As part of further austerity measures announced by Chancellor George Osborne today, Defra funding will be cut by £20 million. The department will lose a further £35 million in 2014/15.

Osborne unveiled deeper cuts to Whitehall departments, amounting to £1 billion to pay for £5bn in spending elsewhere, ahead of his Wednesday Autumn Statement. The £1 billion taken from government resource budgets, including local government as well as rural affairs and environment department Defra, will go to fund road building, education and research projects; yet more cuts are promised next year.

Defra said the cuts amounted to 2 percent of its budget, but The Guardian claimed that with the inclusion of other planned cuts, Defra stands to lose over 11 percent of its entire budget from 2012/13 to 2014/15. Other departments with an environmental remit will also suffer; the Department of Energy and Climate Change, Department for Transport and Department of Business, Innovation and Skills are all set to lose between 5 and 10 per cent of funding.

Spokespeople for the departments were keen to point to areas where their department has benefitted from grants, including Defra's increased budget for flood protection measures.

The Chancellor also took aim at pensions and benefits in his mini-budget. However, SMEs stand to benefit from a tenfold increase in the Annual Investment Allowance. NFU chief economist Phil Bicknell said the union is "delighted" at the government's decision to increase annual investment allowance. He also said cuts to corporation tax will "pay dividends... ultimately supporting investment across farming sectors"

Mr Bicknell added, "We firmly believe that one of the key drivers to help push the economy forward is investment in new technology, which in turn will increase productivity and efficiency. As ever, the devil is in the detail. We will study all relevant announcements in greater depth as they become available, and assess the full impact of the Chancellor’s plans on agriculture."

Healthcare, schools and military spending were protected from further cuts. The UK is the world's sixth largest economy, though the country ranks fourth in terms of military spending, outstripped only by the United States, Russia and China.

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