Today's Budget is a blow to British farmers and could lead to
food price rises, the NFU has warned.
The Budget will add to the cost of producing food at a time when
hard-pressed British farmers cannot absorb it, meaning either the
supply chain or consumers will end up bearing the brunt.
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.
And 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.
Reacting 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.
“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.”
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.
The 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.
-ends-
Notes to editor:
- The government announced it will reform Agricultural
Property Relief and Business Property Relief from April 2026. In
addition to the existing nil-rate bands, the 100% rate of relief
will continue for the first £1 million of combined agricultural
and business assets and will be 50% thereafter.
- The government has announced that they are accelerating the
end of the direct payment phaseout. The fastest reductions in
subsidies will be for those who received more than £100,000 in
direct payments in 2020 as these businesses will receive no more
than £8,000 in 2025.
- The government has confirmed the National Living Wage
increase of 6.7%, making it £12.21. The National Minimum Wage for
18 to 20 year olds will increase by 16.3% to £10.00 per hour.
- The current agricultural budget for England is £2.4 billion.
