Do I agree with farmers?

[JudesBiggestFan]

I'm generally politically aware but on this issue of farmers' inheritance tax, I can't decide/figure out from the media coverage if it's a good or bad plan?
Jeremy Clarkson's involvement has not helped me feel any sympathy for farmers , but I may well be wrong! For all the protest and hullabaloo...is it worth doing?

@FudgeSundae I find it strange that business property relief isn’t being mentioned more.

The media are generally lazy and obsess about one particular issue at a time.

It was the same with the 3 million excluded from covid support schemes - the media did exactly the same and showed no interest at all in all the different types/reasons for the excluded - they obsessed about one reason, which was probably the weakest, but easiest to explain, which is why Joe Public never really got on board with proper criticism of the Government (nor did any of the opposition parties - Reeves in particular showed in Parliament she hadn't a clue and couldn't care less!).

Agreed. There is uproar in some niche industries (holiday park homes for instance) but generally family businesses aren’t an organised group unless concentrated in a particular industry.

thanks for your helpful explanation @crumblingschools - I think I err on the side of the farmers then!

I don’t understand why land is so valuable if the income earned from it is so low. It is against basic economic principles! If land values are being pushed up by landowners using it to protect assets from IHT, then surely this change reduces land values and even fewer small farmers will exceed the IHT threshold …

Alternatively, the food processors and supermarkets are taking too much of the pie and small farmers’ ire might better be directed in that direction.

See the very helpful post from @WhitegreeNcandle just two or three above yours. 🙏

Very interesting post @WhitegreeNcandle. It does seems fair to do what you suggest regarding older farmer over the next 18 months.

On the subject of JC, it wasn't only him-Farage, Tommy Robinson and all the nasty end of the far right have jumped on the bandwagon.

You are right. I guess land is generally valuable also because of property development vultures. But supermarkets need to be reigned in to pay properly - and to be prevented from passing that onto the consumer. They have monopolised. Tesco, Sainsbury's, Asda combined are something like 70% of UK food market. They need to be broken up. Like many other corporations of our time.

Land is valuable because it is a finite resource and agricultural land is being bought up by developers and energy companies to put houses and solar/wind farms on. Our food security is already in peril - IMO this policy makes it worse. There should be exemptions to IHT if farms are actually producing food etc - as someone upthread said, having 10 yrs of accounts or something.

When smaller farmers sell land to pay IHT, the farm gets smaller and less able to function as a business, until eventually the acreage is too small to cultivate so the farm gets sold = more development, less land, higher prices....

The return on investment in farming is one of the lowest of any industry, and with climate change and ever increasing energy/labour/demands from supermarkets costs it is harder and harder to make a living. The amount of money this tax will raise runs the NHS for a DAY but the damage it will do to the rural economy will be felt for years.

Amazing isn't it that farming land is being "converted" to renewable energy, yet we'll have to increase the amount of food we import (via hugely polluting ships and lorries) from countries that aren't obsessed with renewable energy, so the actual "total pollution" is likely to be higher than if we continued to produce food in our own country, even if using non renewable energy. It's just another "offshoring" of bad things, like the way we offshored our manufacturing production and offshored our waste!

We're already dependant on other countries for the goods we need, the energy we need, and now moreso the food we need. We're going to be well and truly stuffed in the future if the other countries choose not to sell to us, maybe because they need their resources for themselves or higher paying countries. Not to mention our balance of payments deficit is getting worse and worse, yet a few decades ago, it was regarded as the economic performance barometer.

Quite. The lack of joined up thinking on future infrastructure and food/energy/water security from successive governments is shockingly shortsighted.

I think it's a disgrace that farmers are exempt from inheritance tax, it was just a massive loophole. Labour has got this right.

There are historical reasons for all the rules and reliefs which people wrongly think are "loopholes" introduced over several decades.

Unfortunately, comments like yours are just "politics of envy" which cause damage to the economy. I presume you're in favour of VAT on private schools too, which likewise will actually achieve nothing but "punishing" people you clearly don't like.

All this is a really new low for politics.

Perhaps the current crop of politicians should actually take time to research why such rules/reliefs were brought into place back in time and then they may understand the entirely logical reasoning behind them!

What I think will happen is more instances of splitting the property title and gifting parts of the farm business to sidestep the retention of benefit test or to stretch the allowances.

It's not that IHT can't be avoided but it all now requires far more thought and cost, it's clunky and comes with a lot of inherent risks.

Wow...Farage is that you?

https://assets.publishing.service.gov.uk/media/601041de8fa8f5654da17c26/fbs-evidencepack-28jan21.pdf

This is interesting reading. The reality is they 8% of farms produce over 58% of output.

Large farms are more effective and productive - this 8% occupy only 30% of farm land but produce 58% of output

There are lots of smaller to middle life style farmers who don’t chase profit. They have the land but have off farm pursuits eg jobs off the farm or other businesses etc

Tons of smaller farms barely producing virtually nothing and not sure what that is about.

So there is a strong suggestion that to be more efficient we need larger units and not the multitude of smaller holdings.

It seems that a rationalisation of farming is required.

Same philosophy applied to retail shopping in the 80s and 90s when big stores dominated the High Street and caused thousands of smaller/independent stores to close. We now see the effects of that short-sightedness due to lack of competition so the big stores have us over a barrel, in the same way they have farmers over a barrel and can dictate prices to them etc. I think the "big is best" philosophy is showing it's true colours in terms of lack of competition, lack of choice and price controls, none of which is beneficial to the customer.

Do some view this a war against country life in general (not many core Labour voters)? I get the impression many are sympathizing with farmers especially in the shores rather than cities as they view this as an assault on a way of life and demographic that is connected to them.

I wonder to what extent this has upset people because it's not only a tax but a perceived threat to some consider an essentially British way of life which underpins our nostalgic view of country life?

I am pretty left leaning, I agree with the VAT policy on private schools. I don’t agree that tax loopholes should be available simply for owning land. So I completely support the fully taxing of landowners and others like lifestyle farms paying this tax.

I say this because it puts my overall political views into context. I fully support genuine family farms on the basis that they literally produce food for us to eat. Splitting up such farms to be sold to whomsoever wants to buy it for whatever I going tax breaks might be available - forestry plantations anyone! is wrong because food is a national need and security issue. There should have been a 2 pronged approach involving clear definition of an actual productive farm, and after that to present the separation for IhT, and in all cases if the farm is sold then IHT becomes payable to all forms of land/farm ownership.

If you look at the Gov figures 48% of farms are producing less than 25,000 per annum output. They are hardly feeding the nation.

There are a few large farms essentially feeding the nation combined with some medium to large farms. The rest are tinkering. Moreover even the grain they grow often is non edible grain and sold abroad for animal feed.

This whole feeding the nation thing is over stated.
we only produced about 60% of what we need and as almost 50% of that is produced by 8 % of farms not sure how the other 92% are feeding us. They are producing at best less than 30% of what we need.

As farming goes vertical and more high tech those figures will be more stark. The future is larger units with cheaper land price so more production per acre.

However small is beautiful does not and has not worked. The competition is amongst the larger retail stores and that has kept prices down hugely. Food is very cheap in the UK compared to other European counties.

We can’t have tinkering farmers who have other day jobs eg lawyers, accountants etc and run their small holding as a side line ( 48% of farms produce less than £25,000 ) it’s not efficient. they aren’t farms they are small holdings most likely with a bit of camping attached and a few cows.

The medium to larger farms need to get more efficient eg having fields all near by not spread all over and clear business strategies. The life style thing has to change. Either they are businesses or not . They can’t be gentlemen farmers any more. It’s the same as any other profession. … on the high street.

Interesting food for thought (if you pardon the pun)

Yes and moreover there will be a greater need for more intensive investment into farming which smaller farms won’t be able to provide.

As more farming switches to vertical farming ther eill need funding from eg REITS etc. this is beyond the capability of life style farmers.

Vertical farming will be more efficient per acre

will cut down on transport miles as it can occur close to large urban areas

will also be less demanding on water and energy

can we powered by renewables or even city heat schemes

will cause less run off pollution in rivers

will be more nutrient dense as there is less loss on transport.

There might be an issue with bees so they would have to be provided for.

in a few years time it will expand from eg salads to tree grow fruits and other veg.

Farming will undergo a revolution. There will be large scale highly profitable piggeries, cattle etc
There will be large scale grain and also vertical farming. The middle farmers will have to take the plunge and get bigger, become corporate maybe set up as limited companies so kids get shares given to them to lower IhT/ CGT huge hits. They attract huge amounts of inward investment with renewables / vertical farming and also can buy up the smaller farms that really are not doing much.

https://committees.parliament.uk/writtenevidence/108204/html/

Average farms will not be able to provide the inward investment needed for the future to feed the people.

The future is large grain farms / large animal husbandry but less as more people eat less meat due to the impact on the environment and this vertical farming.

Small farms will have a novelty environmental value,
medium farms will have to diversify hugely and do rewilding etc and most of our food will come from major investment combined with renewable energy supply.