A landmark government review has identified controversial changes to inheritance tax as the most critical threat currently facing the British agricultural sector, leaving farmers across the nation feeling 'bewildered and frightened' about their future.
Core Findings of the Farming Profitability Review
The long-awaited Farming Profitability Review, authored by former National Farmers' Union president Baroness Minette Batters, was finally published after delays. Some critics alleged its release was postponed until after the recent budget to avoid intense scrutiny.
The report, commissioned by the government, contains 57 separate recommendations aimed at improving the sector's financial health. Baroness Batters stated that farmers are confronting 'huge economic challenges', from climate change impacts to global instability.
However, the review explicitly stopped short of proposing alternatives to the incoming inheritance tax (IHT) reforms, stating this fell outside its official terms of reference.
The £1 Million Threshold and Industry Backlash
The central point of contention is a reform scheduled to take effect in April next year. Under the new rules, farms with assets valued at more than £1 million will be required to pay a 20% tax, removing a previous exemption that protected agricultural businesses.
This change has already triggered significant unrest. Over the past year, thousands of farmers have protested in London, with many driving tractors through the streets of Westminster. They argue that the tax will render numerous smaller, family-run farms financially unviable, threatening the future of UK food production.
Baroness Batters echoed this deep-seated concern, noting: 'Nearly all the responses to this review have cited inheritance tax as the single biggest issue regarding farming viability that they face.'
Recommendations and Government Response
Beyond the tax issue, the report's core focus is to 'restore balance between food production and the environment'. It highlights the severe threat climate change poses to an industry that manages 70% of the UK's land.
Key recommendations include:
- Growing 'Brand Britain' through boosted exports and supermarket sales.
- Implementing better monitoring of fairness within supply chains.
- Addressing the foundational need for UK food security amidst a growing population and global conflicts.
In reaction to the review, the Department for Environment, Food & Rural Affairs (Defra) announced the creation of a new Farming and Food Partnership Board. This body will unite senior leaders from farming, food production, retail, finance, and government.
Environment Secretary Emma Reynolds responded, stating: '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 welcomed the commitment, emphasising the urgent need for a measurable strategy to strengthen British farming at home and abroad. The government is expected to deliver its comprehensive response in a new 25-year Farming Roadmap, due for publication next year.
