Budget changes are the final straw for UK farmers after years of pressure | agriculture

Tractors packed with angry farmers could be rolling down the stately streets of Westminster in the coming weeks. They say they've had enough. Changes to inheritance tax in last week's government budget were a major blow, but they were also the latest in a long series of blows. This is obviously as much as they can take.

Rachel Reeves sparked outrage by making a surprise announcement in her budget that she would impose an inheritance tax on farmland valued at more than $1 million. Since 1992, Agricultural Property Relief (APR) has meant that family farms have been inherited tax-free, a policy aimed at strengthening food security and keeping people on family land.

This is the latest policy that has impacted agriculture over the past few years. There has been anger over decades of painful deals with supermarkets and farmers say they have been forced to cut their profits to the bone. Then came Brexit. It broke promises on trade deals with Australia and New Zealand, allowing for cheaper meat production, lowering standards in the UK and sparking anger among farmers who felt shortchanged. It also meant a shift from the EU's Common Agricultural Policy subsidies to a system that pays farmers for environmental goods, the deliveries of which have failed and been delayed. Farmers are also facing new export challenges and struggling to secure much-needed seasonal workers.

Rachel Reeves sparked outrage by making a surprise announcement in her budget that she would impose an inheritance tax on farmland worth more than $1 million.

Farmers have also felt abandoned as extreme weather conditions caused by climate breakdown wipe out entire crops, and inflation drives up the costs of inputs such as fuel and fertilizer rockets.

Tom Bradshaw, National Farmers' Union (NFU) chief executive, said: After years of being squeezed by the lowest margins imaginable, farmers are grappling with high production costs for fuel, feed and fertiliser. With significant policy changes following Brexit and increasingly extreme weather conditions, there is nothing our country's food producers can give.

The NFU is calling on the government not only to reverse the inheritance tax changes, but also to implement a range of other policies. They want a legal commitment to ensure that Britain's self-sufficiency does not fall below current levels and that food imports are produced to the same standards that British farmers must meet. They also want a review of supply chain fairness as farmers' margins have come under pressure as supermarkets have posted record profits. A recent study found that farmers take home less than a penny for each block of cheese or loaf of bread sold in supermarkets.

The union plans to take 1,800 members to Westminster on November 19 to meet lawmakers, and other farming groups are expected to stage more militant protests on the same day, although this has not been approved by the NFU. Some farmers have even threatened to go on strike to disrupt food supplies.

Farmers in Preston protested against cheap food imports, rising costs and lack of supermarket support in March. Photo: Nathan Stirk/Getty

Reeves' budget has been hit especially hard because many farmers are unfairly blamed for problems caused by tax loopholes exploited by the mega-rich. Because of that loophole, investors used the excuse of taxes to buy farmland, causing the price of land they had owned for generations to soar. As a result, when farmers pass their land to their children, their tax bill can eat up most of their farm income.

Will White, Farm Sustainability Coordinator at Sustain, said: Land values ​​soared, in part because wealthy individuals took advantage of the system. But it should not be farmers, especially those committed to nature-friendly agriculture, who pay the price. Land should not be a tax haven for the rich. But the policy must find a way to distinguish between farmers working to provide public goods and nutritious food and wealthy individuals seeking tax breaks.

Farmers also believe the government is being disingenuous about its policies. The Treasury claims the changes will only affect 28% of farms, but data from the Department for Environment, Food and Rural Affairs shows two-thirds could be taxed.

Martin Lines, CEO of the Nature Friendly Farming Network, said: The speed with which the government is implementing these changes and the short timeframe they have set are neither particularly helpful nor fair. Farmers were given little time to plan their succession and effectively transition from the old tax system to the new one.

Some in the industry think it's fair to ask the wealthiest people to pay their share. With many farmers making a poor living and living in areas where GP surgeries and public transport are being cut, a fairer system could help.

Guy Singh-Watson, founder of organic vegetable box company Riverford, is a family farmer and grows vegetables on 60 hectares (150 acres) in Devon. At first, I was angry about the taxes, but upon closer inspection, they seemed fair and the people complaining were the mega-rich.

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Guy Sing-Watson, founder of Riverford Farm in south Devon, said the biggest opposition to the policy came from the mega-rich. Photo: Jim Wileman/The Guardian

Let's be honest about where the biggest opposition to this policy comes from and what their role is in the value of our lands, he said. The unintended consequence of the tax breaks provided to landowners is to inflate land prices and effectively exclude new entrants who are not the actual beneficiaries of their parents.

Singh-Watson said: Land in Vende, France, where I have owned a 300-acre farm for the past 15 years, costs less than a tenth of the price of equivalent land in Devon, where I farm. To become a farmer there [in France] It must be deemed suitable for farming by the local government. It is questionable whether those who buy up countries simply to have more money and assets for themselves will ever pass that test. As a farmer for 50 years, I have actively campaigned to protect Britain's family farms. But to claim that these people represent us when in reality the real farmers are the ones making farming less affordable should offend every farmer who has mud in their boots.

He said there is another way to raise money that would be less upsetting to farmers, more equitable and would raise billions of dollars more than the $500 million expected from the APR change.

Singh-Watson said: If Reeves wanted to partially extract from landowners some of the $40 billion in tax increases needed to rebuild our country, another way to do it would be to have land values ​​increase by 10 to 100 times. It might have been something to look into. Planning permission has been obtained. Farmers who benefit from these improvements may not pay any taxes if the funds are rolled over, i.e. reinvested in the land. Taxing these capital gains would arguably raise more revenue and be much less controversial.

Another option, White said, is that large agricultural companies and supermarkets that create inequities in their supply chains could be targeted instead. Although some farmers are having to pay more, supermarkets and large agricultural corporations continue to squeeze every last drop out of the food supply chain, polluting rivers and leaving farmers with ever tighter margins, White said.

This is a very unfair and exploitative system. A fairer and more profitable approach for governments would be to start by taxing and better regulating the larger players in the supply chain where the real profits are made.

A government spokesperson said: The government's commitment to our farmers remains firm. That's why we've committed $5 billion over two years to the agricultural budget, more money than ever before for sustainable food production. We understand the concerns about the APR changes, but most people claiming relief will not be affected by these changes. They will be able to pass the family farm on to their children, just as previous generations always did. This is a fair and balanced approach that protects family farms while improving the public services we all rely on.

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