Official Farm Income figures released show record falls, NFU

In responding to Defra's Farm Business Income (FBI) figures¹, NFU President Tom Bradshaw said: “Defra's estimated Farm Business Income figures for 2023/24, confirmed today, paint a stark picture of the challenges facing many farmers, with rising input costs, significantly lower commodity prices, a reduction in direct payments and one of the wettest winters in decades leaving many businesses worse off. For example, cereal farmers have seen their income fall by 73% and income for dairy farmers has fallen by 68% compared to 2022/23.

“When these figures were first estimated back in March 2024, we said that we needed a government that would create policies to support British agriculture and help farmers and growers to build financial resilience into their businesses. Profitable farm businesses are essential if we are to deliver what the country needs; food security, with food produced to world leading standards and environmental protection.

“Instead, we have seen the opposite. The recent Budget announcing changes to Agriculture Property Relief (APR) and Business Property Relief (BPR) have left farmers reeling. Many will be faced with a tax bill of millions. Some will be forced to sell all or part of their farm to raise the funds.

“These are the working people of our countryside, the majority of them working for little profit but happy in the knowledge their life's work will mean they can pass the farm on to the next generation. This tax threatens to change all that. It threatens our food security and with the compounded impact of National Insurance and National Living Wage changes, it threatens to push up food prices for consumers.

“There has been a clear Treasury miscalculation of the impact this will have on farmers and growers. The Treasury has simply got its figures wrong². This policy won't protect family farms, it will do the opposite.

“Treasury officials have assumed that all previous APR claims are working farms, which is not the case. Nor did these claims include those eligible for BPR. Far from protecting smaller family farms, which is what ministers say they're doing, they're protecting private houses in the country with a few acres let out for grazing while disproportionately hammering actual, food-producing farms which are, on paper, much more valuable. Even the department responsible for farm policy, Defra, has figures which show this, with the department's own data showing two thirds of farms could be affected.

“Another key question is what impact assessment has been done ahead of this policy announcement on homegrown food production? Because if farms are being broken up and sold, British food will be hit. There is a very real threat to our long-term food security because there is no incentive to invest for the future. Any available cash will now be going into pension provisions rather than investing in the infrastructure on farm to deliver food security for the next decade and beyond.

“At last year's NFU Conference, we heard from Sir Keir Starmer that ‘Losing a farm is not like losing any other business, it can't come back'. He was absolutely right. It can't. And neither can its ability to produce food for the nation.

“The pressure is building. Defra and the Treasury are aware that on 19 November, NFU members will be making their way to Westminster to take part in our mass lobby of MPs. We will be looking them in the eye and asking if they support this family farm tax, or if they will do the right thing for their farming constituents and support our call for it to be reversed.

“The only sensible course of action is for the Treasury to reverse this decision and soon.”

Notes to editors:

1. Defra's Farm Business Income figures show:

2. The Treasury has said 73% of APR claims are below £1 million and so would be unaffected by this policy. However, Defra's figures show that only 34% of farms are under £1 million net worth.

• The Treasury's figures are based on past APR claims and do not consider farms that have also claimed BPR for diversified aspects of their businesses.
• They also include a substantial number of smallholdings, with 27% of those Treasury figures being for assets under £250,000, and another 23% under £500,000.
• Very few viable farms are worth under £1 million. That could buy 50 acres and a house today. No viable food-producing business is 50 acres. The average farm in the UK is more than 250 acres.