Decarbonising British food would add less than 1 per cent to food bills but poses an existential risk to worse-off farmers if not properly managed

4th February 2026

Decarbonising British agriculture would increase food prices by less than 1 per cent - the equivalent of around 50p on a weekly shop. But the Government will need to manage the process carefully to preserve a farming sector already in crisis, according to new Resolution Foundation research published on Tuesday 3 February 2026.

Green your eats - funded by the European Climate Foundation - shows that agriculture is the only major sector where emissions have barely fallen in the past 15 years. Failing to make progress on decarbonising British agriculture this decade would add £12 billion to the cost of achieving our net zero commitments, highlighting the urgency with which the sector needs to accelerate its efforts.

Thankfully decarbonising food production should be affordable and is estimated to cost less than £1 billion a year, in today's prices, through to 2050. If passed through proportionally to households this cost would add less than 1 per cent to the total level of food prices by 2050.

But the report finds a striking mismatch between these low costs of decarbonisation and the existential risk they create for the worst-off farmers if they can't pass these costs on.

This reflects the low levels of productivity for many farms. In fact, almost a third (30 per cent) of farms made a loss in 2023-24, and the output of a typical family farm that year was equivalent to wages of just £6 per hour - roughly half the minimum wage.

So, while the overall cost of decarbonisation is low, requiring farmers to cover these costs would drive average farm income down by a fifth (from £43,000 to £35,000 in 2023-24 prices).

With a trade-off pitting negligible price increases for shoppers against a significant threat to farmers, the Foundation argues that passing costs on to consumers should be the clear policy aim, and urges the Government to resist the temptation to increase farmers' already generous subsidies.

The report recommends supply-chain regulation instead, requiring supermarkets and large distributors to drive progress towards greener farming. Mirroring successful regulatory approaches in the automotive and energy sectors, this would put the regulatory burden on the biggest and best organised actors.

Converting farmland to forestry or restored peatland presents a fundamentally different challenge, affecting fewer farmers but to a much greater extent. For these transformational changes, subsidies for public goods are essential, but stricter guidelines are needed to ensure land is allocated efficiently and benefits are distributed fairly.

The research warns that tenant farmers – among the UK's most productive – have the most to lose from land use changes. Without safeguards, the transition could push out skilled farmers in favour of passive landlord income from environmental schemes. The Foundation recommends longer tenancy agreements to improve stability and investment incentives for tenant farmers, and requirements that landlords share new environmental revenue streams with tenants.

Farming has fallen behind other sectors in meeting net zero targets and acceleration on this is needed. Through well-managed regulation in the food supply-chain, alongside subsidies for land use changes, the Government can green British agriculture without a big hit to household budgets or the country’s farmers.

Zachary Leather, Economist at the Resolution Foundation, said, "We can green British agriculture without emptying people’s wallets or destroying farmers’ livelihoods, but it requires the Government to act decisively."

"The transition to net zero in agriculture is set to add just 1 per cent to the weekly shop by 2050. But while the impact for consumers is small, pushing the cost onto farmers instead would pose big risks to their livelihoods.

"Policy must ensure the costs of greening agriculture are borne by other parts of the supply chain, or through small increases in food prices, rather than by farmers who are already struggling."

Read the full report HERE
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