I’m tempted to emulate the satire of Tom Pride’s Pride’s Purge with this story, but in truth it needs no satire.
Apparently a “leaked document” purports to suggest that Labour are thinking about removing business rate exemptions on Agricultural Land, which could raise £500M.
Farmers are perhaps the most subsidised and tax-exempt of all industries, with the possible exception of the Fossil Fuel industry. Farmers can gain Capital Gains Tax exemption, Inheritance Tax exemption, Corporation Tax exemption, Business Rates exemption and receive at least £240 per hectare per annum for every piece of land they own or rent. Imagine being given £25,000 a year just for owning or renting a house?
The report, in Farmers Guardian calls it a “Farm Tax”. Removing an exemption is not a tax.
The CLA president Henry Robinson reacted by claiming it “If this report turns out to be true, it would mean the end of British agriculture as we know it, the abandonment of much of the countryside, and less money to spend on the environment.” I’m surprised he didn’t mention plagues of frogs, so apocalyptic was his hysterical response. yet its Environmentalists who are regularly accused of exaggerating the threats to the environment.
He went on (now metaphorically foaming at the mouth)
“Most farms are barely viable as it is; requiring them to pay business rates will tip most of them over the edge. Farmers will have to give up their businesses and it is unlikely there will be anyone willing to take them over,” he said.
“This could result in a move to more industrial scale farming on a scale that would be completely unacceptable to the industry and to the British public.”
So on one breath the CLA are saying this business tax exemption removal will cause
- Industrial scale farming;
- The end of British Agriculture;
- Less money to spend on the environment
Planning Minister Eric Pickles weighed in claiming it would push food prices up and threaten the farm sector. Interesting that Owen Paterson the Farm Minister didn’t provide a comment – has he already heard he’s for teh chop; is Pickles now angling for the Farm Brief after his magnificent performance during the floods?
This total dependency by the farming sector on state welfare hand-outs, either via farm subsidies, or via a complicated network of inter-related tax breaks, reminds me of drug addiction. While the addict can continue to gain access to their drug, they can just about function in their daily lives. If that supply is disrupted, the addict will lose all sense of rational purpose and focus entirely on regaining access to their drug. They will take whatever action is needed to protect that supply, including hysterical pleading, stealing, lying and cheating. The solution is that they need to be helped to stop using. Help that includes incentives and sanctions. Help that is supportive but firm.
We as society need to help wean our farmers off their dependency on the benefits derived from subsidy and tax breaks; and only support them where they provide public goods, such as clean water, carbon storage healthy pollinators and wildlife.
…and food? (Reference to final line of your blog.)
food produced sustainably where the environment is cared for at the same time – yes. Any food? no. Farmers produce food for private benefit not public good. They are, after all, not charities but businesses. Charities also own farmland – such as the National Trust. But they are charities first, farmers second.
Yes, healthy organic, wildlife friendly food. If we buy it direct, supermarkets won’t take all the glory either. Bring back the (reformed) co-operative movement. I agree on the addiction analogy. Very difficult to put the rabbit back in the hat. But we’ll have to one day, because the money won’t be there.
The problem is, the majority of people want to buy cheap food and this is the way agriculture has been pushed. To produce cheap, but good-quality food farmers do need subsidising in some way. Ok so there are some farmers that are in a win-win situation, they manage to produce cheap food- cheaply, and also get to rake in a lot of subsidies which is not acceptable. But then there are others like us, and most other hill farmers that cannot maintain a viable business without additional help. We produce grass fed lambs and store cattle, with high standards of animal welfare, whilst looking after the farm for biodiversity and protecting water quality- but people still only want to pay as little as possible for the end product, and we are competing against imports from countries such as New Zealand and Brazil. Until people appreciate the value of the goods we produce, we need additional help to be able to continue what we are doing.
I agree – where farmers such as yourself provide public goods as well as food production, they should be rewarded for the public goods. Food production in itself at the farm or country level is not really a public good in my book, unless it is done in sympathy with the environment.
Last com ties in with some of my comments today. Rose tinted glasses off please. Tough days ahead and not all win-wins. Thinking of chairing some more debates so we can get more of a national conversation, not just a narrow political debate.
sounds good to me Rob. But rose tints or not, CAP has to go. Too much fiddling to no effect. Time to get rid of it and all that is wrong with it; and come up with something new.
I wonder if weaning farming off subsidies might be effected through a system like tax credits. Then those like hill farmers whose land cannot support them could claim it to boost a low profit.
The exemption from inheritance tax is simply regressive. It supports the continuance of family farms (and farm values) and closes the door a little further on young people who want to get into farming – they have to buy land at full value and on a mortgage, Even a young person inheriting money pays tax on that but gets no rebate if they invest in a farm whereas farm inheritors not only get it handed down and no mortgage to pay they get off with inheritance tax too.
If we want more young people into farming we need a more level playing field. Personally i’d go the whole hog and make the field even more even with Land Value Tax – that would distinguish between marginal and high grade land, and between provision of common value (access, environmental benefits etc) and agribarons engaged in industrial extraction for private profit.
Thanks very much Alistair.
Have you read my piece from last week https://anewnatureblog.wordpress.com/2014/06/11/the-cap-no-longer-fits/
I also think a land value tax has potential – both in terms of farmers, but also developers.