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Farmers are “bewildered and frightened” with many questioning the future of their businesses because of the government’s proposed changes to inheritance tax, an independent review of farm profitability has found.<\/p>\n
The long-awaited government-commissioned report was published on Thursday with 57 recommendations designed to improve productivity, investment and resilience in agriculture.<\/p>\n
But author Baroness Minette Batters, former president of the National Farmers’ Union (NFU), warned there was “no silver bullet” to making farms in England profitable.<\/p>\n
Environment secretary Emma Reynolds said the government and the farming and food industries would work much more closely together in the future.<\/p>\n<\/div>\n
That would be done through a newly created farming and food partnership board made up of senior industry and government leaders that would “drive growth, productivity and long-term profitability across the sector”, she explained.<\/p>\n
“When farming thrives, the whole country benefits. British farmers are central to our food security, our rural economy and the stewardship of our countryside,” the secretary of state added.<\/p>\n
“This is about serious action to remove barriers, unlock investment and make the food system work better, so farm businesses can grow, invest and plan for the future with confidence.”<\/p>\n
Baroness Batters’ review called for a “new deal for profitable farming” that would recognise the true cost of producing food and delivering for the environment.<\/p>\n
The report did not look in detail at the government’s proposed changes to inheritance tax, which are set to apply to farm businesses worth more than \u00a31 million at a rate of 20% from April 2026.<\/p>\n
But Baroness Batters said it was raised as the single biggest concern by almost everyone in the farming sector she talked to as part of the review.<\/p>\n<\/div>\n
She said the sector had faced a sharp rise in costs and increasingly extreme weather, with severe drought this year.<\/p>\n
Uncertainty surrounding the closure of applications to the sustainable farming incentive scheme – the post-Brexit agricultural payments scheme – and proposed changes to inheritance tax had created “significant” ongoing concern, with some farmers “questioning viability let alone profitability”.<\/p>\n
In the review, she said: “The farming sector is bewildered and frightened of what might lie ahead.”<\/p>\n
The report added that costs would be 30% higher in 2026 than they were in 2020, while the \u00a32.4bn farming budget for England had been almost the same since 2007 – even as farmers and growers are asked to do more to comply with environmental legislation, with less funding and no certainty.<\/p>\n
Baroness Batters added: “Farmers don’t want handouts from the state, they want nothing more than to run thriving, profitable farming businesses, by earning a fair return for what they produce.”<\/p>\n
The NFU said it was “a thorough and complex report” which was “right to recognise reform is needed”.<\/p>\n
President Tom Bradshaw said that of the issues raised, fairness in the supply chain was a “top priority” alongside planning reforms and focus on growing exports.<\/p>\n
“But alongside this, there are other immediate actions that are needed to boost British farming like providing much-needed clarity and certainty on the future of the sustainable farming incentive and doing the right thing on the pernicious inheritance tax changes,” he added.<\/p>\n
Gavin Lane, president of the Country Land and Business Association, which represents rural businesses and landowners, welcomed the review and said it was now time for “urgent action”.<\/p>\n
“As this report highlights, profitability across the sector is perilously slim, with farmers battling high input costs, low commodity prices and volatile weather conditions.<\/p>\n
“Many farm businesses are marginal or loss-making, yet will soon be hit with unaffordable inheritance tax bills, which in many cases will dwarf their annual profit,” he explained.<\/p>\n
In response to the review, the government said it was also taking action on planning reform to make food production a clearer priority, speed up on-farm reservoirs, polytunnels and farm shops, and make it easier for farmers to invest.<\/p>\n
The government is also stepping up action on supply chain fairness, tackling barriers to private finance and supporting exports and new markets, a spokesman for the Department for Environment, Food and Rural Affairs (Defra) said.<\/p>\n<\/div>\n