Budget blow for British farming, says NFU
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The impact on British family farms which, already stretched to breaking point after a decade of tightening margins, cost inflation and extreme weather events, could be the final straw for many.
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Hide AdAnd changes to Agricultural Property Relief (APR) and Business Property Relief (BPR)1, despite repeated assurances from ministers that this wouldn’t happen, put the futures of many family farms and the people who farm them at risk.
Farmers are also reeling from the announcement of a speeding up of the phasing out of old support schemes2, which amounts to a significant cut to farm incomes, at a time when their replacement schemes still leave many farm businesses locked out.
Together with wage rises3 and added costs to businesses that apply across the economy, these policies raise serious questions about the future of British food security and the impact on food supply and prices.
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Hide AdReacting to the announcements, NFU President Tom Bradshaw said: “This Budget not only threatens family farms but will also make producing food more expensive. This means more cost for farmers who simply cannot absorb it, and it will have to be borne by someone. Farmers are down to the bone and gristle, who is going to carry these costs?
“It’s been a bad Budget for farm confidence, which is already at an all-time low. After today farmers, including tenants, have more uncertainty and more worry, not less.
“When you look farmers in the eye and make them a promise, keep it. The shameless breaking of those promises on Agricultural Property Relief will snatch away much of the next generation’s ability to carry on producing British food, plan for the future and shepherd the environment.
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Hide Ad“It’s clear the government does not understand that family farms are not only small farms, and that just because a farm is a valuable asset it doesn’t mean those who work it are wealthy. Let’s not sugar-coat this, every penny the Chancellor saves from this will come directly from the next generation having to break-up their family farm.
“This is one of a number of measures in the Budget which make it harder for farmers to stay in business and significantly increase the cost of producing food.”
William Maughan NFU North regional board chair who represents NFU members in Yorkshire, North Riding & Durham, Northumberland and East Yorkshire said: “The Budget is a huge blow and the consequences of changes made to Agricultural Property Relief and Inheritance Tax go far beyond the farm gate.
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Hide Ad“We were hopeful of a new working relationship with this government to support us in producing climate friendly food here in the region.
“All this is now at stake, as many farms will be unable to have any chance of handing over to their families to continue to produce food in the region.
“This is a tax on hard working family farms and puts the future of many farm businesses under threat.
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Hide Ad“Most family farms are asset rich and cash poor. The low returns from farming make the ability for many family farms to service this tax burden almost impossible.
“Confidence among farmers is already low. This will further undermine that and will have a knock-on effect on investment and ultimately food production.”
There is some good news within the Budget, as those hit by devastating rainfall earlier this year will ‘immediately’ have access to the £60 million Farm Recovery Fund, an increase of £10 million.
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Hide AdThe agricultural budget for England has also been maintained4, with Defra confirming this year’s budget to be £2.6 billion to reflect the underspend from the previous government.
Both of these are areas the NFU lobbied ministers hard to agree.