The Farmers Fight

I don't know anyone who is anti-farming, at all.

Many of us are anti 'toffs and fatcats' (The Mirror's words, not mine, but happy to borrow)- who are behind the recent reaction to IHT, at 20%, for above 3 million in most cases, being charged- highjacked by the above very large landowners and many 'pseudo' farmers.

Many "small" family farms, just keeping heads above water, are worth more than £3m.

Rich in assets but not reflected in the income despite working hours that most people would refuse to do.
Even paying off IHT over a number of years would not be feasible so, of course, these farms will be sold off to very large landowners and the demise of the family farm will approach more rapidly.

There surely was a better way to target the very wealthy?
No government seems to be able to grasp that nettle.

The main one being that farming families cannot take time off work during July - October

Any ( normal ) family who attempt some sort of break in peak season is going to be paying thousands and thousands. Unattainable for many.

What I find interesting is looking at the economics of Dyson's agricultural operations.

He owns some 36,000 acres, purchased for about £400 million. He invested £130 million in improving land, laying hedges, building field walls and tree planting. Also, I assume, buying machinery and equipment. So, an outlay of some £539 million.

His pretax profit in 2923 was £5.2 million. I make that a profit of some 1% of his outlay.

If Dyson can only make 1% profit what do 'ordinary' farmers make?

If he had invested that money at 5% he would be earning £26 million a year on it. OTOH, it being farm land it would have saved his heirs some £200 plus million in IHT on his death...

Interesting...

If the future for farming in Britain is wealthy landowners - and this tax could move farming in that direction away from family farms - then Dyson's method of farming would be the model to follow rather than anonymous private equity firms or wealthy people who just buy up land to avoid IHT.

And keeps it in food production.

Wyllow3

And keeps it in food production.

Only if it remains profitable.

I find it very worrying.

There are other ways of targeting the extremely wealthy because private equity firms will not be bothered about IHT, there are big firms which could be targeted and this will not even touch the edges of this supposed black hole.

Allira

If the future for farming in Britain is wealthy landowners - and this tax could move farming in that direction away from family farms - then Dyson's method of farming would be the model to follow rather than anonymous private equity firms or wealthy people who just buy up land to avoid IHT.

That depends on whether or not the 'wealthy' are happy with a 1% return on their investment. They may prefer to turn the land over to other more profitable uses, or just take rents.

The interesting question for me is, will the fact that the IHT payable is half the normal rate, and can be paid over 10 years still make investment in land an attractive proposition?

They may prefer to turn the land over to other more profitable uses
That's the worry.

The problem is that it could be (and already is) private equity firms buying up farmland and they will find ways around this tax anyway - they won't be leaving it to their heirs.

I do feel the farmers have picked the wrong fight.

It seems they feel that they should be compensated for poor income by being given allowences on the capital value for inheritance purposes. Why? This does not help them improve their income, or make it easier to improve their return on capital which is currently so low for many.

If the IHT was 100% the cost of land would drop like a stone as it would no longer be a tax wrapper and those purchasers would have to look elsewhere. There would be positive outcomes from this.

Currently, the cost of land excludes the purchase by younger farmers who cannot borrow to invest if the can't show the business can make the acceptable return on capital. The aging of the workforce will not help in food production.

With the land use returning to farming, rather acting as a tax shelter, farmers can fight the real fight. I don't believe this will be easy. Farming income has been difficult since the 1960's and 70's when Resale Price Maintenance was removed and first Convenience Stores, then Supermarkets appeared. Brexit has only added to many of their woes.

The buyers power to negotiate by comparison to the farmers power has beaten farmers income down. I doubt anyone would suggest its return to RPM, nor are we likely to return to the EU. However, somehow farmers need to take, or be given, a more equal negotiating position. That is the fight they should be having.

Upthread there has been exploration of the problem of supermarkets forcing down prices farmers can get and the problem of people being used to buying cheap food from abroad - farmers squeezed.

But whats the answer is the problem. If farmers got a fair price prices would go up, and the government would have to intervene in food imports in some way to keep UK food competitive, and however much sympathy people have for the farmers, some cant, and many won't, be prepared to pay more for food.

I came to this thread when 31 pages had been written and do not have the time to read them. I am sorry not to get able to do so.

Resale Price Maintenance was a blunt way of helping farmers and it was hoped that getting rid of would, as you remind us, bring down prices.

It would be interesting to know if research has shown this happened. One thing that I believe has been shown to be true is that many families, particularly low income ones, now live on ultra-processed foods. This seems to me to have maintained higher prices for the consumer just switching profit from farmer to manufacturers and giving the NHS high levels of obesity to deal with in the process. If this repeats what others have said I think it bears repetition.

There was a drop in the birthrate in the '60s too and those who, like me, lived and had family working in farming communities watched them rapidly change as they lost their schools, shops, local businesses and often the smaller farms. Farming turned into "the countryside" and communities into dormitories for bigger towns and cities.

I later worked for a quango which dealt with "food" for the government. Very little seemed to be about food production and much about food manufacturing.

I am not suggesting that change is not inevitable, but much does not seem to have changed for the better where our food is concerned.

I don't have great solutions to offer but getting and keeping the land farmed does seem to be a first step. Stopping land being a tax avoidance vehicle does seem like a good first move.

I do believe we should protect older farmers who do not have time to make this work and I would suggest the 50% rather than 100% is an attempt to do that.

Perhaps the next step is to remove the very highest processed foods which often seem to be just a collection of chemicals held together by foods which become toxic when over consumed?

Politicsnerd I've made this argument several times on this thread. If farmers can't produce our food at a cost the public can pay then they have to be subsidised on what they produce or paid to maintain the land for other purposes ie biodiversity, recreation, development etc. We need a well managed properly thought out plan and since leaving the EU we haven't had one. This was totally down to the Conservatives and yet another mess they have left in their wake.
Farming, like most things, has changed radically and for small farmers to survive they need to be pretty entrepreneuriable and adaptive.
In the county I live in 900 acres are used to grow tender stem broccoli, it's a labour intensive crop but it's profitable. Farmers grow it for a big company that sells to all the major supermarket. They rely on seasonal migrant workers as it's picked by hand and frankly they can't get locals to do it and without them they don't have a business. We also have a big herb grower locally with the same problem and 🍓 raspberries, 🍒 etc etc. I can't help wondering how many people who are so vocal in support of farmers are also supportive of their need for migrant labour ?

Raspberry picking has been mechanised ….. very recently.

Jeanathome

*The main one being that farming families cannot take time off work during July - October*

Any ( normal ) family who attempt some sort of break in peak season is going to be paying thousands and thousands. Unattainable for many.

The big difference is that farmers cannot take time off during those months because they have a harvest to bring in, often working from 5 am through to late evening, especially if the weather is dry. What is a normal family,?? Arent farmers normal families. Why be divisive.
Because people can't afford to holiday during summer months is most definitely not the fault of farmers.

Wyllow3

Upthread there has been exploration of the problem of supermarkets forcing down prices farmers can get and the problem of people being used to buying cheap food from abroad - farmers squeezed.

But whats the answer is the problem. If farmers got a fair price prices would go up, and the government would have to intervene in food imports in some way to keep UK food competitive, and however much sympathy people have for the farmers, some cant, and many won't, be prepared to pay more for food.

Be prepared.

Just as subsidies end, IHT will start to bite.

I can't help wondering how many people who are so vocal in support of farmers are also supportive of their need for migrant labour?

Strange question.

Those who support farmers are probably the same people who know something about farming and would know there is a need for seasonal labour.

I dont really understand how current subsidies work or whom they currently benefit, Allira. (ie food? environment? small farmers or big landowners?). I notice that plans seem to send in 2027?

Allira

^I can't help wondering how many people who are so vocal in support of farmers are also supportive of their need for migrant labour^?

Strange question.

Those who support farmers are probably the same people who know something about farming and would know there is a need for seasonal labour.

I'm presuming this is addressed to those who limit the immigration/migration required for seasonal workers but also say they support farmers?

Are there any posters on here who said that? Sorry, can't trawl through but it seemed to be a question thrown out without any reason to substantiate it.

I might be wrong.

I can't recall a post either, I meant "those" who politically take that position on immigration not GN posters.

ronib

Raspberry picking has been mechanised ….. very recently.

Of course currently they can only pick up to 2kg an hour - the same as a person.
I think the initial costs are such that only mega-farms can use one.

And I don't know if they can pick all varieties?
Maybe they are better at some than others?

Wyllow3

I can't recall a post either, I meant "those" who politically take that position on immigration not GN posters.

It wasn't you who said it!

Confused by now, Allira trying to trace who said what 🙂.

Jeanathome

*The main one being that farming families cannot take time off work during July - October*

Any ( normal ) family who attempt some sort of break in peak season is going to be paying thousands and thousands. Unattainable for many.

Besides, there are many other professions that have great limitations on when holidays can or not be taken.