Environment Secretary Steve Reed has apologised for the “shock” suffered by farmers after the government upped taxes on farms.
Ministers are battling backlash from farmers over various measures announced in last year’s budget, including introducing inheritance tax for agricultural businesses worth more than £1m, and a faster phaseout of EU-era subsidies in favour of environmental payments.
In an attempt to reset relations with the sector, the environment secretary earlier apologised for the impact of the changes, as he set out plans to try to get cash flowing to farms.
“We were shocked by the size of the financial black hole we were left to fill, and I’m sorry that some of the action we had to take, shocked you, in turn,” he said in a speech at the Oxford Farming Conference.
At times, he was drowned out by the sound of around 30 tractors in a protest outside.
A small group of farmers honked horns and blared the tune of ‘The Final Countdown’ – warning the tax changes meant the end of the road for some farms.
But Mr Reed denied that upping inheritance tax would force some farms to sell up.
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“No, I don’t accept that,” he told journalists after his speech.
“I recognise that’s how they feel,” but farms were already going bust under the previous government, he said. “It’s nothing to do with inheritance tax. It’s because the sector isn’t profitable.”
But he admitted there would be some “fallout along the way”, with the reforms not kicking in until 2026.
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Farmers are also reeling from an onslaught of wet weather that has ruined crops, delayed payments for environmental schemes, poor profits from supermarket sales and post-Brexit trade problems.
In his speech, he had set out new measures to try to bring the sector “back into profitability”.
These included helping farmers to sell their excess solar power to the grid, making it easier to build barns and other infrastructure to boost food production, and eventually increasing the amount of British produce bought by the public sector.
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Tom Bradshaw, president of the NFU farming lobby group, said the apology “resonated”.
“It’s the first time we’ve heard anything like that, a recognition that there needed to be any apology at all.
“But the very fact that we then go on to talk about diversification suggests that they’re missing the point that food production itself needs to be profitable.”
He welcomed some of today’s announcements but said it would take years for the benefits to kick in, when the sector is “on a knife edge” today.
They are calling for a consultation on the inheritance tax changes, faster payments for environmental schemes and “fairer functioning markets”.
He agreed no farms were going bust today because of the budget, but that could change once the policy takes effect next year.
