Summary
This is the first report of our long-term, thematic inquiry into the future of farming. In our work to date, we have assessed the steps the Government has taken towards developing and delivering its vision for farming. We will continue to consider how improving the profitability of farming, fairness of relationships in the food supply chain and technology and innovation can assist the realisation of the Government’s ambitions in this sector. By taking an iterative approach to our scrutiny, we hope to help the Government bolster farming and rural communities’ contribution to food security, biodiversity, employment and the rural and national economies.
Ministers have taken responsibility for farming policy in difficult economic and geopolitical circumstances, and we welcome their strong commitments to back British produce, protect farmers in trade deals, enhance food security and improve fairness in the food supply chain. We are concerned, however, that certain high-profile policies have been announced prior to the completion and publication of the strategies and reviews that Defra says will inform and guide its vision. The Government should urgently set out its vision for the farming sector, achieving food security and the future of the Farming and Countryside Programme in its proposed 25-year Farming Roadmap, and in advance of making further significant changes to farming policy and support mechanisms. Improving the profitability of farming is a long-standing challenge that has not been addressed by successive governments. We welcome the steps this Government is taking towards tackling this challenge by launching a farming profitability review, led by former NFU President Baroness Batters.
Closing the Sustainable Farming Incentive 2024 (SFI24) without notice affected confidence in the Environmental Land Management Schemes (ELMS). This must be repaired to secure their future success. An alternative funding mechanism should be put in place to fill the gap in funding for those who missed out on the SFI24, and the Government should set out details of the next iteration of SFI as a priority.
We support the Government’s objective of reforming agricultural property relief (APR) and business property relief (BPR) to close the loophole that has encouraged wealthy investors to buy agricultural land to avoid inheritance tax. We are concerned, however, that no consultation, impact assessment or affordability assessment was conducted before the announcement of the reforms. The lack of proper evaluation of the impact of these changes means that the scale and nature of its impact on family farms, land values, tenant farmers, food security and farmers in the devolved administrations is disputed and unclear. This comes with a considerable risk of negative unintended consequences.
Alternatives to the Government’s approach have been proposed, which may achieve the same policy outcomes while protecting vulnerable farmers. We are not in a position to assess the merits of each alternative but there is sufficient time for the Government to do so.
Stakeholder concerns about the Budget’s taxation proposals have made it difficult for Government to articulate and deliver its wider vision. A pause in the implementation of the reforms would allow for better tax policy to be developed and the Government to convey a positive long-term vision. The Government should delay announcing its final APR and BPR reforms until October 2026, to come into effect in April 2027. This would also provide farmers with more time to seek appropriate professional advice.
The experience of the SFI24 closure follows a pattern within Defra of poor communication and late decision-making. As with the sudden closure of the Capital Grants scheme in November 2024, the end of SFI24 came with no specific warning, which has affected trust in the Department. Lessons must be learned from this failure of communication, and the Government should review how it communicates with the farming sector, Parliament and its arm’s-length bodies. It should properly evaluate the impact that recent communications have had on trust in the Department.
Defra should also ensure that operational and policy decisions are clearly communicated to its arm’s-length bodies and the farming advice service. It should put protocols in place to support proper and professional information sharing. Defra must also improve its communications with Parliament and ensure that statements regarding policy are made in the House and are subject to voluntary and proper scrutiny.
1 Vision and strategy for farming
The Government’s vision for farming
1. In its 2024 manifesto, the Labour Party outlined its plans to “champion British farming whilst protecting the environment”. It aimed to do so by increasing public sector procurement of food that is produced locally or to higher environmental standards, introducing a land-use framework and making “environment land management schemes work for farmers and nature”.1 Following the 2024 General Election, the Secretary of State for Environment, Food and Rural Affairs (Defra), Rt Hon Steve Reed MP, made clear that “supporting our farmers to boost Britain’s food security” is one of Defra’s five core priorities,2 and how challenging economic circumstances3 and geopolitical developments have highlighted that “food security is national security”.4
2. At the Oxford Farming Conference, the Defra Secretary stated that, “the primary purpose of farming has been - and always will be - to produce the food that feeds the nation”,5 and that “for farmers to invest confidently in measures that will make their business more resilient, you need to operate under clear and fair expectations”.6 This statement was echoed in oral evidence to the Committee.7 The Defra Secretary has also made clear that the Government will not lower food standards in trade agreements and will ensure that British farming competes on a level playing field with overseas produce,8 and we note the Government has sought to maintain these in recent trade negotiations and agreements with India and the United States.9 We endorse these objectives wholeheartedly and our scrutiny of the Department’s work is undertaken with a view to ensuring their realisation.
3. Several proposed policy outputs and reviews have been announced to support the realisation of Defra’s vision. The Secretary of State has stated that these are not separate strategies but “interlocking pieces of a jigsaw”.10 They include the following.
a. In July 2024, the Department announced an Environmental Improvement Plan (EIP) rapid review to “engage with stakeholders across environment and nature, farming, resources, waste and water sectors, working hand in glove with businesses, local authorities and civil society across the country to develop new ambitious plans to save nature”.11
b. In December 2024, the Government published an updated UK Food Security Report. It highlighted the risks to domestic production caused by a reliance on fertilisers (largely imported from abroad), the impact of extreme weather and a reduction in natural capital.12
c. In January 2025, Defra announced its plans to publish a 25-year Farming Roadmap, which “will be the most forward-looking plan for farming in our country’s history and involve government and farmers working together to identify solutions to challenges and ensure government support is in place to enable farmers to take the actions that will let their businesses succeed”.13
d. Also in January 2025, Defra launched a “national conversation” on land use, which it says is “a vital step forward, offering opportunities to move beyond tired old binary choices, between housing and greenspace or nature and food, and onto the more integrated thinking that we must embrace in meeting multiple pressing challenges all at once”.14
e. In March 2025, Defra announced its plan to develop a cross-government Food Strategy to “restore pride in British food by ensuring a food system that backs British food, grows the economy, feeds the nation, nourishes individuals, and protects the planet, now and in the future”.15
f. In April 2025, Defra announced an internal Farming Profitability Review, led by Baroness Batters, to “help inform the development of the Food Strategy, Farming Roadmap and the Land Use Framework, as well as wider government missions and priorities, including growth. This will help ensure our farming sector is more viable, self-sustaining and competitive in the long-term”.16
Policy announcements or interventions since the General Election
4. Alongside the announced strategies and reviews, the Government has made the following interventions in the sector.
a. In July 2024, the Government restated its manifesto commitment to seek a veterinary agreement with the EU to prevent unnecessary border checks and help reduce the cost of food.17
b. In August 2024, Defra announced its plans for a “New Deal for Farmers” which aims to: help British farmers share in the £5 billion spent each year on public sector catering contracts; use planning reforms to support food production; support farmers’ efforts to diversify income streams; improve fairness in the food supply chain; and protect farmers in trade deals.18
c. In September 2024, Defra announced the creation of a flood resilience taskforce to help “protect rural areas” and “improve our preparedness for, and resilience to all types of flooding affecting people, homes and businesses”.19
d. In the 2024 Autumn Budget, the Chancellor announced the early ending of the Basic Payments scheme,20 reforms to agricultural property relief (APR) and business property relief (BPR), the ending of the ringfence for devolved agriculture budgets, and changes to taxation relief on double cab pickup trucks.21
e. In October 2024, the Government announced it would set up a British Infrastructure Taskforce to bridge the gap between rural and urban areas, including improving rural broadband.22
f. In November 2024, Defra announced it would appoint a Tenant Farming Commissioner to implement the recommendations in the 2022 Rock Review.23
g. Also in November 2024, the Capital Grants Scheme was closed temporarily before being reopened in February 2025.24
h. In January 2025, Defra announced the closure of the Fruit and Vegetables Aid Scheme for producer organisations from 1 January 2026.25
i. Also in January 2025, Defra announced the Accelerating Development of Practices and Technologies (ADOPT) Fund, to “provide grant funding for farmer-led trials of innovative technology and techniques that drive sustainable food production, tackle climate change impacts, and protect nature”.26
j. In March 2025, Defra closed applications for the Sustainable Farming Incentive 2024 (SFI24).27
k. Defra’s Farming Equipment and Technology Fund (FETF) opened for applications in May 2025.28
Scrutiny of government farming policy
5. We took evidence on the Secretary of State’s vision for the farming sector on 19 November, focusing on the implications of changes to taxation announced in the Budget.29 These issues were also discussed in a private briefing from Treasury and Office for Budget Responsibility (OBR) officials on 4 December, in oral evidence from farming representatives and tax experts on 11 December,30 and by our Chair at the Liaison Committee hearing with the Prime Minister on 19 December.31 On 1 April, we took oral evidence from the Minister for Food Security and Rural Affairs and discussed the March suspension of the SFI24 and the extent to which Defra is acting upon industry concerns.32 These issues have also been raised in Committee stakeholder roundtables held on the Land Use Framework consultation (29 April) and fairness in the food supply chain (11 February). We also note debates on this topic in both Houses33 and scrutiny work by the Treasury Committee, Northern Ireland Affairs Committee and Welsh Affairs Committee.34
6. Farming stakeholders told us there have been several major changes in government policy on subsidy scheme availability, funding and taxation without them being presented with a long-term vision for the future.35 Further, we have heard that Defra’s actions have occasionally contradicted its previously stated positions or espoused aims.36 Sector representatives have argued that the perceived lack of vision from Defra has significantly affected farmer confidence about the future.37 Defra’s own data shows that “farmers on 66% of holdings are not at all confident that changes to schemes and regulations will lead to a successful future for farming”.38 The National Farmers Union’s (NFU) latest annual Farmer Confidence Survey, released in March, shows that short-term confidence has decreased by ten points, and mid-term confidence by 16 points. 32% of respondents planned to reduce investment and 65% expected a reduction in profits.39
7. Furthermore, widespread protests have taken place across the UK in reaction to the changes proposed in the Autumn Budget. On 19 November, thousands of farmers gathered on Parliament Square in London to protest the proposed changes to inheritance tax relief contained within the Autumn Budget. Subsequent national and regional protests were held on 27 November, 28 November, 30 November, 9 December, 11 December, 3 February, 10 February and 29 April. A milling wheat strike began on 1 April.40
8. On 14 January, we took evidence from the Defra Permanent Secretary and senior officials on their vision for Defra’s flagship Farming and Countryside Programme.41 We subsequently wrote to the Secretary of State outlining our concerns that “departmental officials were not sufficiently alive to the urgency of providing certainty for farmers”.42 We called on Government to publish its Farming Roadmap as a priority and to set out a coherent plan for change with details of the support available to achieve it.43 In response, the Minister for Food Security and Rural Affairs recognised the need to “provide farmers with as much clarity as possible”, and stated that a combination of the Environmental Improvement Plan, Land Use Framework and the Farming Roadmap would set out “the direction for farming and environment for the coming years”.44
Stakeholder comments
9. Commenting on Defra’s vision for the farming sector, the Nature Friendly Farming Network said, “we need clear direction from the Government on what kind of farming it wants to support and how it plans to provide the necessary backing”.45 In March, commenting on Defra’s recent announcements on the SFI24, Sustain said, “the impact of Defra’s mismanagement is severe, with SFI’s closure having wide-ranging consequences”.46 The NFU also commented that Defra is a “failing Department”47 but has welcomed Defra’s appointment of Baroness Batters to lead a farm profitability review.48
10. conclusion
Ministers have taken on responsibility for farming policy in difficult economic and geopolitical circumstances, and we welcome their strong commitments to back British produce, protect farmers in trade deals and improve fairness in the food supply chain. We welcome the increased scrutiny of farming policy in Parliament, and we are encouraged by Defra’s plans to publish a 25-year Farming Roadmap, Land Use Framework and Food Strategy. We also welcome the recently announced review into farming profitability, led by Baroness Batters. We are particularly pleased to see food security recognised as one of Defra’s core priorities, and we look forward to scrutinising the conclusions and implementation of the forthcoming profitability review.
11. conclusion
The Government has made several significant farming policy announcements or sector interventions since the election. This is an impressive list of initiatives that the Defra Secretary has recognised should be part of an ‘interlocking jigsaw’. We are concerned, however, that certain high-profile policies have been announced prior to the completion and publication of the strategies and reviews Defra says will inform and guide its vision. This has caused considerable confusion and concern amongst farmers and agricultural business, the scale of these concerns being apparent in nationwide protests. In the absence of a vision and strategy, we have heard that Defra’s policy announcements appear disjointed and without consideration of their wider impact and potential implications.
12. conclusion
Farms are professional businesses and remain adaptable to change, but they must plan for changes well in advance with confidence about the future environment they will be operating in. We have concerns that the Department has not yet demonstrated that it is sufficiently alive to the urgency of setting out a clear direction for the sector nor has it fully considered or calculated the impact of recent policy decisions on morale, confidence and rural mental health. A clearer exposition of the Government’s vision and credible plans for implementation should be presented by Ministers and senior officials.
13. recommendation
The Government should urgently set out its vision for the farming sector, achieving food security and the future of the Farming and Countryside Programme in its proposed 25-year Farming Roadmap, and in advance of making significant major changes to farming policy and support mechanisms. The 25-year Farming Roadmap should bring together Defra farming policy and programmes into a single vision outlining how they will work together to achieve measurable outcomes for food security and the environment. This vision should set out a coherent and signposted plan for change and details of the risks posed and support available.
2 Farm funding and profitability
Overall farming budget
14. In its July 2024 report on the Farming and Countryside Programme, the National Audit Office (NAO) found that Defra had not met its commitment to maintain the level of funding for the farming sector at £2.4 billion each year between 2020/21 and 2024/25. Defra expects to spend £2.9 billion in 2024–25 to meet the Government’s revised commitment to spend £12 billion between 2020 and 2025 on the Farming and Countryside Programme. However, the effect of inflation has reduced the real terms value of government support by 12% between 2020–21 and 2022–23. While Defra has increased payment rates for individual [subsidy] actions to reflect inflation, the overall level of funding has not increased, meaning it will deliver less than originally expected for the funding available.49
15. The Agriculture and Horticulture Development Board (AHDB) has also noted that the funding pot for agriculture has “remained constant at £2.4 billion since the 2019–2024 parliament. During this time, inflation has led to a 44% increase in farm costs, while the agriculture budget remains the same”.50 The Country Land and Business Association (CLA) noted that the amount allocated in the Autumn 2024 Budget amounted to a “cut in real terms”.51
16. Following the recommendations made in the Bew Review,52 Northern Ireland, Scotland and Wales received ring-fenced, multi-annual funding settlements for agriculture and rural development. The Bew Review considered the unique agricultural circumstances of each nation of the UK. However, in the Autumn Budget the UK Government announced that from 2026/27 the Barnett formula will apply to agriculture funding.53 Since the devolved block grants will no longer be ringfenced, agriculture will compete with public services such as healthcare and education, with decisions on the allocation of funding made by the devolved administrations. NFU Scotland disagrees with the Government’s decision to use the Barnett Formula as the baseline for agricultural funding. It said: “The change to the current 17% ring-fenced funding is a major risk for Scottish agriculture” and “we are concerned with the UK Government’s decision to have made these significant changes without any consultation or consideration as to the potential impact on Scotland’s rural communities”.54
Environmental Land Management Schemes (ELMS)
17. The agricultural sector is experiencing a period of significant change as it transitions away from the legacy payments regime towards nation-specific farming schemes. Government policy for many years has encouraged reliance on farming payments: previously for direct support on an acreage basis and since 2021 for delivering on environmental outcomes through the Environmental Land Management Schemes (ELMS).55
18. We have heard that ELMS has followed an iterative design process, making it hard for farmers to plan and keep up to date with changes,56 and that those who can access formal advice are at an advantage compared to those who cannot.57 In 2022, the then Shadow Defra Secretary and current Minister for Food Security and Rural Affairs, Daniel Zeichner MP, criticised the previous Government’s approach to the Sustainable Farming Incentive (SFI) and blamed its low take up on farmers having no guarantee that “the goal posts won’t be moved again and support undermined”.58 The Nature Friendly Farming Network said that the majority of ELMS funding has been directed towards the schemes with the lowest ambitions for nature, sometimes placing minimal demands on farmers.59 The previous Committee’s soil health report found that if the then Government was to achieve its ambitions for nature recovery, ELMS must be underpinned by sufficient, long-term and secure funding to realise its full potential.60 In the NAO’s July 2024 report, it found that Defra previously lacked some of the data it needed to make timely decisions about Programme design changes, which increased the risk of unintended consequences.61
19. On 11 March, Defra announced the suspension of applications for SFI24 until after the Spending Review in June, when it will be announcing details of a revised a SFI scheme “building on lessons learned and stakeholder feedback”.62 It said that the SFI24 budget had been “successfully allocated”.63 In a press notice on 11 March Defra stated that any future scheme would be “better thought out” and would be “properly capped”.64 The Minister told us in April that further information on the next iteration would be released in July, but was unable to say when the next options would open for applications or what those schemes may look like.65 Martin Lines, CEO of the Nature Friendly Farming Network, said the gap before a new SFI scheme is in place would leave some farmers “in a really difficult financial position”.66 We have heard that many in the sector had already made significant investments and sought advice only for the scheme available to them to be withdrawn without notice and no guarantee of a replacement.67 We were told that farmers were concerned about their future and worried about their eligibility for future schemes.68
Improving profitability
20. Defra’s November 2024 Farm Business Survey found that in the financial year 2023/24 average Farm Business Income was lower for all farm types except for specialist pig farms and specialist poultry farms.69 This included incomes falling 73% for cereal farms, 24% for general cropping farms, 68% for dairy farms, around 25% for lowland grazing livestock farms and 12% on Less Favoured Areas higher grazing farms. We have also heard concerning evidence that 12,000 farms have closed in the last decade.70
21. We and our predecessor Committee have considered at length the issues around fairness, profit allocation and risk sharing in the food supply chain. Evidence submitted has noted the negative impact of price volatility on specific sectors and the role of retailers and processors in perpetuating inequalities. We also note concerns, shared by the Government, about the share of overall profits received by farmers for their goods, with some evidence showing that farmers often receive less than 1% of the overall profit made on products and so become over reliant on government support. Bolstering the role and effectiveness of the Groceries Code Adjudicator, and its collaboration with the Agricultural Supply Chain Adjudicator, will be pivotal in this effort.71 Farmers point to many problems in the market which are out of their control, for example import standards and challenges with securing profitable agreements with supermarkets.72 In evidence on 19 November, the Defra Secretary outlined his shared concerns about the profitability of farm businesses, and has since appointed former NFU President Baroness Minette Batters to lead an internal Farm Profitability Review, due to report in October.73
22. On 1 April, the Minister for Food Security and Rural Affairs informed us that the future of the sector depended on businesses running in a “business-like way”, turning a profit on the goods that they produce and that government support will be focused on “environmental goods”.74 At the Oxford Farming Conference, however, the Secretary of State said, “to make sure you can keep producing the food we need, you must be able to profit from other activities.”75 We discussed sector concerns that Defra could be encouraging diversification on one hand but penalising those who do so on the other.76
Viability
23. In its July 2024 report on the Farming and Countryside Programme, the NAO found, “More than a third of farm businesses covered by Defra’s modelling are likely to need to make productivity improvements to maintain viability after 2028, given the reductions in direct payments”.77 It also found that “Defra assumes farmers will become more productive as direct payments are phased out, but recognises this is uncertain”.78
24. We raised concerns around farm viability with senior officials on 24 January.79 Emily Miles, Director General for Food, Biosecurity and Trade, told us that Defra modelling found that 92% of farms had an opportunity for productivity improvement, one in nine farms would need to make productivity gains of 10% to remain viable after the agricultural transition, and stated, “If they are not going to be viable obviously the market will act and do its thing. I do not think we can expect that every single farm will be viable”.80 This raised understandable concerns that certain farms were expected to fail which, though later clarified,81 added to the perception that those businesses had not been effectively identified or provided with the necessary advice or support to survive.82 Defra officials pointed to the Farm Resilience Fund,83 which has since closed, and the Minister for Food Security and Rural Affairs’ chairing of the first Uplands Task and Finish Group,84 as steps being taken to counter these concerns.
25. The NAO has found that, “Many farmers are not confident in their future in farming”.85 Defra’s most recent farmer opinion tracker (October 2023) showed that nearly half (48%) of farmers were not at all positive about their future in farming”86 and that the Department’s iterative approach to ELMS allows improvement over time but “is creating widespread uncertainty and risks for the sector”.87 The NAO found that farmers’ ratings of their experience of SFI have steadily improved since the pilot but Defra has not succeeded in building their confidence in its overall ability to deliver change.88
26. conclusion
Farmers and the rural community are fundamental to delivering the Government’s plan for change. They provide high quality, nutritious food, deliver environmental goods and maintain landscapes for us all to enjoy. The Government has an exciting opportunity to shape the future of farming as we transition from legacy payments, and we agree that productivity gains will be a positive step towards self-sufficient farming businesses. Productivity grants, accessible and affordable advice and improving fairness in the food supply chain will be the key drivers to achieve this. We note positively that Baroness Batters has been appointed by Defra to lead a Farm Profitability Review.
27. conclusion
A transparent policy on the direction of the Environmental Land Management Schemes (ELMS) and other subsidy arrangements is crucial. If the Government is serious about improving ELMS outcomes it must consult with stakeholders and communicate its plan clearly. Confidence in the schemes must be urgently repaired to secure their future success. Closing the Sustainable Farming Incentive 2024 (SFI24) without notice has affected trust in the Government and has left many farmers without the funding they expected and at risk of becoming unviable in the period before the next scheme is introduced.
28. recommendation
An alternative funding mechanism should be put in place to fill the gap in funding for those who missed out on the SFI24, no later than September 2025.
29. recommendation
The Government should set out what the next iteration of SFI will look like and the date it will be open for applications in the response to this report. It must also state how it intends to increase farm profitability, using a sector-by-sector approach, no later than October 2025.
3 Taxation, consultation and evaluation
Inheritance tax reliefs for agricultural businesses
30. Agricultural property relief (APR) and business property relief (BPR) are types of inheritance tax (IHT) relief that reduce the amount of tax that farmers and landowners must pay when farmland and farm-related business assets, such as machinery and livestock, are inherited.89 The aim of both reliefs is to protect family-owned businesses and agricultural property. In practice, however, certain business investments are exempted from inheritance tax even if the investor has no direct connection to the farming business, and agricultural relief can be available to owners of agricultural property even if they have never farmed the land. A 2024 Centre for the Analysis of Taxation (CenTax) report found that from 2018 to 2020, almost two thirds (64%) of all APR went to around 200 estates per year. Each of these estates claimed more than £1 million in relief, with an average estate value of £6 million, and that APR is particularly important in reducing the tax contribution of estates valued at more than £5 million.90
31. Some evidence to the Committee argued that it is difficult to see agricultural and business reliefs as the best means to protect small, family farms given the wealth sheltered by the reliefs is not limited.91 David Sturrock of the Institute for Fiscal Studies (IFS) and Dr Arun Advani, Director of CenTax, argued that it could be fairer, more efficient and more appropriate to explicitly target support towards farming businesses and active farmers undertaking the activities that the Government wishes to support, be that food production or environmental goals.92 Professor Richard Murphy, Director at Tax Research LLP, has also said that the reliefs were contributing to increasing inequality in the UK by being primarily available to the wealthy.93
Reforms to agriculture and business property reliefs
32. In the October Budget, the Chancellor announced changes to the treatment of agricultural and business assets for inheritance tax purposes.94 In evidence to the Committee on 19 November, the Defra Secretary explained that the Government had chosen to make changes to inheritance tax reliefs for farmers due to the economic circumstances it encountered when taking office, and in order to close a loophole for avoiding inheritance tax.95 He has also argued that the “vast majority of farmers would not be affected”, that “only the richest estates will be asked to pay”,96 and that the reforms would help put “downward pressure on the price of land”.97 The Defra Secretary also noted that farmers will likely take tax advice to reduce their liabilities further.98 The Committee has heard from farming representatives, tax experts, the Minister for Food Security and Rural Affairs and stakeholders at engagement events about the potential implications of the proposed changes for the farming sector and wider rural communities.99
Debate over potential impact of changes
33. There has been considerable debate around the number of farms, farmers, estates and businesses that will be affected by the change, and the scale of any impact, not least due to differing definitions of each group and varying data being employed to assess impact.100 In its assessment of the proposal, the Treasury has said that the majority of APR and BPR claims will be unaffected, and that from 2026–27 around 500 estates claiming APR will be affected annually. The National Farmers Union (NFU), citing Defra figures, has argued that around two thirds of farms are worth over £1 million and are therefore potentially affected,101 and that the figures the Treasury is using do not accurately reflect the impact of these changes on rural communities.102
34. The IFS said the number of farms likely to be affected by the changes to APR and BPR can differ depending on the data used; HMRC data relates to the number of taxpaying estates, and data from other organisations assessing the potential of impact of the change relates to farms and farming businesses. The IFS said “one estate could include only a share of a farm and/or could include multiple farms” and that the “proportions being cited could differ without this implying that either is incorrect”. Reasons for this could be that the Government figures based on inheritance tax returns reported to HMRC relate to all estates claiming agricultural relief, while the Defra figures from the Farm Business Survey relate to farms with at least a minimum level of output. A second reason for differences is that one estate could include only a share of a farm and/or could include multiple farms. A third reason is that some farms will be gifted well before death and therefore not attract inheritance tax.103 Dr Arun Avani said that two approaches that have been taken, one of which has focused on affected estates while the other has focused on affected farms.104
35. Additionally, there is debate over how to define the term “affected”, with evidence making the case that that people who would have to intervene in their tax planning to avoid a tax charge should count as “affected” by the changes to APR and BPR. Legal and tax experts have noted that farmers will now need to have sensitive conversations about succession,105 estate planning and Alternative Investment Market (AIM) shares,106 and requirements on wills.107 Consideration will also have to be given to previous “Balfour structuring” for estates, where BPR has previously been used to “fill the gaps” not covered by APR,108 and we heard that engaging a combination of land agents, accountants and solicitors could cost farmers thousands of pounds.109
Impact on mental health
36. We heard evidence that the Government’s disregard of more vulnerable farming groups is fuelling low confidence and morale levels in the agricultural and wider rural community,110 and how Defra policy is negatively affecting rural mental health, investment and business confidence.111 A March 2025 Farmers Guardian survey of over 300 farmers from across the UK found that before the Autumn Budget 70% felt optimistic about the future of their rural businesses, but that number fell to 12% after the Budget. It also said that 84% of farmers sampled feel that their mental health has been affected by Autumn Budget with farmers citing the SFI closure and changes to inheritance tax as the common areas creating concern.112
37. Concerns were raised that the lack of consultation on and impact assessments for the proposed changes could result in unintended consequences.113 For example, 40% of farmers are over 65, 2% are under 35, and the average age of a farmer is 59.114 We heard that for the last 30 years the best advice has been to retain the farm until death,115 with the IFS highlighting that “those passing away in the next seven years (but after the new regime comes into force in April 2026) will not have had the opportunity to avoid inheritance tax by making lifetime gifts”.116 The NFU President, Tom Bradshaw, detailed how older or unwell farmers are highly concerned that their farm may be broken up upon their death and the concerning steps they may take to avoid that eventuality.117
Impact on tenant farmers
38. The Tenant Farmers Association has raised concerns that its members could also be affected indirectly if large estates sell land to pay inheritance tax bills, and that a “kneejerk reaction” might see tenants “unseated from their farms.”118 Variations in Agricultural Holdings Act (AHA) and Farm Business Tenancies (FBT) and APR/BPR applicability may complicate this situation further.119 Several proposals have been put forward to reduce the potential negative impacts on the sector.120 In addition, we heard that taking forward all the recommendations of the Rock Review–including on an exemption on APR for landlords offering longer-term tenancies of over eight years–could reduce the problem of land being taken back in hand.121
Impact on land prices
39. Concerns have also been raised that land prices for farmers have been inflated due to the IHT benefits for investors, and therefore farmers now own land that is overvalued in relation to the financial benefits it can bring when used primarily for farming purposes.122 The IFS has noted that in some cases a farm will yield too little income (and the inheritor have too few resources) to pay the tax, leading to farm being sold in part or in full. While this is a feature of inheritance tax more generally, there are several reasons why a farm that yields little income might have a high enough market value to attract inheritance tax. These include the IHT planning by non-farmers increasing the land value, the land having a high market value for other uses such as housing, the land already being used as productively as allowed, and high market values reflecting the speculative hope that planning permission might be granted in future for more profitable uses.123 The Office for Budget Responsibility (OBR) and others, however, argued that the changes will likely have a neutral impact on land values.124
Impact on farming in Scotland, Wales and Northern Ireland
40. We also heard and received evidence on the geographic variation of the potential impact of the IHT reform.
a. Scottish Land and Estates said that the changes to inheritance tax will place a “significant and unexpected” tax burden on thousands of farms in Scotland.125 The NFU Scotland President, Martin Kennedy, noted the unique position of Scottish Farmers, in particular crofters.126
b. In evidence submitted to the House of Commons Welsh Affairs Committee, NFU Cymru raised specific concerns for Welsh Tenant Farmers, including that around two thirds of working farmers rent some or all of their land and any displacement of Welsh farmer and rural communities affecting those areas as “strongholds of Welsh language and culture, with 43% of those involved in the sector speaking Welsh as opposed to 19% of Wales’ wider population”.127
c. The Ulster Farmers Union’s parliamentary officer, Alexander Kinnear, told the Northern Ireland Assembly’s Agriculture, Environment and Rural Affairs Committee that he believed that the Government was basing its arguments on English farming and figures for farms affected in Northern Ireland “in terms of most likely sole ownership of land and farms but also the price per acre, which is much higher than the rest of the United Kingdom.”128
d. The changes announced in the Budget also have serious implications for the future of farming budgets in Scotland, Wales and Northern Ireland. In particular, the removal of the ringfence around agricultural spending.
Policy outcomes
41. The IFS has stated the changes “reduce but do not eliminate” the concerns raised about IHT.129 Dan Neidle of Tax Policy Associates has suggested that one third of the farm estates affected by the Budget changes are not owned by farmers but are held by investors for tax planning purposes. As such, he suggests the Budget proposal doesn’t go far enough to stop avoidance but goes too far in how it applies to actual farms.130 Jeremy Moody of the Central Association for Agricultural Valuers (CAAV), told us the policy “hits the people it is supposed to protect and protects those it is supposed to hit, which is awkward”,131 and that a “major” gap in the Government’s data was to overlook the variety of relief claims made solely under BPR.132
42. Following the announcement of the proposed taxation changes, a study of more than 4,000 businesses and farms from across the UK by Family Business UK and CBI Economics found that more than half (55%) of family-owned businesses and just below half (49%) of family farms have paused or cancelled planned investments since the Budget and will continue to cut both investment and jobs before April 2026. Further, it noted that more than one in ten family businesses (12%) say they plan to sell their business entirely to fund the tax increase and 9% say they have already done so. 23% had paused recruitment or cut jobs with a further 23% planning to do so, which the researchers found could result in more than 208,000 job losses.133
43. We questioned the Defra Secretary and stakeholders about the level of the APR/BPR relief threshold set out in the Budget.134 Dr Arun Advani noted that the changed arrangements still leave a “roughly 20% effective rate above the threshold that has been set”, which is remains much more attractive than other assets, particularly given that Budget changes which bring “pensions and former non-doms into inheritance tax” might actually “drive up the amount of demand for agricultural land that is still relatively tax-privileged”.135
Alternative proposals
44. Stakeholders and commentators have proposed several potential alternative ways of achieving the Government’s goals whilst reducing the impact on family farms, which include but are not limited to the following.
a. Increasing the tax-free APR/BPR combined cap to £20m, but with a ‘clawback period’ in which any land sold after being passed on, tapering to avoid a cliff edge if the property is sold.136
b. Allowing lifetime transfers (PETS) of qualifying agricultural or business property, usually set at seven years, to be immediately exempt for a short period to allow elderly owners to reorganise their estates, before coming back into force.137
c. Retaining the full IHT relief but removing the capital gains uplift on death. If the assets are sold, the tax is captured at 24% on the total gain rather than an effective 20% on the full value.138
d. Maintaining but significantly curtailing existing reliefs, to “[maintain] the publicly supported goal of helping genuine small family-owned businesses and farms”.139
45. In evidence to the Committee in November, it was highlighted that all farming industry stakeholders present had:
written to the Prime Minister asking for a pause and a consultation. This is such a complicated area. There are many ways of making the policy less bad, but a full consultation will hopefully arrive at the right solution, rather than a less bad solution.140
46. conclusion
We support the Government’s objective of reforming Agricultural Property Relief (APR) and Business Property Relief (BPR) to close the loophole that encourages wealthy investors to buy agricultural land to avoid inheritance tax. We recognise longstanding concerns that these reliefs are being used by individuals to shelter wealth and are affecting the price and availability of land for new entrants.
47. conclusion
We are concerned, however, that no consultation, impact assessment, or affordability assessment was conducted before the announcement of the reforms. The lack of proper evaluation of the impact of these changes means that the scale and nature of its impact on family farms, land values, tenant farmers, food security and farmers in the devolved administrations is disputed and unclear and comes with a considerable risk of negative unintended consequences. As such, the reforms threaten to affect the most vulnerable, including those who are older or are farming less profitable or tenanted holdings. The real concerns of farmers are demonstrated in recent data on farmer confidence and mental health.
48. conclusion
Several alternatives to achieve the same goals, or mitigations to protect vulnerable farmers, have been proposed. We are not in a position to assess the merits of each and propose an alternative, but there is sufficient time between now and the 2026 Finance Bill for Government to consult on the proposals to fulfil the Government’s intention to “protect the family farm” while better enabling the Government to meet its fiscal objectives and close the tax loophole.
49. conclusion
Stakeholder concerns around the Budget’s taxation proposals have made it difficult for the Government to articulate and deliver its wider vision for agriculture. It has also strained the relationships with those who will be responsible for helping to deliver that vision. A pause in the implementation of taxation reforms would allow for better formulation of tax policy and provide the Government with an opportunity to convey a positive long-term vision for farming.
50. recommendation
The Government should delay announcing its final APR and BPR reforms until October 2026, to come into effect in April 2027, to provide more time for farming businesses to conduct succession planning and seek appropriate professional advice. The Government should use this time to consult on its proposed changes, conduct an impact and affordability assessment, and consider policy measures and mitigations to reduce any unintended negative consequences. This consultation and assessment must consider the best means to:
a. Prevent APR and BPR being used to avoid inheritance tax while allowing farms to be passed between generations intact.
b. Protect the most vulnerable, including those with less access to financial and legal advice those who will pass away within the next seven years.
c. Prevent negative impacts on tenant farmers.
d. Ensure food security is not threatened but enhanced.
e. Ensure its policies reflect specific challenges or circumstances in the devolved administrations, given variations in farming structures, land prices, economic conditions and legal systems.
The Government should also publish its evaluation of and rationale for following or not following alternative policy measures presented by stakeholders such as the Institute for Fiscal Studies and the National Farmers Union.
4 Communication and consultation
51. The National Audit Office’s (NAO) 2024 report on the Farming and Countryside Programme highlighted the importance of trust, communication and transparency between Defra and its agricultural stakeholders, and notes positively some of the changes being brought in and that things are improving.141 When discussing Defra’s plans to develop a 25-year Farming Roadmap, the Secretary of State said it would be “farmer-led, so they can tell government what they need to make a success of this vital transition”.142 The Defra Secretary also noted the benefits of co-production and consultation for the Land Use Framework.143 On 29 April, we hosted a stakeholder event on the Land Use Framework where participants noted positively the engagement from the Department.
Communication
52. We have noted in evidence concerns about the way in which Government has communicated with farming communities, notably around the use of tax planning,144 improving profitability in the sector,145 the closure of schemes without notice,146 discounting of sector concerns around the impact of changing government policies on their businesses,147 and suggestions that farms should diversify into certain niche products to improve profitability.148
Capital Grants scheme
53. In November 2024, the Capital Grants scheme was closed without notice due to high uptake.149 In November we questioned Defra officials on the closure of the scheme, which was paused due to high uptake in November 2024, who stated the pause was enacted “overnight” to avoid a “closing-down sale” following rumours that the Rural Payments Agency (RPA) was not responding to queries following “overwhelming demand”.150 Some stakeholders argued that the sudden nature of the closure contravened Defra guidelines, and that some farmers may have already paid for other changes that were reliant on a future grant and that having the capital grants scheme closed at certain times of year would mean that windows to act were lost.151 Defra’s admission came with an acceptance that it learn how to handle a similar situation “better in future”.152 Defra reopened applications on 25 April, issuing a statement that it had secured sufficient funding to continue and could process the 4,040 completed Capital Grants applications that were on hold.153
Closure of the SFI scheme
54. In our session with the Minister for Food Security and Rural Affairs on 1 April, however, we noted similar circumstances around the closing of the Sustainable Farming Incentive (SFI).154 This was despite an acknowledgment from officials in January that the SFI budget was under pressure and that they would need to “keep a close eye on it”.155 The NFU expressed concerns that the announcement to close SFI was made without warning or consultation, despite the RPA website stating that applicants would receive six weeks’ notice. NFU President, Tom Bradshaw, said the closure “slammed shut” the door for funding for “thousands of farmers”, and that the closure was “delivered yet again with no warning, no understanding of the industry and a complete lack of compassion or care”.156 We raised examples of the financial impact of the withdrawal with the Minister for Food Security and Rural Affairs, including a farmer who had missed out on submitting their claim by 40 hours after months of preparation and had lost out on at least £80,000 of funding.”157 The Nature Friendly Farming Network also criticised the “abrupt closure”,158 and Tom Lancaster, Head of Land, Food and Farming at the Energy and Climate Intelligence Unit, stated that “A lot of farmers will see this as a breach of trust”.159 On 12 May 2025 the Government announced that it would allow applications to be made to the SFI24 scheme by those who had started an application within 2 months of 11 March 2025, but who had not submitted the application by that date. Restrictions apply which were not contained within the previous SFI24 iteration. It said that there are approximately 3,000 applications in this category.160
55. The Minister for Food Security and Rural Affairs highlighted that previous iterations of SFI had experienced limited take up.161 Officials said that the decision not to honour the six weeks’ closure notice set out on the RPA website was “a choice we made about how to ensure the maximum number of applicants could get fair access to the scheme. The choice that Ministers took was to continue allowing people to apply naturally and close it when the funding had been exhausted”.162 Officials noted this “was not without precedent”, having happened “at least twice” in recent years.163
56. It was also noted, however, that the closure was a result of rumours circulating about closure164 and Government acknowledged it had not been closed in the way it would have liked.165 Concerns were raised that individuals most in needs of the funds “do not have access to consultants to give them the best chance of getting an application forward”,166 and that lessons had not been learned from the closure of the capital grants scheme in November.167
Consultation and engagement
57. In relation to changed taxation arrangements, we heard that there had been limited engagement about any potential changes to inheritance tax (IHT) reliefs in advance of their taking place in the period preceding the Budget, and low quality engagement in the period after.168 The plans were initially rumoured following leaks about the potential policy change ahead of the Budget, causing over 3,000 NFU members to write to MPs,169 and further inconsistencies in messaging include the rationale changing taxation arrangements to raise money for the exchequer, and then advising farmers to seek legal advice to avoid it.170 Stakeholders have also told us that Defra’s communication has, including with its own arm’s-length bodies, been poor and has affected confidence in and support for the Department.171 They said that this appears to be a reoccurring issue rather than a one-off event.172
58. Changes to IHT, SFI24 and Capital Grants applications were rumoured, reported on or announced prior to a Defra written or oral parliamentary statement. For example, no statement was made on the SFI24 closure until prompted by urgent requests from Members. This echoes similar concerns raised in a hearing with the Defra Secretary by the Environmental Audit Committee (EAC) Chair. In a hearing of that Committee, Toby Perkins MP stated that Defra was showing a ‘pattern’ of poor parliamentary engagement.173
59. conclusion
The experience of the Sustainable Farming Incentive 2024 (SFI24) closure follows a pattern within Defra of poor communication and last-minute decision-making following rumours and Departmental leaks. As with the sudden closure of the Capital Grants scheme in November 2024, the end of SFI24 came with no specific warning, despite the six weeks’ notice indicated in the Rural Payments Agency (RPA) guidance. This has been perceived by the sector as a breach of trust, leaving many questioning future statements and businesses facing significant funding shortfalls. Lessons must be learned from this failure of communication; a restoration of trust is urgently required. It is essential that Defra focuses on rebuilding that trust through good-faith communications with the sector.
60. conclusion
We are thankful to the Secretary of State, Ministers and Officials for engaging with our Committee, but we urge Defra to improve its communication with Parliament and be proactive and transparent in its communications. Similarly, communications between Defra and its arm’s-length bodies are lacking and must be improved.
61. recommendation
The Government should review how it communicates with the farming sector and properly evaluate the impact recent communications have had on trust in the Department. It should provide its analysis and proposed solutions in its response to this report.
62. recommendation
Defra should ensure that operational and policy decisions are clearly communicated to its arm’s-length bodies and the farming advice service in advance of them being made public. It should investigate the causes of the leaks of its proposed changes to the Capital Grants and SFI schemes and put protocols in place to support proper and professional information sharing. Details revised protocols should be set out in the response to this report.
63. recommendation
Defra must improve its communications with Parliament and ensure that statements regarding policy are made in the House and subject to voluntary and proper scrutiny. Defra should affirm its commitment to doing so in its response to this report.
Conclusions and recommendations
Vision and strategy for farming
1. Ministers have taken on responsibility for farming policy in difficult economic and geopolitical circumstances, and we welcome their strong commitments to back British produce, protect farmers in trade deals and improve fairness in the food supply chain. We welcome the increased scrutiny of farming policy in Parliament, and we are encouraged by Defra’s plans to publish a 25-year Farming Roadmap, Land Use Framework and Food Strategy. We also welcome the recently announced review into farming profitability, led by Baroness Batters. We are particularly pleased to see food security recognised as one of Defra’s core priorities, and we look forward to scrutinising the conclusions and implementation of the forthcoming profitability review. (Conclusion, Paragraph 10)
2. The Government has made several significant farming policy announcements or sector interventions since the election. This is an impressive list of initiatives that the Defra Secretary has recognised should be part of an ‘interlocking jigsaw’. We are concerned, however, that certain high-profile policies have been announced prior to the completion and publication of the strategies and reviews Defra says will inform and guide its vision. This has caused considerable confusion and concern amongst farmers and agricultural business, the scale of these concerns being apparent in nationwide protests. In the absence of a vision and strategy, we have heard that Defra’s policy announcements appear disjointed and without consideration of their wider impact and potential implications. (Conclusion, Paragraph 11)
3. Farms are professional businesses and remain adaptable to change, but they must plan for changes well in advance with confidence about the future environment they will be operating in. We have concerns that the Department has not yet demonstrated that it is sufficiently alive to the urgency of setting out a clear direction for the sector nor has it fully considered or calculated the impact of recent policy decisions on morale, confidence and rural mental health. A clearer exposition of the Government’s vision and credible plans for implementation should be presented by Ministers and senior officials. (Conclusion, Paragraph 12)
4. The Government should urgently set out its vision for the farming sector, achieving food security and the future of the Farming and Countryside Programme in its proposed 25-year Farming Roadmap, and in advance of making significant major changes to farming policy and support mechanisms. The 25-year Farming Roadmap should bring together Defra farming policy and programmes into a single vision outlining how they will work together to achieve measurable outcomes for food security and the environment. This vision should set out a coherent and signposted plan for change and details of the risks posed and support available. (Recommendation, Paragraph 13)
Farm funding and profitability
5. Farmers and the rural community are fundamental to delivering the Government’s plan for change. They provide high quality, nutritious food, deliver environmental goods and maintain landscapes for us all to enjoy. The Government has an exciting opportunity to shape the future of farming as we transition from legacy payments, and we agree that productivity gains will be a positive step towards self-sufficient farming businesses. Productivity grants, accessible and affordable advice and improving fairness in the food supply chain will be the key drivers to achieve this. We note positively that Baroness Batters has been appointed by Defra to lead a Farm Profitability Review. (Conclusion, Paragraph 26)
6. A transparent policy on the direction of the Environmental Land Management Schemes (ELMS) and other subsidy arrangements is crucial. If the Government is serious about improving ELMS outcomes it must consult with stakeholders and communicate its plan clearly. Confidence in the schemes must be urgently repaired to secure their future success. Closing the Sustainable Farming Incentive 2024 (SFI24) without notice has affected trust in the Government and has left many farmers without the funding they expected and at risk of becoming unviable in the period before the next scheme is introduced. (Conclusion, Paragraph 27)
7. An alternative funding mechanism should be put in place to fill the gap in funding for those who missed out on the SFI24, no later than September 2025. (Recommendation, Paragraph 28)
8. The Government should set out what the next iteration of SFI will look like and the date it will be open for applications in the response to this report. It must also state how it intends to increase farm profitability, using a sector-by-sector approach, no later than October 2025. (Recommendation, Paragraph 29)
Taxation, consultation and evaluation
9. We support the Government’s objective of reforming Agricultural Property Relief (APR) and Business Property Relief (BPR) to close the loophole that encourages wealthy investors to buy agricultural land to avoid inheritance tax. We recognise longstanding concerns that these reliefs are being used by individuals to shelter wealth and are affecting the price and availability of land for new entrants. (Conclusion, Paragraph 46)
10. We are concerned, however, that no consultation, impact assessment, or affordability assessment was conducted before the announcement of the reforms. The lack of proper evaluation of the impact of these changes means that the scale and nature of its impact on family farms, land values, tenant farmers, food security and farmers in the devolved administrations is disputed and unclear and comes with a considerable risk of negative unintended consequences. As such, the reforms threaten to affect the most vulnerable, including those who are older or are farming less profitable or tenanted holdings. The real concerns of farmers are demonstrated in recent data on farmer confidence and mental health. (Conclusion, Paragraph 47)
11. Several alternatives to achieve the same goals, or mitigations to protect vulnerable farmers, have been proposed. We are not in a position to assess the merits of each and propose an alternative, but there is sufficient time between now and the 2026 Finance Bill for Government to consult on the proposals to fulfil the Government’s intention to “protect the family farm” while better enabling the Government to meet its fiscal objectives and close the tax loophole. (Conclusion, Paragraph 48)
12. Stakeholder concerns around the Budget’s taxation proposals have made it difficult for the Government to articulate and deliver its wider vision for agriculture. It has also strained the relationships with those who will be responsible for helping to deliver that vision. A pause in the implementation of taxation reforms would allow for better formulation of tax policy and provide the Government with an opportunity to convey a positive long-term vision for farming. (Conclusion, Paragraph 49)
13. The Government should delay announcing its final APR and BPR reforms until October 2026, to come into effect in April 2027, to provide more time for farming businesses to conduct succession planning and seek appropriate professional advice. The Government should use this time to consult on its proposed changes, conduct an impact and affordability assessment, and consider policy measures and mitigations to reduce any unintended negative consequences. This consultation and assessment must consider the best means to:
a. Prevent APR and BPR being used to avoid inheritance tax while allowing farms to be passed between generations intact.
b. Protect the most vulnerable, including those with less access to financial and legal advice those who will pass away within the next seven years.
c. Prevent negative impacts on tenant farmers.
d. Ensure food security is not threatened but enhanced.
e. Ensure its policies reflect specific challenges or circumstances in the devolved administrations, given variations in farming structures, land prices, economic conditions and legal systems.
The Government should also publish its evaluation of and rationale for following or not following alternative policy measures presented by stakeholders such as the Institute for Fiscal Studies and the National Farmers Union. (Recommendation, Paragraph 50)
Communication and consultation
14. The experience of the Sustainable Farming Incentive 2024 (SFI24) closure follows a pattern within Defra of poor communication and last-minute decision-making following rumours and Departmental leaks. As with the sudden closure of the Capital Grants scheme in November 2024, the end of SFI24 came with no specific warning, despite the six weeks’ notice indicated in the Rural Payments Agency (RPA) guidance. This has been perceived by the sector as a breach of trust, leaving many questioning future statements and businesses facing significant funding shortfalls. Lessons must be learned from this failure of communication; a restoration of trust is urgently required. It is essential that Defra focuses on rebuilding that trust through good-faith communications with the sector. (Conclusion, Paragraph 59)
15. We are thankful to the Secretary of State, Ministers and Officials for engaging with our Committee, but we urge Defra to improve its communication with Parliament and be proactive and transparent in its communications. Similarly, communications between Defra and its arm’s-length bodies are lacking and must be improved. (Conclusion, Paragraph 60)
16. The Government should review how it communicates with the farming sector and properly evaluate the impact recent communications have had on trust in the Department. It should provide its analysis and proposed solutions in its response to this report. (Recommendation, Paragraph 61)
17. Defra should ensure that operational and policy decisions are clearly communicated to its arm’s-length bodies and the farming advice service in advance of them being made public. It should investigate the causes of the leaks of its proposed changes to the Capital Grants and SFI schemes and put protocols in place to support proper and professional information sharing. Details revised protocols should be set out in the response to this report. (Recommendation, Paragraph 62)
18. Defra must improve its communications with Parliament and ensure that statements regarding policy are made in the House and subject to voluntary and proper scrutiny. Defra should affirm its commitment to doing so in its response to this report. (Recommendation, Paragraph 63)
Formal minutes
Tuesday 13 May 2025
Members present
Alistair Carmichael, in the Chair
Sarah Bool
Helena Dollimore
Sarah Dyke
Jayne Kirkham
Josh Newbury
Tim Roca
The Government’s vision for farming
Draft Report (The Government’s vision for farming), proposed by the Chair, brought up and read.
Ordered, That the Report be read a second time, paragraph by paragraph
Paragraphs 1 to 63 read and agreed to.
Summary agreed to.
Resolved, That the Report be the First Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
Adjournment
Adjourned till Tuesday 20 May at 10.30am.
Witnesses
The following witnesses gave evidence. Transcripts can be viewed on the inquiry publications page of the Committee’s website.
Wednesday 11 December 2024
Jeremy Moody, Secretary and Adviser, Central Association of Agricultural Valuers (CAAV); David Sturrock, Senior Research Economist, Institute for Fiscal Studies (IFS); Stuart Maggs, Partner, Howes Percival LLP; Dr Arun Advani, Director, Centre for the Analysis of Taxation (CenTax)Q1–47
Tom Bradshaw, President, National Farmers’ Union (NFU); Victoria Vyvyan, President, Country Land and Business Association (CLA); Robert Martin, National Chair, Tenant Farmers Association (TFA)Q48–79
Tuesday 14 January 2025
Dame Tamara Finkelstein, Permanent Secretary, Department for Environment, Food and Rural Affairs; Emily Miles, Director General for Food, Biosecurity and Trade, Department for Environment, Food and Rural Affairs; Jonathan Baker, Deputy Director of Policy, Engagement and Strategy, Department for Environment, Food and Rural AffairsQ80–163
Tuesday 1 April 2025
Daniel Zeichner MP, Minister for Food Security and Rural Affairs, Department for Environment Food and Rural Affairs; Janet Hughes, Director of the Farming and Countryside Programme, Department for Environment Food and Rural Affairs; Emily Miles, Director General for Food, Biosecurity and Trade, Department for Environment Food and Rural AffairsQ164–240
Published written evidence
The following written evidence was received and can be viewed on the inquiry publications page of the Committee’s website.
FOF numbers are generated by the evidence processing system and so may not be complete.
1 Advani, Dr Arun, Director, Centre for the Analysis of Taxation (CenTax) FOF0001
2 Environment, Food and Rural Affairs Select Committee FOF0006
3 FOUR PAWS UK FOF0005
4 Harper Adams University FOF0008
5 Labour Animal Welfare Society (LAWS) FOF0004
6 Scottish Land & Estates FOF0003
7 Tenant Farmers Association (TFA) FOF0002
8 UK Flour Millers FOF0007
List of Reports from the Committee during the current Parliament
All publications from the Committee are available on the publications page of the Committee’s website.
Session 2024–25
|
Number |
Title |
Reference |
|
1st |
Pet welfare and abuse: Government response |
HC 581 |
Footnotes
1 Labour party manifesto, 2024
2 Defra Secretary of State at Summer Stakeholder Reception, July 2024
5 Secretary of State speech at the Oxford Farming Conference, 9 January
6 Secretary of State speech at the Oxford Farming Conference, 9 January
7 Oral evidence, The Future of Farming, taken on 11 December 2024
8 Secretary of State, NFU Conference speech, 25 February 2025
9 Department for Business and Trade, Landmark economic deal with United States saves thousands of jobs for British car makers and steel industry, 8 May 2025; Department for Business and Trade, UK-India Free Trade Deal: A Deal For Growth, 8 May 2025
11 Defra, Government launches rapid review to meet Environment Act targets, 30 July 2024
12 Defra, UK Food Security Report, 2024
13 Defra, Government announces reforms to boost profits for farmers with a cast iron commitment to food production, 9 January 2025
14 Defra, Government launches “national conversation” on land use, 31 January 2025
15 Defra, Leading food experts join Government food strategy to restore pride in British food, 21 March 2025
16 Defra, Farming Profitability Review: terms of reference, 7 April 2025
17 UK relations with EU, question for the Department for Business and Trade, 24 July 2024
18 Defra, Government to restore stability for farmers as confidence amongst sector low, 1 August 2024
19 Defra, Floods Resilience Taskforce, 12 September 2024
20 Defra, Delinked payments: replacing the Basic Payments Scheme, 20 November 2024
21 HM Treasury, Agricultural property relief and business property relief reforms, 30 October 2024
22 HM Treasury, Government launches British Infrastructure Taskforce, 18 October 2024
23 Rock Review, 13 October 2022; Defra, Tenant Farming Commissioner, 6 November 2024
24 Defra, an update on capital grants, 25 February 2025
25 Defra, Fruit and Vegetables Aid Scheme Guide, 12 March 2025
26 Defra, Government announces reforms to boost profits for farmers with a cast iron commitment to food production, 9 January 2025
27 Defra, An update on the Sustainable Farming Incentive, 11 March 2025
28 “Defra, Farming Equipment and Technology Fund 2025: guidance now available, 7 May 2025”
29 Oral evidence, Work of the Department and its arm’s-length bodies, 19 November 2024
30 Oral evidence, The Future of Farming, taken on 11 December 2024
31 Oral evidence, The work of the Prime Minister, 19 December 2024
33 31 October; 4 November; 6 November; 11 November; 12 December; 14 January; 10 February; 11 March
34 Treasury Committee, Work of HM Treasury, opened 5 February 2025; Northern Ireland Affairs Committee, Impact of the Autumn Budget on the farming sector in Northern Ireland, 10 December 2024; Welsh Affairs Committee, Farming in Wales in 2025: Challenges and Opportunities, opened 10 March 2025
35 FOF0002; Oral evidence, The Future of Farming, taken on 11 December 2024
38 Defra, Farmer Opinion Tracker for England: October 2024, published 5 February 2025
39 NFU, Farmer confidence hits historically low levels, NFU survey results reveal, 12 March 2025
40 Farmers Weekly, Disgruntled cereal growers start milling wheat “strike” in April, 2 April 2025
41 Oral evidence, The Future of Farming, 14 January 2025; National Audit Office, The Farming and Countryside Programme Report, 23 July 2024
42 Correspondence to the Secretary of State from the Chair of the Environment, Food and Rural Affairs Select Committee, 22 January 2025
43 Correspondence to the Secretary of State, sent on 22 January
44 Correspondence from the Minister for Food Security and Rural Affairs, received on 10 February
45 Nature Friendly Farming Network, How the shock closure of SFI applications has affected nature-friendly farmers, March 2025
46 Sustain, Farmers left in the lurch as Defra’s flagship funding scheme abruptly closes, 12 March 2025
47 NFU, Defra delivers “another shattering blow” – sudden closure of SFI applications, 11 March 2025
48 NFU, Former NFU President appointed to lead farm profitability review, 8 April 2025
49 NAO report, The Farming and Countryside Programme, 23 July 2024
50 Farmers Guardian, Defra’s £2.4bn Agriculture Budget at a “tipping point”, 1 November 2024
51 Farmers Weekly, Days numbered for “delinked payments” in England after Budget, 5 November 2024
52 Domestic farm support funding (Bew Review): reviewing distribution across the UK from 2020 to the end of the parliament, October 2018
53 HM Treasury, Autumn Budget, 30 October 2024
55 House of Commons Library, Debate on the future of farming, 12 March 2025
56 Q72
58 Farmers Weekly, “Chaos and confusion” over ELM spooked farmers, says Labour, 2 November 2022
59 Nature Friendly Farming Network, SFI24 on pause: What went wrong and what must happen next, March 2025
60 Environment, Food and Rural Affairs Committee, First Report of Session 2023–24, Soil Health, HC 245
61 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 9
62 Defra, An update on the Sustainable Farming Incentive, 11 March 2025
63 Defra, Record farmers in SFI schemes as government successfully allocates sustainable farming budget, 11 March 2025
64 Defra, Record farmers in SFI schemes as government successfully allocates sustainable farming budget, 11 March 2025
65 Oral evidence, The Future of Farming, taken on 1 April 2025
66 BBC news, Green scheme closure a “shattering blow” to farms, says union, 12 March 2025
67 Sustain, Farmers left in the lurch as Defra’s flagship funding scheme abruptly closes, 12 March 2025
68 Nature Friendly Farming Network, SFI24 on pause: What went wrong and what must happen next, March 2025
69 Defra, Farm Business Income by type of farm in England 2023/24, 14 November 2024
73 Defra, Farm Profitability Review, 7 April 2025
74 Oral evidence, The Future of Farming, taken on 1 April 2025
75 Defra, Secretary of State speech at the Oxford Farming Conference, 9 January 2025
77 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 19
78 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 20
85 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 3.5
86 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 3.5
87 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 8
88 National Audit Office, The Farming and Countryside Programme, 23 July 2024, paragraph 10
89 Full details of the relief can be seen here.
90 CenTax, Inheritance Tax reliefs: Time for reform?, October 2024
91 Institute for Fiscal Studies, Reforming inheritance tax, Green Budget 2023, 27 September 2023
92 Institute for Fiscal Studies, Inheritance tax and farms, 24 November 2024; Q43
93 Taxing Wealth, Taxing Wealth Report 2024, 5 April 2024
94 House of Commons Library, Inheritance tax: Current policy and debates, accessed on 5 November 2024
95 Oral evidence, Work of the Department and its arm’s-length bodies, taken on 19 November
96 The Telegraph, Inheritance tax on farms is fair and balanced, 1 November 2024
97 Oral evidence, Work of the Department and its arm’s-length bodies, taken on 19 November
98 Oral evidence, Work of the Department and its arm’s-length bodies, taken on 19 November
99 Oral evidence, The Future of Farming, taken on 11 December 2024; Oral evidence, Work of the Department and its arm’s-length bodies, taken on 19 November 2024; Oral evidence taken on 19 December 2024, The work of the Prime Minister; Correspondence to the Prime Minister
102 NFU, Agricultural Property Relief – what you need to know, 1 November 2024
103 Institute for Fiscal Studies, Inheritance Tax and farms, 25 November 2024
104 Oral evidence, The Future of Farming, 11 December 2024
105 Charles Russell Speechlys, The April 2026 changes to Agricultural and Business Property Relief, 20 November 2024
106 Burges Salmon, APR and BPR changes, 7 November 2024
110 Oral evidence, The Future of Farming, 11 December 2024
112 Farmers Guardian, Farmers Guardian survey reveals only 3% of farmers feel respected by Government post Budget, 28 March 2025
114 Farmers Weekly, Opinion: Farming should have an official retirement age, 9 November 2024
116 Institute for Fiscal Studies, Inheritance Tax and farms, 25 November 2024
118 Oral evidence, The Future of Farming, taken on 11 December 2024
119 Charles Russell Speechlys, The April 2026 changes to Agricultural and Business Property Relief, 20 November 2024
120 Oral evidence, The Future of Farming, taken on 11 December 2024
121 Q67; Q70 ‘ Defra, Rock Review, 13 October 2022
123 Institute for Fiscal Studies, Inheritance tax and farms, 25 November 2024
126 NFU Scotland, NFU Scotland Calls for IHT Pause During Farm Profitability Review, 23 April 2025
128 Committee for Agriculture, Environment and Rural Affairs, Northern Island Assembly
129 IFS, Inheritance Tax and farms, 25 November 2024
130 Tax Policy Associates, How to stop IHT avoidance but protect farmers, 24 November 2024
132 Oral evidence, The Future of Farming, taken on 11 December 2024
133 Family Business UK, 200,000 jobs lost from BPR & APR Change, 24 March 2025
136 Tax Policy Associates, How to stop IHT avoidance but protect farmers, 24 November 2024
137 Institute for Fiscal Studies, Inheritance Tax and farms, 25 November 2025; Tax Policy Associates, How to stop IHT avoidance but protect farmers, 24 November 2024
138 CLA, In Focus: Agricultural & Business Property Relief explained, 25 February 2025 ; Q5
139 Resolution Foundation Passing on, Options for reforming inheritance taxation, May 2018
140 Q52; NFU Scotland, NFU Scotland Calls for IHT Pause During Farm Profitability Review, 24 April 2025
142 Defra, Steve Reed speech at the CLA Conference, 13 March 2025
143 Defra, Steve Reed speech at the CLA Conference, 13 March 2025
146 CLA, Sustainable Farming Incentive closure: questions and answers, 24 March 2025
150 Q154 ; Defra, An update on capital grants, 27 November 2024
151 NFU, “Sudden” closure of many capital grant applications creates confusion and frustration, 28 November 2024
153 Defra, An update on capital grants, 25 February 2025
155 Oral evidence, The Future of Farming, 14 January 2025
156 NFU, Defra delivers ‘another shattering blow’ – sudden closure of SFI applications, 11 March 2025
158 Nature Friendly Farming Network, How the shock closure of SFI applications has affected nature-friendly farmers, March 2025
159 The Times, Farmers ‘attacked from every angle’ as green subsidy scheme closes, 11 March 2025
160 Sustainable Farming Incentive 2024 Written Statement, UIN HCWS626, 12 May 2025
168 NFU, An impact analysis of APR reforms on commercial family farms, 25 November 2024
170 Oral evidence, Work of the Department and its arm’s-length bodies, 19 November 2024; Oral evidence, The work of the Prime Minister, 19 December 2024
172 NFU, “Sudden” closure of many capital grant applications creates confusion and frustration, 28 November 2024; CLA, Sustainable Farming Incentive closure: CLA analysis, 13 March 2025; FOF0002
173 Qq4–7, Environmental Audit Committee oral evidence, Environmental protection policies of the Department for Environment, Food and Rural Affairs, taken on 24 March 2025