Call yourself a farmer?

Sponsored feature | Emily Pumfrey, partner, HCR Hewitsons

Harvest is well under way across Cambridgeshire. I think we’d all call those driving tractors and combines ‘farmers’. We may now even call Jeremy Clarkson ‘a farmer’. He’s clearly shown the dilemma farmers are facing as subsidies have been scaled back and the fight to produce food sustainably and profitably intensifies.

In season three of Clarkson’s Farm, he’s divided 1,000 acres, creating a half ‘farmed farm’ and half ‘unfarmed farm’ to prove both can be used to make money.

What does ‘agriculture’ mean today?

Is the ‘unfarmed farm’ agriculture? We’ve had the same definition of ‘agriculture’ since 1995, one which has barely changed since previous incarnations in 1986 and 1947, which focused on the post-war drive for food production.

This doesn’t sit comfortably alongside the rewilding, biodiversity and nature recovery projects that Clarkson is trying. It also doesn’t tie into the current DEFRA Environmental Land Management schemes (ELMs), where farmers receive public money for public goods i.e. environmental benefit.

Why does this matter?

Inheritance Tax (IHT) – farmers rely on Agricultural Property Relief (APR) to pass their farmland tax-free onto the next generation so they can continue farming. Following much lobbying and consultation, in the spring budget, the former chancellor Jeremy Hunt announced that APR would be extended to cover land managed for environmental purposes in approved public management agreements – which everyone assumed meant ELMs.

Of course, we’ve had a change of government since then and it’s not yet known what stance Labour will take on ELMs and APR. There are always rumours that APR won’t survive which would leave farmers relying on the more general Business Property Relief (BPR) from IHT.

We’ll have to wait for the expected autumn budget for an answer on whether APR survives, if it does what land use will be covered or if not, whether farmers will have to turn exclusively to BPR.

What does remain clear is the continued need for food security in a volatile world and the environmental benefits farmers are uniquely placed to provide. Hopefully, DEFRA Secretary Steve Reed, and Chancellor Rachel Reeves will recognise this.

For more information, contact Emily Pumfrey, partner, agriculture & estates team, on 07570 683583 or 01223 447482.

Visit hcrlaw.com.