What's going on with farming?
Farming has been in the news rather a lot recently from the first protests in Germany in December 2023 to widespread British protests against inheritance tax changes since October 2024. Critics have cited far right political influences, climate change denial, and wealthy individuals seeking to avoid paying tax as drivers for this dissatisfaction but while all three have sought to take advantage of farmers’ protests, this doesn’t adequately explain why farmers of all backgrounds are leaving the fields and taking to the streets. So, what is going on with farming?
Policy is very important to us, as farmers, both directly through regulation and direct support but also the way that it impacts upon the market for our main source of income; food. Since joining the European Economic Community in 1973 [which formed a part of the EU when it came into being 20 years later] British food & farming were governed under the Common Agricultural Policy (CAP). Established with the twin aims of supporting farming and ensuring a plentiful & high quality food supply. Aligning regulations across member states lead to some perverse outcomes, such as the rapid loss of small abattoirs across the country which closed down from the 1990’s onward. We started farming amid the BSE crisis of the mid-1990’s, which also accelerated the loss of abattoirs that could no longer afford to adapt to new, more stringent food safety regulations.
At first the CAP sought to increase food production across Europe, by way of price support & grants for farmers to adopt new techniques to raise productivity. After two decades of this our countryside bore the scars, with hedges removed and ponds filled in to maximise the area of land available for farming, and food excesses ensued. To repair the damage the CAP was reformed with the intention of curbing food waste by paying farmers to temporarily set aside some land from food production yet maintain it in a state that could still be used to produce food, if required. It also introduced the first ‘agri-environment’ [Countryside Stewardship] schemes, which paid farmers to repair some of the damage done by intensification and even to start replanting some of the removed hedgerows.
A new hedgerow at Rosewood Farm, planted along the old hedge line
It was into this environmental policy that we arrived - young farmers keen to produce food with nature, we were then supported by the EU to produce food along with financial help to reverse some of the damage done to the farm back in the 1970’s. However, two years after buying the land, reform to the policy meant that we had to forget about the support to grow food and instead adjust to building up the farm on food production alone. In Britain food subsidies were replaced by a single, flat-rate payment available for every hectare of farmland on the condition that certain minimum environmental & welfare standards were maintained. Phased in gradually over eight years the idea was to transition farmers away from relying upon subsidies, but because we hadn’t been farming for long enough under the old system we missed out on this and instead had to go cold turkey.
Having bought a small farm, the only ways we could earn more from the land was either to produce more food or purchase more land. The latter was out of the question - not only did we have to invest any money that we made back into the farm to raise production, we also had hedges to plant and fences to erect that would enable us to manage the land for wildlife under the Countryside Stewardship Scheme. Land prices were also rising rapidly as landowners were no longer required to farm the land in order to receive the EU payments.
Like many small businesses, a common route to building a business is to take on a franchise. In farming this usually involves erecting a building and producing pigs, poultry or eggs for one of the large, vertically integrated food companies on contract. This is particularly popular as it is a quick way to make a case for planning permission to build a home in the countryside, but it does involve a lot of capital to be invested in buildings which then ties you to supplying the companies until you can pay off the mortgage. We were advised by a friend to do the same as he had done and seek a contract with a company to produce free range eggs. However, the layout and heavy land of our farm didn’t really suit large scale free range chickens and indoor pigs or chickens held very little appeal for us, not least because we would be living so close to it.
While buying more land was impossible, CAP reform had also created an opportunity in that, with cattle no longer subsidised, for many land owners it was no longer worth keeping small numbers of cattle to graze HNV (high nature value) grasslands & heathlands. However as they could still claim the single farm payment while letting the land out to graziers we found ourselves being offered more land in need of grazing and proceeded to build up the herd that way. Then, in 2008 came the global financial crisis and when the property market suffered investors instead sought a ‘safe place’ to invest their money and that place was UK farmland - after all, they’re not making any more of it!
Taking on any more HNV land left us with a problem - while we already had [too] many hectares for the cows to graze during summer, our own land became the only place we could keep them over winter. It was a catch-22; to graze others’ land for wildlife we needed more cows, but to keep them over winter we also needed more land of our own - we couldn’t just make them disappear. Over wintering cattle wasn’t compatible with the agri-environment scheme, which was only bringing in an extra £1000 each year, not enough to pay for the extra housing, bedding and hay needed.
We had explored the options for renewable energy; renting a corner of the farm to site a wind turbine would have brought in an income and produced power for the farm but there was a snag - although we had power to the farm, it was only single phase and the turbine needed a three-phase supply. The leasing company could not justify the cost of upgrading several miles of powerlines for a single turbine. When a letter arrived announcing that Northern Powergrid were seeking access to the farm to renew the powerlines & upgrade them to three phase it seemed like our luck was in, but then UK coalition government policy changed that with Prime Minister David Cameron stating that people were ‘fed up’ with onshore windfarms and removed any government support for them. The turbine company could no longer fund ‘our’ project and we were faced with self-funding it instead. As we’d just spent a lot of money erecting another building for winter cattle housing, that was out of the question so we were forced to give up on the idea.
Wind power remains a distant view through a gap in the hedge at Rosewood Farm
Two years later it came as a huge shock to wake up to the news that the UK had actually voted to leave the EU, which set to spark a massive policy change in that we would be farming outside of the CAP for the first time - a move that even George Monbiot described as a ‘Brexit benefit’. Farming had stagnated under the CAP and we, as small farmers, had hit a glass ceiling - we were farming more acres but relied almost entirely upon the market to fund farm investment and our income. Whilst expansion of the rented grazing was theoretically possible, deteriorating fencing & other grazing infrastructure was making it harder to manage. Landowners, still being paid by the EU whether the land was grazed or not, had no incentive to invest in making our jobs easier. Any investment that we made on the land ourselves had either to be portable or expendable, and the cost of managing the grazing soon began to exceed any income.
Following the referendum nothing really changed - farming would remain in limbo as the process of actually leaving the EU was to take years, eventually coming into effect on 31st January 2020. In 2018 DEFRA Secretary of State (SoS) Michael Gove had proposed the concept of ‘Public money for public goods‘ to replace the EU payments to landowners, with funds only being made available to those who provided benefits to society that were not supported by the sale of market goods from the countryside, such as food, & energy. However the process of figuring out how that would work was hampered by Gove leaving the role in 2019 and numerous changes in government priorities and direction followed.
The EU style flat rate payments would be maintained until 2023, while the replacement Environmental Land Management Schemes (ELMS) were devised. In 2021 we were invited to apply for a pilot for one of the schemes, the 3-year long Sustainable Farming Incentive (SFI), however putting the farm into the schemes wouldn’t work alongside the conservation grazing, so we declined the offer. While the flat rate payments remained in place, the budget for SFI remained too low and the options limited so farmer uptake also remained low.
Under the leadership of another SoS, Steve Barclay, in late 2023, DEFRA revised the payment rates to encourage uptake & start to rebuild trust in the department after a series of ministerial changes and threats to ditch ELMS entirely. However conservation grazing still didn’t appear on the list of eligible public goods, which were, and still are, only available on the land you own or have a long term tenancy over. At the same time DEFRA improved the offer of capital grants available to contribute towards the cost of taking actions to protect the environment & restore landscape features such as hedgerows - an important element of the government’s target to tackle UK biodiversity declines.
The 2024 version of SFI opened in July 2024 and was to include a much greater number of options funded by a reduction in the old EU-style payments to 50% & 24% in 2024 & 2025 respectively. Our own speciality, the management of species rich grasslands, was to be added to the scheme in July 2024, with the management of species rich floodplain meadows due to follow later that year, however this coincided with a general election and a transfer of government from the Conservative to the Labour Party on 7th July, and all progress on ELMS stopped as the new government worked out it’s own priorities, farming was left in limbo once again.
Despite previously ruling out changes to Agricultural & Business Property Reliefs (APR & BPR) for inheritance tax, at their first budget in October 2024 the government announced changes would apply from 2026 that would effectively levy a 20% tax on agricultural business assets over £1 million passed on after death. Dubbed the ‘Family Farm Tax’ it would actually affect all types of privately owned small family businesses, not just farms. This was particularly worrying for the older generation and those diagnosed with a terminal illness who were not given sufficient time to adjust their plans to suit the new rules that were to be applied 18 months hence.
A month later this was followed by the sudden closure of CS Capital Grants, cutting off the previous government’s support for nature restoration overnight and again by the closure of the SFI scheme in the same way in March 2025; the floodplain meadows option having never been opened. After 9 years of discussion and planning, the new deal with farmers to restore biodiversity across England had fundamentally pivoted - without access to funding, providing public goods was no longer in focus - survival of farming became the new priority. For thirty years farmers had operated under a social contract with society to produce cheap food for the nation in exchange for support to maintain incomes and, along with all small family businesses, relief from inheritance tax.
The same hedgerow in 2025; recently laid
Suddenly the incentives to look after nature and invest their money in small business had been removed, leaving many feeling betrayed & unsure how they could survive.
The reasoning given by the government was that so few farms would be affected by the tax but even if that were the case, any continuation of the rapid increase in land prices over the past 20 years would soon draw many more farms into the taxable bracket. Although £1m of land sounds like a huge amount to inherit, many of the families affected bought their land many years ago, and were to be paying tax upon a land value that no longer reflects what you can earn from farming.
Contrary to many comments since the budget that inheritance tax would spell the end of British farming, I believe that the biggest threat has always been the family itself. Land, for farmers, is not something you can really do without, we were lucky to have started farming just before the period of rapid land price inflation but even so the cost of our most essential resource hasn’t made it easy to create a working farm from what was in the beginning, just a shed in a field. Despite being from a farming family, we were not encouraged to continue the family farm into the next generation. Why exactly this was I will never know; our dad was not one for discussing his motivations, but I guess that it had something to do with that if either of us were to take on the farm as it stood we would need to raise enough capital to buy out the shares of our other five relatives. With the returns from farming that he had experienced this perhaps didn’t feel like a realistic proposition.
When our family started farming in 1925 the Administration of Estates Act 1925 had effectively ended primogeniture; the act of passing property only to the first born male in the family line. Since then, by law at least (rules of intestacy), estate division has changed to make inheritances equal between both sons and daughters. There is no doubt that today the law operates in a much fairer way than a century before but by passing to all siblings equally, the trend is for more family farms & businesses to be sold rather than retained in the division of estates. Today this has increased land accumulation by super wealthy companies & individuals as more farming family members have decided that they’d be better off selling land rather than spending a lifetime in hard work to pay off a debt that would allow them to subsist.
Prior to the First World War, British agriculture had been struggling ever since the repeal of the Corn Laws in 1846, which reversed the protectionism that British farmers had previously enjoyed. The opening up of the American Mid West in the 1870s brought cheap grain, along with a deep depression to British agriculture. The new technology of iron steam ships also brought other food products flooding into the UK, such as American processed ‘factory’ cheese which, by 1924, represented more than 75% of all cheese sold in the UK.
The laissez-faire approach to UK farming, which continued up to 1932 with a brief interlude caused by food shortages towards the end of the war (1917-21), had forced many rural people to abandon the land to find work in the cities or to emigrate to the United States to seek better opportunities. The combination of cheap food enabling lower wages along with an influx of labour from the countryside greatly helped to accelerate the industrial revolution. By 1851 more than 50% of British people already lived in towns & cities and rural-urban migration continued so that around 80% of the UK population were living in urban areas by the outbreak of World War I.
Having been abandoned by government for so long in the previous century, land prices remained low but with war came renewed demand & values rose briefly as a result, coupled with the effect of a doubling of the rates in 1919, which forced many of the largest land owners to sell farms in order to pay death duties, there was a corresponding increase in the number of farmers who owned their own land.
While our family did not buy land in the 1920’s, my great grandfather, Richard, worked as a slaughterman for a wholesale butcher on the docks at the turn of the century, killing livestock that were brought into the country from the continent by sea. The trade was interrupted by the First World War, but with it came renewed interest in support for farming. Following the war support for farming was revoked in 1921 due to growing concerns about affordability. Having needed home grown food for a time, a degree of prosperity in farming had encouraged ex-servicemen and others to go back to the land to start producing food. The policy change and loss of support dropped agriculture back into the murky waters of free trade and many of these new farmers suffered greatly. Among them was Thomas Smedley (or ‘Boss’, as he was known within our family) a 27 year old bachelor who had invested his mother’s life savings to become a tenant farmer and then struggled to make a living from it. His misfortune brought our family to the farm, lodging with Boss which helped him to pay the rent, although the extra help didn’t prevent his bankruptcy, the proceeds of Richard’s trade did save him from destitution, enabling Boss to stay on the land with the family for the rest of his life. They moved the following year, to a smaller tenanted farm next door & Frank, Richard’s only son, went on to farm in partnership with Boss for another 42 years.
Frank & Boss at Gibraltar Farm - 1950's
The run up to war across Europe in 1939 caused a sea change in government attitudes towards home grown food with farmers again encouraged, compelled and, in some cases, forced to plough up hither to abandoned grassland & intensify food production. This trend continued in the post-war years so when the landlord decided to sell the farm for development, Frank was in a position to take on a mortgage to buy his own land. At this point the business became a three way partnership with two of Frank’s three sons, his share passing to his other son after he retired.
When Capital Transfer Tax, replaced Estate Duty from 1975, agricultural relief was set up to £250,000, roughly ten times the value of the farm at the time, so inheritance taxes were not a worry for small family farms at the time in the UK. Having ascended to the EEC two years earlier, farming was going through a period of rapid modernisation & intensification, with prices supported by the CAP, a new period of hedgerow removal and ploughing of grasslands was underway, and nature was under assault.
Meanwhile, at the other side of Europe, Romania, today famed for the survival of the high nature value Transylvanian hay meadows, was undergoing a different form of intensification with state controlled confiscation & consolidation of land as part of the socialist collectivized agriculture system (1949-1962). While the UK was modernising it’s agriculture & food was in over supply, Romania was facing food shortages as, having stripped the peasants of their autonomy, collectivization categorically failed to improve productivity by separating the people from their land.
This system continued until 1989 when revolution brought an end to communism and in the subsequent post-revolution period land was redistributed to the former peasant owners and their descendants. This resulted in a large number of small land holdings that, although returning some autonomy over food production, then disincentivised farming the land because the holdings are not large enough for the owners to make a living from, and land abandonment is now as much a threat to the rich biodiversity of Transylvania as is EU-incentivised intensification.
When our government announced changes to APR in the 2024 budget, sharing ownership of the land was also proposed as one way to mitigate the effects of the tax upon the British farming industry. As inheritance tax is only due upon the individual’s share upon death this is certainly the case, however the fundamental problem with taxing farmland is that while land represents a huge cost to the farmer who has bought it to produce food, the value no longer bears any relation to it’s agricultural productivity, so buying sufficient land to manage as a viable farm is rarely possible in a single lifetime. It took our family 42 years, a whole working lifetime to save up enough to buy a farm, with a mortgage, on top of another generation before that to start in farming.
Even before tax, when the land passes through inheritance to the next generation, any inheritor who wishes to continue operating the business as a single farm must first either buy out the other shareholders or work out how to create a viable business out of a smaller farm. The new £1 million tax-free threshold for agricultural property effectively assumed that any farm above 122 acres represented a highly profitable farm business. Not only was this grossly out of touch with what could realistically be achieved, it didn’t even take into account the value of the stock, machinery and buildings needed to farm the land. Overnight any incentive for farmers to invest & build up their business had vanished, severely impacting all the businesses that trade with farmers. While farming may not be the most profitable of industries, even when operating at break-even point a farm is buying supplies from and selling food to businesses that generate profits and taxes for the economy.
Noticeable too in the government’s tax relief reform was the lack of any changes to rollover relief (from Capital Gains Tax). This relief enables farmers to sell land for building at above it’s agricultural value and pay no tax upon the uplift in value providing that the proceeds are spent on buying more land. While this may encourage farms to free up land for building, it also increases competition for farmland by giving the farmer a huge financial incentive to buy an even greater area than they originally farmed, and the means to pay an inflated price for it. If the twin objectives of amending APR were to simultaneously lower agricultural land prices and reduce tax avoidance then ignoring the effects of rollover relief is a curious omission.
The government subsequently launched a review of farming profitability by former National Farmer’s Union (NFU) president, Baroness Minette Batters, in order to look into why farming was an unprofitable business. While it remains to be seen whether they implement any of the recommendations made in the report it does seem like a rather backwards step to first levy a tax and then investigate why it is unaffordable. Many critics saw the tax as a way to force farmers to sell land for major solar farm projects that were also being encouraged. Others, from the pro-inheritance tax lobby, argued that farmers should do something else if food production was no longer profitable & the nation could rely upon imported food alone - clearly ignoring that this had already been tried before the Second World War.
Hay cocks in Transylvania, a modern day scene reminiscent of the Yorkshire Ings in the 1950s © Copyright Paul White
In Romania, a country where further agricultural intensification could potentially supply our extra food, inheritance tax is not levied at all if the succession is completed within two years of the owners death, or 1% of the value thereafter. This encourages farmland to be passed on to the next generation and maintain the connection to the land that is such a big part of their culture. The potential for increasing food production overseas is huge but with climate volatility and geopolitical instability, how reliably can we depend upon other countries to keep feeding us?
Thankfully a government reshuffle in September 2025 had ousted Steve Reed from the role of SoS for Environment, Food and Rural Affairs after a lacklustre performance over 14 months, and now his successor, Emma Reynold’s, is charged with the task of rebuilding confidence in the government’s approach to farming & nature.
Just before Christmas last year the government announced that they would increase the Agricultural and Business Property Reliefs thresholds to £2.5m in April 2026. While this came as a great deal of immediate relief to many smaller family businesses, it did also increase the tax advantages for all farmland buyers, not just farmers, which rather undermined the original rationale for the tax of reducing tax avoidance by buying farmland. Many tax experts and also the NFU advocated for a more progressive deferred inheritance tax, due if and when the land was sold by inheritors. This would have preserved the protection for family farms whilst actually increasing the potential tax take.
At the Oxford Farming Conference in January, the SoS revealed that SFI scheme would be reopening for applications this year, with a slimmed down version of the original, initially rolling out for small farms and those not currently in a scheme in June and for all farms in September. Having been without any form of funding for nature for 15 months, many farms have struggled to justify maintaining the Public Goods, and for us it has been down to our customers to keep our provision going. It remains to be seen whether support for floodplain meadows will survive the axe, but with flooding increasing across the country, I would have thought this should be a priority.
It rather seems that the government has failed to appreciate the importance of both food security and biodiversity to the country, instead believing that Public Goods provision represented a hand out to farming. Many farmers who, despite slim profit margins, chose to fully engage with the process and invest their money into the schemes have been left with the task of trying to plan with no certainty of whether any help would be available in the future.
Our family farm was not unusual, they followed the government policies of the twentieth century, although they didn’t specialise and expand to the same degree that many have done. Many small, mixed farms like this have not gone out with a bang, going bankrupt, as they did in the 1920’s, but rather there has been a gradual and prolonged decline happening around us as each passing generation have had to make the decision whether or not they feel able to carry on farming. Without a next generation that wants to take on the farm, many farmers choose to give up farming and retire, renting the land out to those who are seeking to expand. The farmsteads, eventually, maybe sold off for residential use or development, and rural villages gradually lose their character and green spaces.
In England 54% of farms are farmed by the owners, 14% are tenanted and 31%, like Rosewood, are a mix of the two. While there is no single dominant pressure that kills the family farm, the tax relief change is still, however, regressive; it does not make it easier for small farms to continue, as the benefits apply whether you buy land to farm or to avoid tax, it is the same whether you decide to continue an inherited business or sell it immediately to the highest bidder after inheriting, and it is the same if you farm intensively, producing lots of food, or if you restore it for nature and derive no income from it. Inheritance tax on land is, to the farmer, a tax on inflation - the rise in value of the land that you farm can only benefit you if you sell it, and that is the point where tax should be due. If the aim of land tax is to remove the incentive to buy land for inheritance tax avoidance then tax on sale would both raise more tax overall and protect working farms.
In 2000 the average age of a UK farmer was 54, and today it is 59; farming, despite all the technical advances of the 20th century, is still a physically demanding job and now, increasingly, it is also a highly technical job so we need to encourage more young people into food production. While many of those advances & policies had negative consequences for nature, our challenge now is to restore biodiversity, which will remain an equally physical task.
Urban development now covers Gibraltar Farm
There is no doubt that farming policy had a strong influence on the British countryside over the last century, which you can read in the landscape. Our original family farm, the fields that Boss & Richard grazed and made hay from are now covered by houses, fast food outlets and a huge 24 hour ASDA store. Frank, in his later years, was able to buy land and ‘improve’ it by draining, removing some hedgerows & ponds generally following the EU incentives of the time. We, as his grandchildren, benefited directly from the stripping of the land of it’s natural features, it fed & clothed us, and then it inspired us to farm differently ourselves at Rosewood, restoring some of the natural features that past generations could not, at the time, afford to retain.
For now, at least, the family farm that Richard began will continue as our cousin has returned to work the farm with his father and must now navigate how to make a living on a reduced acreage under current government policy. Whether the farm will be small enough to qualify as a ‘small farm’ for SFI purposes remains to be seen but currently policy appears to be about cutting funding state for both food and ‘public goods’. Brexit gave us the rare opportunity to break free from the Common Agricultural Policy and focus on providing public goods that it has so efficiently eroded over the course of half a century. Sadly the chaotic politics of the past decade has left farmers without any assurance that government can be trusted to commit to this policy for the long term. To restore biodiversity to our countryside farmers require the direction, certainty & means to restore nature on their land along with the confidence to invest all of their life’s work and savings into doing so, ever since the election in July 2024 all of these have been severely lacking, and that is why farmers, of all scales & types, have been protesting.