Government Support for Farmers - A Comparison of the United States, the European Union, the UK, and Scottish Crofting

25th January 2026

Government support for agriculture remains a central feature of advanced economies, but its scale, purpose and direction vary significantly between the United States, the European Union, and the United Kingdom.

While headline figures often suggest declining support, the reality is more nuanced.

In parallel, Scotland's crofting system, largely devolved to the Scottish Government, highlights how agricultural support is also shaped by geography, culture and rural policy goals rather than purely market logic.

The United States - Long-Term Decline in Structural Support, Short-Term Volatility

In the United States, it is not accurate to say that farm support is steadily declining in cash terms. In fact, government payments to farmers fluctuate sharply from year to year. Recent forecasts show very large increases in payments in 2025, driven mainly by one-off disaster relief, climate-related compensation, and ad-hoc congressional support packages. These spikes reflect political and environmental pressures rather than a permanent expansion of farm subsidies.

However, when viewed over several decades, structural support has clearly declined relative to the size of the farm economy. According to OECD measures, U.S. producer support as a share of gross farm receipts has fallen from around 20% in the 1980s to under 10% today. This indicates a long-term shift away from guaranteed price supports and routine income payments toward insurance-based systems, disaster relief, and market-oriented farming.

In short, U.S. farmers are not receiving steadily less money, but they are increasingly dependent on episodic government intervention rather than predictable baseline support. This makes farm incomes more volatile and politically sensitive.

The European Union - Large, Stable, and Centralised Support Through the CAP

In contrast, the European Union continues to operate one of the largest and most stable agricultural support systems in the world through the Common Agricultural Policy (CAP). The CAP accounts for roughly one-third of the entire EU budget, with funding exceeding €380 billion for the 2021-2027 period.

EU support differs from the U.S. model in three key ways:

Direct income payments remain central, often based on land area rather than production.

Support is predictable and annual, providing income stability.

Payments are increasingly linked to environmental and climate conditions, though these rules have recently been softened in response to farmer protests and rising costs.

For many EU farmers, CAP payments account for a very large share of net income, sometimes approaching or exceeding 40–50% in weaker market years. While market sales remain the primary revenue source, subsidies act as a crucial buffer against volatility.

Although CAP reforms have aimed to reduce distortions and improve environmental outcomes, overall support levels have not significantly declined. Instead, the EU has chosen to reshape rather than withdraw farm subsidies.

The United Kingdom: Reduced Direct Support and a Shift Toward "Public Goods"

The UK’s position has changed fundamentally since leaving the EU. Under the Common Agricultural Policy, UK farmers received substantial direct payments, largely based on land ownership. Since Brexit, these payments are being phased out, with full removal planned by 2027 in England.

They are being replaced with schemes that pay farmers for “public goods” such as:

Biodiversity

Soil health

Water management

Carbon reduction

While total UK agricultural support still amounts to several billion pounds per year, it is:

Lower than under CAP in real terms

Less predictable

More conditional and administratively complex

This transition has been financially challenging for many farms, particularly livestock, upland and marginal producers. Unlike in the U.S. or EU, the UK now provides less direct income stabilisation, exposing farmers more fully to market pressures.

Scottish Crofting - A Distinct System Under Devolved Control

Within the UK, crofting in Scotland occupies a unique position. Crofting is not simply an agricultural activity but a land tenure and community system, concentrated mainly in the Highlands and Islands. Responsibility for crofting policy lies largely with the Scottish Government, through devolved powers.

Crofts are typically:

Small-scale

Low-intensity

Marginal in purely commercial terms

As a result, crofting has always depended heavily on public support, not primarily to maximise food output but to:

Sustain fragile rural populations

Preserve cultural landscapes

Support Gaelic and island communities

Prevent land abandonment

Scottish Government support for crofting includes:

Direct payments (often inherited from CAP-style schemes)

Specific crofting grants (e.g. Croft House Grant, Crofting Agricultural Grant Scheme)

Area-based support for Less Favoured Areas

Environmental and grazing-based payments

While Scotland has broadly followed CAP-style support since Brexit, funding pressures and policy uncertainty remain significant. Crofting incomes are typically very low, and subsidies often make the difference between continued occupation and abandonment. Any reduction or re-targeting of support therefore has outsized social consequences compared with mainstream farming.

Unlike large-scale commercial farms elsewhere, crofting policy is explicitly about social resilience, land use and population retention, not just agricultural efficiency.

Different Models, Different Risks

Across all three systems, the idea that governments are simply “withdrawing support” from farmers is misleading:

The U.S. has reduced long-term structural support but compensates with large, irregular interventions.

The EU maintains a high, stable level of subsidy through the CAP, reshaping rather than shrinking support.

The UK has reduced direct income support and shifted risk onto farmers in pursuit of environmental goals.

Scottish crofting remains heavily dependent on public funding for social and geographic reasons, with support serving broader rural policy aims.

The key difference is not whether farmers are supported, but how predictable that support is and what it is designed to achieve. Where support is unstable or rapidly changing, farm viability — especially in marginal regions like the Highlands and Islands — becomes far more uncertain.