Ahead of tomorrow’s budget, the NFU has joined forces with Tesco, Aldi UK, Morrisons, Lidl GB, Co-op and Ocado in urging the government to rethink the family farm tax, highlighting that reform is essential if farm businesses are to keep investing in food production.
The plea, from NFU president Tom Bradshaw, has been co-signed by Tesco UK CEO Ashwin Prasad, Aldi UK CEO Giles Hurley, Ocado Retail CEO Hannah Gibson, Morrisons CEO Rami Baitiéh, Lidl GB CEO Ryan McDonnell and Co-op Group CEO Shirine Khoury-Haq.
What do farmers and retailers have in common, you may wonder? Quite simply, we share the same ambition: to get nutritious, affordable, sustainable food on to your kitchen table. Yet the family farm tax, which the government imposed at the last budget, threatens this.
That’s why we’ve come together to call on the Chancellor, this time round, to do right by Britain’s farmers.
These are the people who keep our supermarket shelves full, who produce the raw materials for your birthday cakes, celebration steaks and veggie tray bakes. They are the bedrock of one of the UK’s largest manufacturing sectors, which supports over 4.2 million jobs.
Yet farmers’ confidence is now at the lowest level ever recorded.
There are multiple factors driving this uncertainty, from a planning system that holds back rural growth, to a lack of certainty around environmental schemes and difficulties recruiting skilled workers throughout the supply chain. Not to mention unpredictable and extreme weather, which has made it much harder to produce your food.
But it’s the family farm tax that is keeping farming families awake at night.
Like you, farmers understand they have a part to play in supporting our vital public services, and they do. But this additional tax disproportionately hammers family farm businesses, while failing to prevent others buying up farmland to simply shield their wealth.
The issue is, farms often include valuable land and assets, but that value doesn’t actually hit their bank accounts, and the new policy will force many to sell off parts or all of their farm.
What will that mean for our food security? Our rural economy and communities of which farms are the beating heart?
Food security is at risk
While we have yet to see the worst of the impacts from this policy, we are already seeing investment stalling.
Farmers are holding off from building new grain stores to keep wheat dry, postponing introducing robotic milkers that boost productivity, and scrapping building reservoirs to secure water for vegetable crops. These decisions have real-world consequences for the resilience of our food supply chain, all at a time of heightened global instability.
This tax has forced those farmers and growers who have capital to halt investment because of potential liabilities they were previously assured would not be introduced.
It is no surprise, then, that MPs from all parties have been raising their concerns directly with the Chancellor. For example, in parliament recently, David Smith, Labour MP for North Northumberland, called for family farms to be protected, while Maya Ellis, Labour MP for Ribble Valley, urged the government to support “hardworking farmers who are the backbone of the country”.
So what does all this mean for your weekly shop? Put simply, resetting how confident our farmers are is crucial to maintaining a resilient supply chain, keeping food inflation in check and unlocking growth across the food sector. When farmers invest, the whole system, from field to fork, benefits.
But it isn’t all doom and gloom. There is still time for government to act at the budget. By rethinking the family farm tax and improving the annual investment allowance, ministers could send a clear signal that Britain backs its farmers.
Because we want farmers’ confidence to be every bit as full as our supermarket shelves.
Tom Bradshaw is president of the NFU
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