The farming sector “is bewildered and frightened of what might lie ahead”, with farmers saying changes to inheritance tax are the biggest issue regarding viability they face, a review for the government has found.
Farmers have repeatedly protested against the proposed since they were announced last year, which will see them pay tax on inherited agricultural assets worth more than £1m at a rate of 20 per cent.
The farm profitability report by former National Farmers’ Union president Baroness Minette Batters has called for a “new deal for profitable farming” that recognises the true cost of producing food and delivering for the environment.
The terms of the review by Baroness Batters did not include the controversial changes to inheritance tax, which are set to apply to farm businesses worth more than £1 million.
But she said it was raised as the single biggest issue regarding farm viability by almost all respondents to her review.
She warned that the sector had faced a sharp rise in costs and increasingly extreme weather, with severe drought this year.
Uncertainty surrounding the closure of applications to the sustainable farming incentive scheme – the main post-Brexit agricultural payments – and proposed changes to inheritance tax had created “significant” ongoing concern, with some farmers questioning viability let alone profitability.
The government has indicated that it will not formally respond to the report immediately but insisted that it is already putting action in place to help farmers.
Environment secretary Emma Reynolds said: “When farming thrives, the whole country benefits. British farmers are central to our food security, our rural economy and the stewardship of our countryside.
“Baroness Batters’ review underlines the need for government, farming and the food industry to work much more closely together. That is exactly what the new Farming and Food Partnership Board will do.
“This is about serious action to remove barriers, unlock investment and make the food system work better, so farm businesses can grow, invest and plan for the future with confidence.”
This is a breaking story – more follows…