Not so long ago, Agricultural Property Relief (APR) was like mole trapping, hedgelaying or hanging gates — things only yokels knew or cared about. Inevitably, once Rachel Reeves set her gimlet eye on APR in the budget, anyone and everyone became an overnight expert on agricultural land values, average farm sizes and successional planning. The general consensus from the left was that Reeves had expertly closed a “tax loophole” enjoyed by the landed rich. The rest of the populace however speedily saw it as a vindictive attack on farming families — a group identified in a recent survey (admittedly carried out by the NFU), as coming a close second behind nursing as our nation’s most valued profession.  

Defenders of the new 20 per cent inheritance tax rate imposed on farmland and assets valued over £1 million, claimed “average family farms” would not be affected. There are stumbling blocks to this theory. Firstly agriculture is largely only financially viable when operated on an economy of scale. Secondly, farmland’s value is only realised when it is sold. Farmers may be asset rich, but their return on capital invested is miserly, they are cash poor. Finally, the Chancellor’s policy was seemingly created using a DEFRA survey of farm size and land values that dates back to 2021. This survey included all land in England given a “parcel number” by the Rural Payments Agency. Accordingly, every acre of non-commercial land, including hobby farms, pony paddocks, rewilded areas and small holdings was included in the analysis, skewing the results when applied to ‘real’ farms commercially growing food. 

Daniel Zeichner, the Farming Minister, loyally echoed the Reeves budget mantra; declaring in the House of Commons that 75 per cent of family farms would be unaffected by the Chancellor’s decision. His view is not shared by the NFU, who called the tax “a hammer blow to the entire industry” and by one of my farming clients as “Bl**dy Mugabeism”. Zeichner, prior to the election, had been seen by many farmers as a man they could work with. In earlier meetings he had impressed, showing a grasp of agriculture’s complexities, having spent five years in the shadow role. It is perhaps indicative of the obvious disregard the Prime Minister and his Chancellor have towards British agriculture that they appear to have ignored any feedback on the true state of farming from one of the few competent ministers currently in government.  

The Chancellor’s wholesale misunderstanding of what constitutes an “average farm” is exemplified in my home county of Suffolk. Here, in a survey of NFU members, it was revealed the average farm size is some 400 acres, over double that the government believes to be the national average. Suffolk is overwhelmingly arable, a branch of farming where economies of scale are essential. The localised dedication to growing grains, sugar beet, oil seeds and legumes is a pragmatic and largely soil influenced decision. It’s a decision that’s ultimately good for our bellies. As Henry Dimbleby highlights in his book Ravenous, one third of the calories consumed by the British public is produced in the fertile counties of Suffolk, Norfolk, Cambridgeshire, Lincolnshire and East Yorkshire. This fertility is reflected in land prices. On average, one Suffolk acre is valued at £9,600, rising to nearly £11,000 for grade one land. The average farm therefore has a land value alone of £3.84 million. Obviously farmers need to live on the job. Farmhouses are invariably just the sort of bucolic homesteads that elicit envy from the left. In reality these buildings are invariably old, leaky and expensive to run. However, such properties still add between £800,000 to £1million to the farm’s value. Add a few barns and a grain store, any woodland that is on short term rotation coppice, even milk quotas that are applied to the farm should this be a mixed enterprise and Suffolk farms are on average valued at around £6 million. Following the Reeves budget, every Suffolk family farm has an inheritance tax liability of roughly £1,018,000. For the record the average income for a farmer here is approximately £29,000 lower than that enjoyed by train drivers, who have recently revelled in the government’s generous pay deal with ASLEF. 

Farmers are a breed well used to natural phenomena destroying their lives

At a meeting of the Suffolk NFU on Monday, I discovered that the members, once they had recovered from the initial shock of the budget, were remarkably phlegmatic. This is an unsurprising mien. Farmers are a breed well used to natural phenomena destroying their lives. Droughts, flooding or disastrous government decisions are all treated with a ready stoicism. Succession planning, they accepted, would become the new normal, inevitably paying top dollar for the services of financial advisors, lawyers and accountants. All were aware however, that even with succession planning, and holdings split into sub £1million parcels between multiple family members, a sword of Damocles continued to hang over farms. One farming colleague in his late forties told me, “If any of our family dies ‘out of sync’ then we are stuffed.” In effect, if a son or daughter dies unexpectedly before a parent or grandparent, a seismic taxation event will occur, the result of which would be the inevitable break up of the business.  Farming, it should be remembered, has a fatality rate 21 times higher than any other industry. 

It is clear to all bar the Labour faithful, that removing APR from family farms is a cruel and unworkable policy.  Yet this is merely one of many nails Reeves has used to build a coffin for farming. Her budget also hammered the work horse for most of us in farming — the double cab pick up truck. Now no longer classified as commercial vehicles, these ersatz trucks are viewed in the same light as Chelsea tractors, increasing their tax burden on farm businesses by up to 211 per cent, according to analysis by the Countryside Alliance. That is not all. Reeves also announced that the DEFRA budget has been frozen, meaning inflation will swiftly reduce the financial efficacy of environmental grants given to farmers to improve soil health, water quality and biodiversity on their land. Other budget tax increases will directly impact farmers. Any who have failed to successfully mitigate against APR and are forced to sell land to pay for death duties will face an additional 24 per cent in capital gains. Farmers who have diversified their businesses will suffer. The 1,581 farm shops in the UK generate £1.4 billion in sales. These shops go some way to break the monopoly of the supermarkets, enabling growers to retail directly to the consumer. It is thought some 25,000 people are currently employed in these farmer owned independent businesses. The budget means employers will now have to bear the burden of a National Insurance hike of 15 per cent and a rise in the national minimum wage rising to £12.21/hour.  As one Mid Suffolk farmer, who has diversified his business building a farm shop and restaurant told me, “This was the only thing on the farm that made any money, it won’t any more”. 

The final Reeves’ budget blow for British farmers has largely slipped under the radar, yet is the most immediately painful. The Basic Payment Scheme (BPS) was a hangover from the EU’s Common Agricultural Policy. Payments were based on farm size, encouraging landowners to keep their farms in a fit state to grow food. It benefited both farmer and consumer by subsidising the farmer’s costs of food production which was reflected in lower prices at the checkout, provided the supermarkets played ball. The larger the farm, the greater the subsidy reflecting the scale of production costs.  Following our exit from Europe it was mutually agreed between the then Conservative government and British farmers that BPS payments were to end, being scaled back on a sustainable annual incremental basis, beginning in 2021 and ending in 2027. The Chancellor however decided in her budget to abandon incremental reductions, seemingly solely due to an ideological dislike of larger farms.   

The Reeves budget is more than an attack on farming, it is a full scale assault on entire rural communities

My nearest neighbours are award winning farmers, not merely due to their remarkable skill at growing food but also for their conservation efforts for farmland wildlife. In 2019 they received £119,000 in BPS payments. In 2021 this fell to £101,000, in 2022 £83,000, 2023 £66,000 and in 2024 £48,000. Before Rachel Reeves got the keys to Number 11 they had budgeted for a 2025 payment of £36k,  planning to use this, as they had previous payments to diversify, converting dilapidated farm buildings into business units and forward buying seed, fertiliser and fuel they would need for the forthcoming growing season. Now they will receive £7,200. As the senior member of the family told me, “If we have a bad harvest next year it could be the end of us.” Three generations of this family have farmed effectively, sustainably and with nature here in Mid Suffolk since the early 1950s. It is sobering to think that the Reeves budget has hamstrung family farms like my neighbours’ to such a degree that mere torrential rain next July could end it all. The raid on BPS, cutting off cash flow to farmers is a killer for the wider agricultural ancillary sector. The Reeves budget is more than an attack on farming, it is a full scale assault on entire rural communities. 

The NFU plans to hold a march in London on the 19th November. Personally, I hate such protests. I tend to see them as pointless and counter productive. This time, I believe I may have to put my prejudices aside and attend. Labour is killing British farming. I couldn’t forgive myself if I didn’t try to help prevent that.

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Richard Negus’ Words From The Hedge: A hedgelayer’s view of the English countryside, will be published by Unbound publishing in May 2025