Budget will be ‘nail in the coffin’ for agriculture, warn farmers

Farmers in the West Country are concerned about what Chancellor Rachel Reeves’ Budget will mean for agriculture.
She announced cuts to agricultural property relief, which will make farmland subject to inheritance tax when it is passed from one generation to another.
Under the new rules, farming families will be able to pass up to £1m worth without any tax, but after that 50% of the remaining value will be eligible for taxation.
The Chancellor said that the £1million band would help protect small farms.
However, farmers say the threshold is unlikely to be enough to protect even the smallest of farms, meaning that practically all farmers can now expect to be subject to inheritance tax (IHT) on their deaths.
‘Years of farming will be gone’
ITV News West Country spoke to farmers at Newton Abbot Farmers’ Market in North Devon.
Julian Slee, a fencing contractor, said: “The main concern is the loss of agricultural property relief.
“If that’s done away with, you’re going to see generations and generations of farms that are going to sink because the younger generation now will not be able to foot that 40%.
“Years of farming will be gone. We’re struggling as it is, but it’s just going to be the nail in the coffin for a lot of farmers.”
Budget not ‘as drastic’ as feared
Tom Rattray, fourth-generation farmer, said: “It appears the relief will be a 50% relief after one million pounds of initial value, so hopefully that blow is not as drastic as we first feared.
“In North Devon, people farm to make sure there’s something there for the future.”
‘We could have empty shelves very quickly’
Edwin Daniel said: “When I started farming as a boy, a fatted lamb was worth £6 and that would’ve paid a man for the whole week. But now you need more than a lamb a day to pay a man.
“When I left school, the wool would pay the rent. The wool on 700 ewes that we lambed would have bought a house – that was the value of it.
“You know, they’re driving a lot of farmers’ sons away from farming.
“I’ve been to a few countries in the world and I think every country should produce as much as possible to feed the country. And I reckon England could be producing up to 80%, but I reckon we’re more like 45%. They say it’s 55% but I reckon it’s less, you’re in a very poor, very vulnerable situation.
“And if we had trouble like there is in the rest of the world, we could have empty shelves very quickly. Farming is the backbone of British industry, food is the most important thing.”
‘It makes me feel very nervous’
ITV News West Country also spoke to Ceri Cryer, who owns Hillend Farm near Chippenham.
Ceri, who’s also the director of Brinkworth Dairy, said: “If we value a dairy farm at £8,000 an acre, we might have 125 acres that is not taxed. But that’s a really small-scale farm and that’s not really an economically viable farm.
“You need to be farming a larger amount of land than that in order to make it work.
“So what this policy is really doing is saying, at that point of transition between generations, there is going to be a big tax bill and you either need to borrow money or you need to be selling up parts.
“It is definitely going to be impacting how much farming it’s possible to keep doing in the UK.”
Ceri added: “Personally, for us, it makes me feel very nervous. It makes me more anxious about continuing to invest, because when I farm I’ve always farmed as if we’re going to be farming forever.
“But, with that policy, it makes me more concerned that it gets harder for the farm to keep on going.
“So do the investments I make just need to last until the end of my lifetime? Or is it possible that my children or someone else could be taking on this farm.
“I’ve got three sons aged 16, 14 and eight and, if they want to, I’d like them to continue the farm here at Brinkworth Dairy.
“I was worried when I heard hints dropped about the rise to employers’ national insurance contributions.
“Although I haven’t had the chance to look into it in detail, it does look as if the employers’ allowance to employ four people without having this apply will be helpful to small businesses.
Ceri added that she was relieved to hear fuel duty would not be increasing as rumoured.
‘This is going to do even more damage to mental health’ – NFU
Tom Bradshaw, NFU president, said: “It shows a misunderstanding of the countryside. It shows a government that doesn’t have the empathy for what goes on and the way we produce people’s food.
“Farming families are going to be incredibly concerned about these changes to APR. Those families are the bedrock of our food industry.
“There are also going to be changes to the phase-out of the old legacy budget scheme. That is going to have a huge impact on their short-term cash flow.
“Family farms, small or large, produce the raw ingredients consumers rely on three times a day. The costs of food are going to dramatically increase and that will have to be passed on to the consumer.
“This is going to do even more damage to mental health. At the moment this just seems to be a lack of understanding of the economic growth we provide.
“We would like to have an urgent meeting with the Secretary of State and the Prime Minister. The policies don’t match the words.”