[News] Farmers

[Herr Tubthumper]

This policy won't help with this in any way. The small parcels of land that will be sold off to cover the tax will not be big enough for any realistic commercial farm to exist on. They'll more likely fall out of farming use. The fact this argument is being trotted out shows a level of ignorance amongst those defending the tax.

There’s been suggestions that trusts or converting to a limited company will help? Why not convert to a limited company?

 

[Thunder Bolt]

Maybe the bigger land owners, East Anglia was covered with Vote Leave posters back in 2016

According to the NFU, the farmers voted 52/48 so identical to the rest of the country.

 

[chip]

I was talking to the manager of a large farm a couple of months ago, he was telling me that the value of farmland had increased from £2000 an acre in the early 2000's to nearly £12,000 an acre in 2024. This had left his boss an extremely rich person but the problem was that the productive capacity of the farmland was now extremely low when compared with the value of farmland. Farmland should produce an economic return that is relatable to its value and the return on the capital employed, but this is now completely out of kilter. Buying farmland doesn't make economic sense based in the returns that you get, yet there is no shortage of buyers and many of them - 56% in 2023 were non-farmers (https://farming.co.uk/news/strutt--...t-more-than-half-of-farms-and-estates-in-2023). Now it doesn't take a genius to work out what's been causing all these non farming investors to pile in over the past 20 years, the inheritance tax loop-hole that buying farmland affords! Surely It therefore makes perfect sense for the government to shut this loophole and to stop the transfer of land from farmers to investors who are buying it purely as a financial instrument that allows them to minimise their taxes.

yes, it makes you wonder why they didn't do exactly that.

 

[Since1982]

Farmers would've voted in different ways. It's mentioned in a spiteful, not cerebral, way in these recent discussions about IHT. In the same way that 2.38m pensioners should be cold this winter because more of the older demographic voted for Brexit, payback,

You obviously know my mind better than I do. Well done you.

 

[ROSM]

Had a long chat with one of my old schoolmates at the weekend - her and her husband are in the process of giving up their (pig) farm. They simply can’t make it pay any more - meat prices continually squeezed by the markets, costs rising, regulation strangling them etc etc. Actively encouraged their kids away from it as they could see what was coming. Another mate who runs a chicken farm (he started when we were at school) is being absolutely stifled by regulation too and is close to packing it in.

And this is the issue - there is so much that cause issues to farmers that I am surprised this is the hill they are now fighting on.

The irony is that the 40bn black hole is aligned to the 40bn a year that is now estimated to have been lost due to Brexit (pretty much as forecast by Osborne and Mark carney back in 2015/16)

 

[dazzer6666]

And this is the issue - there is so much that cause issues to farmers that I am surprised this is the hill they are now fighting on.

The irony is that the 40bn black hole is aligned to the 40bn a year that is now estimated to have been lost due to Brexit (pretty much as forecast by Osborne and Mark carney back in 2015/16)

I suggested earlier it's the straw that's broken the camel's back - I guess all of the other issues are a piecemeal collection that combined (over many years) have made life increasingly difficult, but this is a new, headline change by a new government so presents an opportunity to kick up a fuss.

 

[Uter]

I was talking to the manager of a large farm a couple of months ago, he was telling me that the value of farmland had increased from £2000 an acre in the early 2000's to nearly £12,000 an acre in 2024. This had left his boss an extremely rich person but the problem was that the productive capacity of the farmland was now extremely low when compared with the value of farmland. Farmland should produce an economic return that is relatable to its value and the return on the capital employed, but this is now completely out of kilter. Buying farmland doesn't make economic sense based in the returns that you get, yet there is no shortage of buyers and many of them - 56% in 2023 were non-farmers (https://farming.co.uk/news/strutt--...t-more-than-half-of-farms-and-estates-in-2023). Now it doesn't take a genius to work out what's been causing all these non farming investors to pile in over the past 20 years, the inheritance tax loop-hole that buying farmland affords! Surely It therefore makes perfect sense for the government to shut this loophole and to stop the transfer of land from farmers to investors who are buying it purely as a financial instrument that allows them to minimise their taxes.

Reading this thread I was wondering about exactly this, i.e. why is there seemingly such a big disconnect between the value of farms and their profitability. I assumed it was the tax loophole that had artificially inflated their value and you are similarly minded. I feel some sympathy for farmers, but I think it's only right that this loophole is closed. It should see the price of farmland eventually return to something more in line with it's value as a productive business.

 

[South Stand Bonfire]

Nicky Campbell's phone-in this morning is on farming.

There is a bus load of farmers on their way to London to protest against the introduction of some inheritance tax for farmers.

Crikey, what an entitled bunch.

They seem to have lived a simple life, with 'very little income' (some saying a few tens of thousands of pounds profit a year), but if their farm is worth more than three million pounds then, as a married couple, they will be liable to 20% inheritance tax (half what you and I pay), with this change coming in a couple of years, if they 'do nothing' to mitigate against the change.

Apparently farming is 'not a commercial business'. This means it is some sort of vocation, with little reward, that is offset by not having to think about anything, such as investment, saving, pensions and money in general.

And it's not fair.

Well, diddums.

A caller has pointed out that all that is needed is planning, but the farmers seem to think they shouldn't have to plan or think. OK, mates.

Final bleat: 'the government are taking away our way of life'. What did I do with that small onion I had in my pocket?

I think on the one hand the Inheritance tax policy could have been better communicated. On the other hand, a group that claims to be impoverished - and I am sure there are some that do need support and the retail industry has shafted a lot of them over the years - but has Jeremy Clarkson as their celebrity spokesperson, may have difficulty acquiring the nation's sympathy.

 

[Harry Wilson's tackle]

What a load of uninformed twaddle!

The value of a farm has nothing to do with the earning capacity and if it is passed down through generations its value is essentially meaningless. The average return on capital in farming is less than 1%. There is no other industry that could survive on that but family farms do because they work crazy hours and are prepared to earn very little. We take advantage of that by demanding cheap food, often at a level below the cost of production. Farming has the highest fatality rate of any industry partly due to excessive tiredness from working hours that would be illegal elsewhere in the economy. Also the highest suicide rate - but DIDDUMS to that!

No one will be able to inherit the family farm and afford to pay the IHT. The income is just not there. So the land will be sold but will not be purchased by another farmer as it is impossible to buy land and farm it profitably. eg An acre of arable land is worth c.£12000. That acre will deliver c.£600 of total wheat output (ie before all growing and business costs are deducted). Do the maths. So the land is lost to food production - where is your onion going to come from?!

But the demos are not just about IHT but this has been the final straw for an industry that has been hammered by successive governments, is seriously struggling to survive (unless you are the likes of dyson or Goodwood estates) and yet we all need to eat!

There are perhaps many people or even professions that you could accuse of being entitled - farmers are certainly not one of them

Nonsense. You have just hitched a ride on the hysteria bus by the sound of it.

There is plenty of balance on the thread. Even posts I consider too left wing for my preference. The true implications have been explained by others who have taken the time to dig out the facts.

I admit I put a spin on the opening post, but if you read between the lines, there is a serious point. We can't all hire a bus so we can scream at parliament every time the government does something we don't like. I have the same scorn for the protesting farmers as I had for the 'just stop oil' loonies (and the poll tax rioters for that matter), albeit the latter are worse by dint of the disruption they caused.

Perhaps if farmers hadn't so overwhelmingly voted to leave the EU (and thereby kiss goodbye to all their subsidies) they'd have less to worry about. And I read about all the farmers and their lot ad nauseam in Private Eye, going back over decades. Not exactly a left wing rag, but one that once published a cartoon of a woman in wellies and headscarf, with a shotgun, and the caption "Give us our subsidies, and git orf my land". Harsh, but....

 

[nicko31]

And this is the issue - there is so much that cause issues to farmers that I am surprised this is the hill they are now fighting on.

The irony is that the 40bn black hole is aligned to the 40bn a year that is now estimated to have been lost due to Brexit (pretty much as forecast by Osborne and Mark carney back in 2015/16)

There are far bigger challenges for farmers that are alive than dead ones. But people were weird about Inheritance, its not just farmers

There are far bigger issues like the trade sanctions on exporting British product to our largest trading partner 22 miles off Dover. Business has been badly effected and Chinese "Pork Markets" have not materialised

 

[ROSM]

I suggested earlier it's the straw that's broken the camel's back - I guess all of the other issues are a piecemeal collection that combined (over many years) have made life increasingly difficult, but this is a new, headline change by a new government so presents an opportunity to kick up a fuss.

Agree totally. The question is, now this change has been announced, will people like Clarkson look to offload their land. Will prices return to their more natural trajectory and if so, if either or both happen, will this reduce the numbers who will be subject to IHT?

 

[Harry Wilson's tackle]

I think on the one hand the Inheritance tax policy could have been better communicated. On the other hand, a group that claims to be impoverished - and I am sure there are some that do need support and the retail industry has shafted a lot of them over the years - but has Jeremy Clarkson as their celebrity spokesperson, may have difficulty acquiring the nation's sympathy.

I agree.

That said, no amount of mansplaining would mollify the farmers, judging by all the 'birthright' twaddle I heard spouted on the radio earlier.

Sometimes it may be best to just get on with it. At least labour can't be accused of bullshit spin.

Starmer is emerging as someone with a complete charisma bypass. This suits me fine.

The alternative, seeing the farmers being soft-soaped by Johnson till they literally come with joy at at the prospect of 'doing our bit in these difficult times caused by the last labour government' would have been a tough watch.

 

[A1X]

It’ll just reduce our own self sustainability and open up the greenbelt to expensive housing development. Winners, the corporations, losers the country and its inhabitants.
This is bordering on Truss thinking.

Worth pointing out at this juncture that the UK has not been remotely self-sufficient for food since the late 18th century.

Hence the whole Empire thing and rationing during the war.

 

[dazzer6666]

Agree totally. The question is, now this change has been announced, will people like Clarkson look to offload their land. Will prices return to their more natural trajectory and if so, if either or both happen, will this reduce the numbers who will be subject to IHT?

Should certainly impact agricultural land values...............if there's no longer a tax advantage then the wealthy aren't going to be buying farms (and will presumably be selling, although not sure there will be many buyers around). Probably won't impact IHT much either way as if the numbers are to be believed very few were going to be caught anyway Maybe it's a cunning plan - close the tax loophole, get the land returned to real farmers and then exempt them from IHT again............

 

[Butch Willykins]

" I’ve seen the big-eared boys on farms"

 

[Uter]

Should certainly impact agricultural land values...............if there's no longer a tax advantage then the wealthy aren't going to be buying farms (and will presumably be selling, although not sure there will be many buyers around). Probably won't impact IHT much either way as if the numbers are to be believed very few were going to be caught anyway Maybe it's a cunning plan - close the tax loophole, get the land returned to real farmers and then exempt them from IHT again............

Yeah, I guess land prices could start tumbling now.

 

[jcdenton08]

" I’ve seen the big-eared boys on farms"

You’re a big posh sod with plums in your mouth.

 

[Weststander]

Ten minutes into this from the economics/tax/inequality Professor Arun Advani from the University of Warwick (certainly no right winger) on why genuine new entrants can't go into farming. They're outgunned on price by those buying up farmland to shelter wealth. Worth a listen.

Arun Advani

warwick.ac.uk

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Good piece. He explained the two categories of; the tax avoiding wealthy who've bought huge tracts of land in recent times, versus genuine farmers who make modest profits in a low margin industry. He touched on the former should possibly have lost all reliefs, to me that should've happened.

 

[Rdodge30]

Perhaps if farmers hadn't so overwhelmingly voted to leave the EU (and thereby kiss goodbye to all their subsidies) they'd have less to worry about

Didn’t farmers actually vote exactly the same as the country? 52/48 …..

 

[ManOfSussex]

You’re a big posh sod with plums in your mouth.

You have big sheds, but nobody's allowed in. And inside these big sheds are twenty-foot-high chickens, because of all the chemicals you've put in 'em, and these chickens are scared! They don't know why they're so big! They go "Oh, why am I so massive?" And they're looking down at all the other little chickens and they think they're in an aeroplane because all the other chickens are so small.