The inheritance tax row has sent shock waves through a farming industry already reeling from the impact of spiralling input prices and record rainfall. The autumn budget also brought the prospect of fertiliser price hikes and an accelerated reduction in basic payments to farmers. But the greatest threat to future generations’ freedom to feed the nation lies in current farm policies which incentivise farmers to be less productive and less efficient. A change in mindset is urgently needed from Government to recognise and harness British agriculture’s great strengths in terms of good soils, temperate climate, professional farming sector, and world-leading science base, by encouraging farmers to produce more on a smaller footprint, so leaving more land intact for nature restoration and climate mitigation, argues Norfolk farmer David Hill.

 

Travelling back to Norfolk from the ‘family farm tax’ rally in London with a bus-load of 49 farming companions got me thinking about the future of agriculture in this country, and the direction it is currently heading.

 

In joining the protest, we wanted to register our objection to the short-sighted nature of this tax grab. There are widely varying interpretations of how much extra money the new inheritance tax rules will raise, and how many farms will be affected, but there is no doubt that it has sent shock waves through the entire industry.

 

It is a further serious blow to the confidence of a sector already on its knees after spiralling input costs, record rainfall and waterlogged fields have decimated crops and wiped out profits.

  

But the inheritance tax row is fundamentally about the future of the industry, and making sure the next generation of farmers have the freedom (and support) to produce food for the nation.

 

In this respect, as Professor Neil Ward of UEA pointed out in a recent article for The Conversation, “..paring back tax breaks pales beside the challenges and opportunities the net zero revolution will bring for farming and land management.”

 

Here is Professor Ward’s analysis of the challenge:

 

“Modernising food production practices to reduce emissions, while avoiding becoming more dependent on food imports, will require innovation and ingenuity. The last agricultural revolution of the 1940s and 1950s involved a close working partnership between the state and the farming sector. Huge advances in productivity were achieved over a couple of decades. The UK needs the same spirit of partnership and unity of purpose now if the climate challenge is to be addressed and agricultural livelihoods are to thrive.” 

 

I could not agree more. The last thing farmers need is to be brow-beaten into thinking that a sustainable future for British agriculture, and for our children and grandchildren, lies in reducing yields, taking farmland out of production, and putting at risk the many allied sectors who support our industry – from machinery dealers to seed merchants, agronomists and fertiliser suppliers.   

 

As Professor Ward suggests, we should be concerned about much more than the changes to inheritance tax rules in this Government’s current farm policies.

 

We should be worried about the impact of a £50-75 per tonne hike in the cost of fertiliser imports as a result of the new Cross Border Adjustment Mechanism (CBAM), when no equivalent tax is applied to imported food.    

 

We should be worried about the impact of accelerated cuts to delinked payments which will mean all recipients seeing 76% of their basic payments removed in 2025.    

 

But, above all, we should be worried about the short-, medium- and long-term effects of ELM and SFI policies which will make the farming industry less efficient and less productive. It is a recipe for stagnation and economic decline, not growth and wealth creation.

 

According to independent research by Savills, a decent-sized arable farm in the East Midlands will reduce output by 24% in six years’ time by optimising income from SFI options.

 

It is difficult to understand how that squares with Defra food security minister Daniel Zeichner’s insistence at the recent AIC Conference that he wants the country to produce more food.  

 

With a different mindset, there are huge opportunities out there for British agriculture, with its good soils, temperate climate, highly equipped and professional farming sector, and world-leading science base.

 

Take wheat, for example. We are exceptionally good at breeding and growing wheat in this country. In a normal year we produce roughly the same amount of wheat as Argentina, some 15 million tonnes, on around a third of the land area.

 

But there is also enormous scope for improvement. While the UK currently holds the world wheat yield record, at just under 18 tonnes per hectare, national average wheat yields have been bumping along at around 8 tonnes per hectare for the best part of 20 years.

  

A recent report from the US Council for Agricultural Science and Technology (CAST), examining the potential for US agriculture to go ‘greenhouse gas negative’, pointed to a yield gap of 50% between potential and actual US corn production as an issue of concern.

 

When the equivalent yield gap for UK wheat production is 125%, it shows just how much potential exists for productivity improvement in UK agriculture.  

 

In a world increasingly short of food, the UK should be capitalising on its advantages. For example, Reuters recently reported that Russian farmers are ditching wheat in favour of more profitable crops such as peas, lentils, or sunflowers. Such decisions will have direct implications for global wheat prices, and present potential opportunities for UK growers.

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Similarly, scientific and technological advances will open up new opportunities for the wheat crop.

 

There are recent reports of a breakthrough in hybrid wheat technology, long a holy grail for wheat breeders, which is set for commercial launch in 2027 and has the potential to increase yields by 10% using the same amount of land and resources, and by 20% in water-stressed conditions.     

 

New breeding technologies such as genome editing also offer the promise of improved yields, disease resistance and climate resilience.

 

But as Professor Ward observes, a change of mindset will be needed to safeguard agricultural livelihoods, fostering the same working partnership between the state and the farming sector which saw huge post-War advances in agricultural productivity.

 

Of course, the challenges are very different today, as biodiversity and climate objectives must be delivered alongside food production goals.

 

But just imagine the potential benefits for nature and carbon sequestration if UK national average wheat yields could be increased by 50% to 12 tonnes per hectare, so closing the UK wheat yield gap to 50%, on a par with corn in the United States.

 

At a stroke, that would release around 750,000 hectares of land for other uses. Repeat the process across other crop types and the land-sparing opportunities are immense.     

 

As Professor Tina Barsby noted in a recent commentary for SSA:

 

“UK research has shown that switching to a land sparing approach of focusing some land entirely on high-yield food production to allow more space for nature on unfarmed land would be far more cost-effective. Given the current Government’s budgetary constraints, and with such a strong commitment to food security, surely the potential of a policy approach which scientists say can deliver food production, biodiversity and climate targets at half the cost to taxpayers warrants closer examination?”

 

Britain’s farmers are food producers, first and foremost. That’s why I say we need a hand up, not a hand out.

 

We do not want to be compensated for production foregone. And we do not want to see our productive capacity dismantled, along with the essential allied industries which support it.  

 

Farmers need help from the state, in the form of independent advice, access to technology, and the incentive to be more productive and efficient.

 

That way we can produce more food for a growing population, with a reduced environmental footprint, while leaving more land for nature restoration and climate mitigation.

 

Time for a Government re-think. 

 

David Hill farms in central Norfolk growing early generation cereal seed, grass seed, oilseed rape, sugar beet and spelt wheat. The farm also operates three processing plants, adding value to its own and other farmers’ crops. David is a Nuffield Scholar and a member of the Global Farmers Network. A keen advocate of new technology in agriculture, he was one of the first farmers to host UK trials of GM sugar beet as part of the Government’s GM crop Field Scale Evaluation trials in the late 1990s.