Farmers vs Politicians – Agricultural upheaval is just the beginning for Britain’s fragile economy

With soaring costs and harmful government policies, the plight of British farmers exposes a deeper crisis threatening the UK’s fragile economy, endangering Britain’s food security.

SAD RABBIT

Over the previous months, a simmering conflict in the English countryside has boiled over into an open feud between farmers and politicians, culminating in thousands of farmers rallying in London, to protest policies they say threaten their livelihoods. The flashpoint issue was a proposed tax on inherited farmland, with the government moving to levy inheritance tax at 20% on farms valued above £1 million, describing it as a modest measure affecting only the wealthiest estates. However, this row encapsulates a deeper rift between rural England and Westminster, as shrinking subsidies and thin margins, have meant that this policy is seen as just another potentially devastating blow to family-run farms.

The backdrop to this crisis has stemmed from years of mounting pressure, as following Brexit, the UK began replacing the EU’s Common Agricultural Policy subsidies with its own system, resulting in a bumpy transition and continued uncertainty for farmers. The government had promised to keep farm support at roughly £2.4 billion a year, in line with the former EU level, yet significant funds have gone unspent, with over £300 million of the farm budget not paid out over the last three years. Compounding these issues, production costs have surged, with global inflationary pressures and global instability, resulting in the prices for fuel, fertiliser and animal feed rallying. This has understandably squeezed farm margins considerably, with figures showing that the average farm business income plunged by over 50% between 2023 and 2024, the lowest in nearly a decade. It is this very freefall in profitability that has left many farmers effectively operating at break-even or worse, and is at the heart of their grievances towards the prospect of new taxes on farmland assets.

The fate of the agricultural sector is inextricably linked to that of the wider economy, with the financial squeeze on farms reverberating through the broader food supply chain, and resulting in a spike in food prices rivalling the 1970s. Yet, many producers feel caught between surging costs and powerful supermarket buyers, with retailers’ relentless focus on low consumer prices leaving farmers underpaid for their goods. This comes at a time where food insecurity is still a real issue, as the UK produces roughly 60% of its own food, down from 78% in the 1980s, and is heavily import-reliant for fresh produce, leaving the nation vulnerable. An over-reliance on imports for staple goods can leave the UK exposed to external shocks, a lesson driven home by recent global supply chain disruptions and the war in Ukraine’s impact on food prices.

Unsurprisingly, the feasibility of dramatically renegotiating post-Brexit deals remains limited by diplomatic and economic realities, however, more tactical tweaks, such as leveraging safeguard provisions, doubling down on promoting British produce, and coordinating with like-minded countries on production standards, could be the first step in rebuilding. Policymakers are increasingly framing trade in terms of resilience, as deals must not only pursue efficiency and consumer price benefits, but also ensure domestic farming capacity is maintained as a hedge against global volatility. Therefore, renegotiating terms to favour domestic producers could be a way to bolster the UK’s self-sufficiency in agriculture, and give UK farmers a fair chance. Furthermore, there is also a global competitiveness angle, as UK farm exports could gain better access abroad if trade deals are negotiated with strategic focus on agriculture, and by branding Britain as a source of premium, high-welfare produce.

The government, for its part, insists it must balance farmers’ concerns with fiscal needs, environmental goals, and trade obligations, arguing that a 20% inheritance tax on farm estates closes a loophole exploited by the ultra-wealthy and will raise funds for rural public services. However, for many family-run operations, farmland values are so high that many ordinary family farms, with extremely modest incomes, could own land easily exceeding £1 million, and thus find themselves ensnared by the policy. The dilemma of being land rich but cash poor is now at the heart of their grievances, as heirs of family-run farms may be forced to sell land to meet tax bills, imperilling businesses passed down for generations. Consequently, the structure of UK farming might also be forced to change, with larger agricultural businesses likely to buy up land to benefit from scale in purchasing and production efficiency.

Ultimately, how this standoff ends will shape the future of British farming, and by extension, the trajectory of the wider economy. A prolonged deadlock risks more farm closures and heavier reliance on imports, undermining the nation’s food resilience and leaving the agricultural sector exposed to global price swings with less subsidy support. Against this backdrop, many in the sector predict a patchwork compromise, with a higher inheritance-tax threshold for active farms, extended instalment plans, or conditional exemptions if the inheritors continue farming. Yet, this issue is less about policy nuance, and more about a reframing of the narrative around domestic production, and the importance of supporting British industry.

The same tensions seen in agriculture are playing out across the economy, as domestic producers, from advanced manufacturers to high-growth technology firms, are having to contend with supply chain disruptions, labour shortages, and the relentless pressure of international competition. The government must decide whether to continue championing open markets at any cost, or to pivot towards a more strategic approach that ensures key British industries can compete on fairer terms. If policymakers fail to act, the risk is not just a further erosion of British farming, but a more profound weakening of the UK’s economic base, that could leave the country more exposed to global shocks and dependent on external suppliers for critical goods and services. Without a clearer vision for how domestic businesses can compete on fairer terms, policymakers risk not only driving family farms into extinction, but accelerating the decline of industries vital to Britain’s economic future.

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