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News

Autumn Budget 2024: What did nature-friendly farmers think? Our panel reacts

United Kingdom
policy

Chancellor Rachel Reeves’ Budget - the first Labour budget in 14 years - was a decidedly mixed bag from a farming perspective. We asked NFFN farmers to share their first reactions.


From an agricultural perspective, the 2024 Autumn Budget presented a mix of ups and downs.

In terms of government financial support, farming emerged from Rachel Reeves’ first Budget as Chancellor in a slightly better position than many had feared. The anticipated cuts to the Defra and farming budgets, which had clouded the run-up to her speech, did not materialise.

However, for many farmers the positive spending news was overshadowed by changes to agricultural property relief. This change will reduce the relief rate for agricultural and business assets falling from 100% to 50% for those valued over £1 million in total.

The NFFN asked farmers for their thoughts.

Jon Thornes, South Ormsby Estate

The government’s decision to cap Agricultural Property Relief (APR) could reshape the farming sector and have serious repercussions for both rural communities and efforts to protect biodiversity.

This could create a heavy financial burden for family farms, forcing many to either sell portions of their land or assets or take on debt. Those with high-value land may especially struggle, as the cost of passing land to the next generation will be much higher. This could lead to increased land consolidation, with large agricultural corporations buying up land, diminishing the community-centred culture that small family farms support.

One repercussion of this could be farmers thinking on a shorter timescale, which I don’t believe is good for nature. A farm needs to think about a multi-generation plan and a wide horizon, with one generation planting trees which only the next one will see mature, to give one example.  Family farms often integrate nature-friendly practices, such as maintaining hedgerows, wildflower strips, and field margins, and adopt long-term regenerative practices prioritising soil health, like rotational grazing and reducing chemical inputs. There is also a concern that increased pressure from inheritance tax relief might reduce participation in conservation programmes, or that consolidation of land into fewer, bigger farms will increase monocultures which are less supportive of nature.

I think the Government should adjust the thresholds based on regional land values rather than having a flat £1 million cap, so farmers in areas with high land prices aren’t disproportionately affected. They should also adjust it in line with inflation and land values, and there needs to be more protection for smaller family farms.

They could ensure that APR is primarily available to those actively engaged in farming, setting criteria such as minimum working hours, active management responsibilities or income thresholds from farming activities. They could also implement a ‘Farmer Test’ which would ensure passive landowners aren’t benefiting from the tax relief.

The Government could also bring in exemptions and reliefs for those employing nature-friendly farming practices, and align its tax policies with its Environmental Land Management schemes (ELMs). Farmers would then be rewarded for adopting environmental stewardship agreements and pursuing environmental outcomes.

James Robinson, Strickley Farm (NFFN England Steering Group Chair)

I honestly feel sick. This Budget has completely knocked the stuffing out of us. There was a lot of speculation that APR would be reduced, but I don’t think anyone actually believed it would happen. 

I am concerned that Rachel Reeves thinks she has ensured that small family farms are protected with a £1 million threshold. In reality, that £1 million will buy you very little anywhere in the country. Strickley is probably a smaller than average-farm, and yet we will be three times the threshold. That value is there on paper, it’s not something that is to be cashed in. 

Let us hope that things are not as bad as we fear, and that with careful planning we can ensure that the next generation of family farmers can add their love and passion to the hard work and care that has been given to the land before them.

James Robinson

Farms are bequeathed from one generation to another in a way that’s hard for many to understand, they are almost held in trust for the next generation. The name may change on a piece of paper, but farms are never really owned. They are cared for, loved and lived, they are valued for what they are, and what we can do for them.

Let us hope that things are not as bad as we fear, and that with careful planning we can ensure that the next generation of family farmers can add their love and passion to the hard work and care that has been given to the land before them. Otherwise, this move has the potential to break up generations of hope and destroy communities forever.

Abby Allen, Pipers Farm

I greatly welcome the Government’s renewed commitment to ELM schemes at an overall increase of 2.7%. It has never been more important to enable farmers to transition to nature-friendly farming systems, while continuing to build resilience and improve food security. 

I would like to see the Government ensure these funds are accessible to all farmers, including small-scale, tenanted and upland farmers who are often forgotten about and find it more difficult to receive vital support. There is more work to be done to streamline access to ELMs and improve the roll-out, which must happen at pace alongside the cuts to the remaining delinked payments.

Other good news from the Budget was that the £60m Farming Recovery Fund will finally be paid directly to those affected by severe flooding. With extreme weather becoming more commonplace, ensuring farmers can effectively access funding in times of emergency is vital for their security. However, there must be a longer-term vision for safeguarding British farmers, instead of relying on short-term emergency funding.

This Government has an opportunity to support farmers to ensure nature's recovery, while continuing to put food on our tables.

Abby Allen

I welcome the Government’s confirmation that changes to the rate of agricultural property relief will ensure that over a third of British farms are protected from increases. However, the planned changes could jeopardise the future of family farms.

Farmers and rural businesses need to be able to make long-term investments, particularly in the context of nature-friendly farming initiatives. The new tax scheme could place a heavy burden on the next generation, making it even harder for younger people to enter agriculture. Alongside this, there may be impacts to investment in nature-friendly farming with the added burden of planning for inheritance tax. This could lead to parcels of land being sold and taken out of productive use or environmental schemes.

This Government has an opportunity to support farmers to ensure nature’s recovery, while continuing to put food on our tables. I will be watching over the coming months to see how this happens. As with any Government promise, actions speak louder than words.

Holly Purdey, Horner Farm (NFFN England Steering Group Vice Chair)

If the Government wants to protect the small family farms, a threshold of £1 million for agricultural property relief is too low, given that land values have outstripped agricultural wages. This would make it untenable for future generations to afford the tax on the land, forcing its sale.

Long-term, generational decision-making enables the adoption of nature-friendly farming practices grounded in sound environmental principles.

Going forward, it is key that any land that comes onto the market as a result of these changes is safeguarded for agricultural use, ensuring fair access to land for farming communities.

Debbie Wilkins, Norton Court Farm

With so many worries and stresses on our farm, the inheritance tax announcement is another that  we could do without.

On the ELMs announcements, it is welcome that the Higher Tier is going to continue but waiting until next year is too long. BPS reductions are already happening and I feel in limbo not knowing if I will get a higher-level agreement when it comes out. The Government has said it will open in early 2025, but that probably means it will be a year before I see any money.

Personally, I am waiting for the floodplain meadow option. This was announced in January but with no details. It is a long time without grant money and also doesn't allow for planning a farming business. It is hard to be a nature-friendly farmer if you go out of business waiting for the support to come. 

It’s a similar story with the Farming Recovery Fund, which the Government said would pay out immediately for farmers affected by last winter’s flooding. What does ‘immediately’ mean? I think it means straight away and that I should already have the money, but I have certainly not seen it yet!

Neil Heseltine, Hill Top Farm

It is brilliant and unexpected news that the Defra budget has increased overall and that there is a continued commitment to sustainable and nature-friendly farming. There is a lot to celebrate in this Budget for the NFFN and congratulations should go to everyone who has kept up the messaging to the new Government.

The agricultural property relief is a difficult topic because differences in situations will mean people have different perspectives. Perhaps this is a reflection of where we are at. It could mean the super-rich will be less inclined to buy land simply for inheritance tax reasons, which could bring land prices down to levels that more accurately reflect the realities of farming. At the moment millionaires can basically buy up as much agricultural land as they want, knowing it will all be inheritance tax free.

If land prices were to fall, because investors were being taken out of the market and demand fell, that would mean more farms would start to come in under the inheritance tax thresholds. In a few years’ time, the new ruling could even be seen as a win for farming overall.

Dave Oates, Rosuick Farm

Putting the inheritance tax threshold so low shows how out of touch this Government is with the realities of family farming. The income from farming is completely out of proportion with the value of the land and houses.

In areas such as where we farm in Cornwall a farmhouse, one cottage with a couple of sheds and 150 acres - which would be considered small by many farmers - would have a value of around £3.5 million. That would mean the farmer taking on a lifetime of debt. This will stifle our industry's ability to innovate and progress as it adds risk, as well as the stress and associated mental pressures farmers already face. 

As farmers we are fortunate to have what we have, and pleading poverty is foolish. This, however, is not just a financial burden, it risks the break-up of family farming cultures and communities who make a living managing the land they care about.

My concern is that the result will be big businesses buying up land, selling off farmhouses and promoting factory or intensive farming as it makes more financial sense. Or land will be sought by people with fairly deep pockets who are looking to rewild it, perhaps with a couple of shepherds' huts on it. A lot of what generational farmers do to care for the countryside doesn't make financial sense, but is the right thing to do for our soil, landscape and planet. I just can't see a win for nature-friendly farming anywhere here.