in 2022-23 (£m)* | Funds raised through EIS or SEIS in 2023-24 (£m)* | Percentage change 2022-23 to 2023-24 |
1 | Transport and Storage | £10,000,000 | £14,000,000 | +40.00% |
2 | Financial and Insurance | £111,000,000 | £121,000,000 | +9.01% |
3 | Arts, Entertainment and Recreation | £34,000,000 | £35,000,000 | +2.94% |
4 | Health and Social Work | £44,000,000 | £43,000,000 | -2.27% |
5 | Wholesale and Retail Trade, Repairs | £167,000,000 | £159,000,000 | -4.79% |
6 | Information and Communication | £750,000,000 | £650,000,000 | -13.33% |
7 | Professional, Scientific and Technical | £389,000,000 | £332,000,000 | -14.65% |
8 | Accommodation and Food | £50,000,000 | £41,000,000 | -18.00% |
9 | Education | £22,000,000 | £18,000,000 | -18.18% |
10 | Admin and Support Services; Public Admin, Defence and Social Services | £109,000,000 | £89,000,000 | -18.35% |
11 | Manufacturing | £300,000,000 | £240,000,000 | -20.00% |
12 | Electricity, Gas, Steam and Air Conditioning; Water, Sewerage and Waste | £17,000,000 | £13,000,000 | -23.53% |
13 | Real Estate | £4,000,000 | £3,000,000 | -25.00% |
14 | Construction | £17,000,000 | £8,000,000 | -52.94% |
15 | Agriculture, Forestry and Fishing; Mining and Quarrying | £17,000,000 | £7,000,000 | -58.82% |
*Figures have been rounded to the nearest million
The agriculture, forestry, fishing, mining, and quarrying sector also experienced the most severe drop in the total amount of funds invested through EIS and SEIS in the last year, falling by almost two-thirds (58.82%) from £17 million in 2022-23 to just £7 million in 2023-24.
While this industry plays an essential role in food and energy, there are some barriers that can deter investors. One of these could be the uncertainty around biodiversity loss and global warming. Given that more than half of global GDP relies on biodiversity, this industry faces heightened economic risks from volatile raw material prices and potential disruptions in ecosystems.2
Further study insights:
- The sector also experienced one of the steepest proportional declines in the number of firms receiving government investment between 2022–23 and 2023–24, falling by 25%.
- In the same period, agricultural and other relevant firms benefitting from these schemes received an average of £233,333 per business. As a result, the sector ranked 12th compared to other industries, receiving more than £240,000 less per business than the leading sector - finance and insurance - at an average of £474,510 per business.
Joe Phelan, money.co.uk business loans expert, comments:
“The key driver of growth is capital. If you miss out on securing external funding, you could risk losing your competitive edge. Securing financial aid can be the boost your business needs to succeed in your chosen industry. For example, securing financial aid allows your business to scale up faster than relying on company cash flow. You can hire extra staff, invest in equipment, or take on more projects, which could allow you to seize opportunities in new markets.
“In addition, access to funding at the beginning of your business journey doesn’t just support your current operations; it provides the freedom to innovate. With financial aid in place, you can invest in research and development and explore new technologies. Whether building a more sustainable process or introducing a new product to market, funding can help bring your best ideas to life faster.
“However, not every sector attracts consistent investment. But even if your business operates in a less-invested industry, that doesn’t mean you’re out of options. For sectors with low or declining levels of investment, business loans can help bridge the financial gap and give you quick access to funds to scale your business. Whether you're investing in equipment or expanding operational capacity, loans offer predictable, scalable support that isn’t tied to investor preferences.”
Sources:
1-https://www.gov.uk/government/news/150-million-in-farming-grants-successfully-allocated
2-https://www.axa-im.co.uk/responsible-investing/insights/why-should-investors-care-about-biodiversity