Be in no doubt, the future of family farming is under very real threat. The proposed changes to inheritance tax (IHT) announced in the budget show a complete failure to understand what motivates family farmers and how farm finances work.

Few people would argue with the need to tackle the loophole that allows the wealthy to buy up farmland simply as a way of passing on their wealth without paying IHT. It has been a major cause of land prices continuing to rise despite the punishingly low margins being imposed on farm produce by the supermarkets. The combined impact sees farms achieving a return on capital of less than 0.5%, so just £5,000 on an investment of £1m. Every farmer would be better off if they sold up and simply put the proceeds in a deposit account. In France, where successive governments have shown a much greater appreciation of the important role of agriculture, land prices are about one tenth of UK levels, food prices are higher, and as a result France has a negligible reliance on food imports. The UK imports over 40% of its food.

Family farmers regard themselves as stewards rather than owners of the land. They work hard. My parents-in-law had a (very) small dairy farm in Kent and even in his later years my father-in-law would be out before 6.00 am milking, every day, no matter what the weather, no holidays, no days off. Their farm would have been below the new threshold, but there would certainly have been no way of paying an IHT bill without selling up.

While the Government says that farms worth less than £1m will be exempt from the new tax, this only counts the value of the land and buildings. With combine harvesters costing up to £500,000, the value of machinery, livestock, crops and any other farming assets will take many more farms above this modest threshold.

placeholder image — Family farming under threat

There was no discussion with the farming industry and no warning of this destructive policy. Many farmers are still trying to come to terms with the damaging impact of Brexit and trade deals that even the Conservative ministers responsible acknowledged were harmful. The extremes of weather, the disruption of markets following Russia’s invasion of Ukraine, and mushrooming costs of power and fertilisers have all driven many farmers to the brink, and poor mental health is a major issue for young farmers. The combination of accidents and suicides gives farming the poorest safety record of any occupation in the UK.

The harm caused by this inept policy is completely disproportionate to the £200m a year that it will apparently raise. There must surely be better and less damaging ways of separating the IHT dodgers from the genuine hard working farmers?

Cllr Kathryn Field