The farmers march on Westminster Labour's budget will destroy rural life

Yes, I’m sure you can probably find some super-wealthy farmers down south who don’t deserve your sympathy, and there are perhaps a heap of other folk who’ve retired to a house and a few fields in the sticks and call themselves “farmers” who probably don’t deserve tax breaks — but don’t mistake that for the reality for many people who work on the land. It takes many farmers half their working lives to sort out their parent’s succession, pay out their siblings, and get their business breaking even. Most farmers I know have second jobs to pay their bills. Some use food banks.

The Labour Government’s Budget has infuriated farmers, with its changes to inheritance tax and its withdrawal of much of the old payments systems faster than promised. Thousands are threatening to march on Westminster next week. But the truth is the system has been exploitative and broken for decades. Long before Rachel Reeves entered the Treasury, farmers have been pulling the short straw. And much of the pain inflicted was courtesy of the Tories. To really understand the heat of farmers’ anger today, you need to understand how we got here.

Britain’s social contract with farmers used to be simple, formed after the Second World War: grow a lot of cheap food so the country never runs out, and don’t trouble us too much about how you do it. Until Brexit, we farmers were part of the EU’s Common Agricultural Policy (CAP) and received the same levels of support as farmers across Europe. The result was a period of remarkable productivity growth in farming and a prolonged period of cheap food for consumers.

This period of prosperity would not last. From the Eighties, discontent began to swirl on both sides of the political spectrum. On the Right, the CAP was despised for subsidising food production rather than leaving it to market forces. Farmers had somehow escaped the economic reforms of the Eighties that shuttered the coal mines and other “anachronisms”. The CAP also created mad surpluses of certain produce by over-paying for them. On the Left, meanwhile, environmentalists began to point out the disastrous side effects of the CAP approach — that farmers were making fields monocultural and sterile for nature, and that we were exploiting the natural assets beneath our fields, namely the soil. By the 2000s, there was growing clamour for a more enlightened and “green” agricultural policy.

Europe was slow at delivering this and is still grappling with it, imperfectly. But in 2016, the UK voted to leave the EU and with it the CAP. Farmers were as bamboozled, deceived, confused, idealistic, and naïve as any other group of British people faced with that nonsensical binary choice.

After Brexit, the Government promised that the old level of CAP funding would be maintained at £2.4 billion for the foreseeable future. Yet the subsidy system would look different. The post-Brexit social contract was that each farm would be offered a transition from the old area-based system to the new Environmental Land Management (ELM) schemes intent on delivering “public benefits for public goods”. If you were a progressive “green” farmer, you could go from the flawed old system to making money by providing things the country valued, such as hedgerows, trees, and wetlands.

Having been bashed my whole life for being a “subsidy junkie” farmer, I welcomed these changes. We would transition from a production-obsessed approach to a more balanced one, where we still produced food, but we did so in a far more enlightened way that also made space for nature. Suddenly, the state was paying you to have butterflies, birds and wildflowers on your land, alongside your usual private income from livestock sales.

We were first in line to apply for the new schemes, enthusiastic, like many other farmers. And everyone in British political life seemed to agree that this was what we wanted from our farmers. But the whole vision for this change rested on trust.

Trust that the winding down of the old scheme would coincide with the emergence of the new one.

Trust that progressive farmers could transition between the two so that their income need not vanish.

And trust that that the budget would remain something like it was in real terms, and ultimately rise to what it needed to be to transform rural Britain. At this point, it’s worth saying that, though the old CAP budget of £2.4 billion sounds like a lot, it is actually peanuts given the scale of the transformation needed — the entire budget for farming, food and nature for the UK is basically the same as the Manchester Health Trust.

We believed that the budget would not only remain the same in real terms, but that it would ultimately rise to meet our national objectives and legal commitments on addressing biodiversity loss and climate change. No one has even bothered to work this out yet, but estimates I’ve heard spread from about £4 billion to £10 billion per annum to transform British landscapes. This is not to “subsidise” farming as it would have done in the past, but to pay for the costs of nature restoration.

We believed that the Government would honour their promises and align their other policies, including, vitally, trade agreements. If you hold British farms to a higher environmental standard, you have to then protect them from carefree foreign competitors — otherwise it is all rank hypocrisy.

And above all we had faith that the Government would have our backs as we helped them achieve what would once have been considered the most un-farmer-like of feats — including restoring nature, mitigating climate change and alleviating downstream flooding.

Every single one of these promises has been broken in the past four years.

The old schemes have been wound down rapidly — and this month’s Budget sped up the process even further by capping the amount payable, so most farmers won’t get the money they were promised and budgeted for this year.

And worse, the new schemes have been slow to emerge, and due to shortages of staff and expertise at the government agencies, thousands of farmers have not been able to enter them. In the past financial year, the underspend on the new schemes was £358 million, and there is suspicion that that figure may double this year. This means that so far hundreds of farmers have presented their plans for nature restoration and been turned down or excluded from the new schemes. The economics of this farce were horrific, with the income for hill farmers dropping at least 38% because of this botched transition. We’re seeing a staggering squandering of good will and opportunities to restore nature around rural Britain.

The budget has remained at £2.4 billion, but because of inflation that is now worth about 40% less in real terms than when we left the EU. That’s a massive cut in funding in real terms. And the headline budget figure means nothing if farmers can’t actually access it because of the bottlenecks.

But British farmers have also been massively undermined by the Tories signing trade deals with Australia, Canada and other nations that gave away any semblance of protection for our farmers. A foreign farmer can now not only produce food cheaper because they work outside of UK regulations, but they can sell their products in British markets. You could scarcely devise a more unfair trading system. It favours the less sustainable farmer abroad over the more sustainable British farmer — and is leading to Britain importing ever more cheap food from abroad, which is often then processed and labelled as “British” in the supermarket. Our morals are applied at home, and yet are absolutely ignored when it comes to imports. We were promised by every prime minister post-Brexit that this wouldn’t happen — and yet it has.

You shouldn’t care about this because of the welfare of farmers, that would completely miss the point. It will be you and your family who go hungry if we hit a disaster, not the farmers. No, you should care because we have a highly risky just-in-time food system that isn’t fit for purpose in an increasingly fractured geopolitical world. Donald Trump is preaching “American First”, and he’s not alone in heading in that protectionist direction. The Chinese, Russians, the EU, and others are securing their food supplies for a future of scarcity — our dipshit policy is to “Leave it to Tesco”. That’s wildly unsafe in a world where global supplies can no longer be taken for granted.

Of course, few people believe we should have an entirely closed food system — it doesn’t make sense to grow bananas here. But there needs to be some kind of regulatory and support equity between British farmers and imported goods. British farmers now lag far behind their EU and American counterparts in terms of support and trade protections.

All the while, supermarkets shamelessly rip off British farmers and use imports of food we can easily produce in our own fields to manipulate prices. Farmers are almost entirely powerless in their dealings with them.

All this has been compounded by a raft of absurd offset schemes that allow other businesses to shift their carbon footprints on to land, inflating its value and outcompeting farmers. And everyone from house builders to pension funds has been hiding their money in land as a tax dodge — inflating the price of land way beyond its farming value, which is something the budget doesn’t address.

The reality of the “new deal for farmers” has been one damn rip-off after another. After 20 years of environmental rhetoric, and farmer bashing, Britain has failed to offer most farmers a shot at a decent future. Most have been left to return to a heavy production focus. And yet the environmentalists who led the attacks on the old production subsidies seem to have ghosted away, or lost interest in the fact that the brave new world hasn’t materialised, leaving their erstwhile farming allies deep in the shit.

The farmers who never believed a word of it, the hardcore sceptics who focused on productivity-growth, have been proven right, and the idealists like me have been left looking like naïve fools. And to make matters worse, Labour won’t even admit what they’ve destroyed. In the past few months, the very promises themselves have evaporated. It’s as if the last 20 years of talk about change never even happened. The bold environmental promises the Prime Minister made at COP29 are effectively nonsensical without a supported transformation of UK farming.

Labour’s Budget has created a firestorm about Agricultural Property Relief. The so-called “family farm tax” seems to have hit a nerve with people because it is deeply unfair and provides a useful stick for the right-wing press to beat them with.

And it is probably true that with some good succession planning and an expensive tax advisor, much financial pain can be avoided by most small farms. But that’s not really the point. The Budget doesn’t make sense as anything more than a short-sighted tax grab. Taxation should distinguish between working farmers and tax-dodging chancers. By all means go after the big estates. But going after working farms struggling to survive is cruel. Labour should distinguish between land being sold so their owners can make a profit, and land with an inflated value which often creates little or no wealth advantage to those holding it to farm. After all, land isn’t money.

The Budget fails to fit into any kind of coherent approach towards building a better countryside, viewing farmers purely as a source of taxation. Any kind of progressive vision for rural Britain needs farmers in their thousands to be agents of change — which is impossible when they’re under vast financial pressure. When the government cuts farmer support, it reduces the amount of “public goods” in the country — which crudely means less hedgerows, less wetlands, less birds, and less insects. It is profoundly self-defeating.

Many environmentalists have completely misjudged this issue. As less and less of taxpayer’s money goes to farmers, the Government has less and less leverage over how they run their businesses, and less right to ask anything of them beyond pursuing their own self-interest.

Someday, the Government will have to go back to farmers and rebuild that deal. And when that happens most of them are not going to play ball. Many will drift to the populist Right as they have done in America; they will say that if the progressives can’t deliver anything better, you may as well vote for the folks who will cut your taxes. You either believe politicians can come up with the funding for progressive change, and can honour their promises over time, or you don’t. And for most farmers the past few months have killed that belief — both Labour and the Conservatives carry their fair share of blame for that.

Our every field will now have to be worked harder and sweated as an asset. The progressive greener dream for UK farming has died.

***

James Rebanks’ new book The Place of Tides is published by Allen Lane.

---