Malevolence, miscalculation or ignorance – a tractor tax will hurt the British countryside like nothing else

The first time I brought a girl home to meet my family, the occasion was derailed by a piglet that tumbled out of the Aga oven and stood wobbling and blinking on the kitchen carpet.

“Why is there a pig in your kitchen, Mrs Benson?” She asked my mother, not unreasonably.

“Because he’s not very well,” said my mother. “None of them are.”

“Them?”

My mother pushed the bottom oven door wider open to reveal two more pale pink piglets wrapped in old tea towels and sleeping in a battered baking tray. Runts and recklings born prematurely, and brought in my dad’s big coat pockets from the farmyard outside to get warm. The Aga was old and didn’t work properly, but its oven was functioning enough to warm a sick animal, and so, like everything else in our house, it was co-opted for the farm. No one minded. My mother got a patterned brown nylon carpet, so it didn’t show the muck.

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We cared very much about the animals, but it wasn’t just sentiment. My dad and mum’s farm was small, the sheds were old and draughty, and pigs didn’t make a lot of money so you couldn’t afford to lose them. It was learned from hard experience; all 14 farms in our village were the same, the households doing the same thing as far back as anyone remembered, their homes, families, communities and money all aspects of the same thing – work. It was hard and worrisome because you always felt at the mercy of supermarkets and the weather, but it had rewards: it was nice to sometimes sell our potatoes to local fruit and fish and chip shops, and even if it was a pain pulling cars out of snowdrifts with your tractor, it felt good to feel useful.

Plus of course, you did get to work in the Yorkshire countryside which, as Yorkshire people know, is the greatest of all.

It has been growing more and more difficult to sustain family farms like ours. Incomes are falling. Power long ago shifted to the food processors and retailers, whose squeeze on margins puts hundreds out of business every year. Post-Brexit government support changed things again, with the lack of real strategy causing massive uncertainty. The cost of meeting the inspection of the Red Tractor (the food standards quality mark), which was needed to correct the mistakes and excesses of the 1970s and 80s, is necessary but ever-increasing. In a globalised world, crop and animal diseases are harder to protect against, and climate change is leading to disturbing amounts of drought and flooding even in temperate Britain.

Having dealt with all these problems, a younger generation find themselves used for farmwashing on instore supermarket displays, even while their public image takes a battering.

No one talks about the massive reductions in greenhouse gases achieved by British agriculture since the 1990s; instead, your kids come home from school where they’re taught your pigs and cows are to blame, regardless of how they’re actually farmed.

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Against this backdrop, Rachel Reeves’s changes to inheritance tax rules look like an existential blow that is so harsh, stark and sudden that it can only be motivated by malevolence, miscalculation or ignorance. Personally, I think the proposals unveiled in last week’s Budget for farms worth more than £1m to be subject to a 20 per cent inheritance tax can be explained partly by a common misunderstanding of British agriculture’s madhouse economics.

Farming is an unusual enterprise because, while it is ostensibly run on business principles, it is bound up with our society’s relationship with nature, food, families and the land itself. These are not things known for inspiring rational responses in people, which partly explains why many farmers continue working when they’re losing money, or even when they could sell up and live off the investment. The extra complicating factor is that it needs a lot of physical space and soil. That means it tends to involve owning land. Land is valuable, so you can borrow money against it, which means there is often money available for the business that, to put it mildly, wouldn’t be available if you were borrowing against your actual profit and loss.

Since the crash of 2008, investors have put more and more money into land because it’s seen as relatively safe; this is one reason we have seen the names of people like James Dyson feature in this debate. That change has pushed up land values, which means farmers can borrow more and – coincidence or exploitation, who knows? – suppliers of tractors and other equipment, fertiliser and pesticides, seeds, buildings and livestock have hiked their prices. These increases are often mentioned in passing as “increasing costs”, but they are far greater than that commonplace phrase suggests.

A friend who runs a middling family farm in Yorkshire has just had a gearbox replaced on a tractor. The repair cost £17,000. Twenty years ago, the entire tractor cost £35,000; the equivalent model now is £250,000. Food is more expensive than it was, but it would need to have gone up by 700 per cent to reflect the same increase. And it hasn’t.

Of course, most businesses leverage their assets, but farming is an extreme case. One problem with the new inheritance tax proposals is that many people won’t be able to borrow any more to pay the tax because they’re maxed out paying off the machinery bills, and they won’t be able to sell off a chunk without lowering their collateral and therefore their loans.

Privately, most farmers I’ve spoken to think that the margins of the really giant landowners like Dyson – who is Lincolnshire’s primary landowner, with 35,000 acres, and has seen his wealth soar by almost £7bn in the past year – mean they will be able to pay, and if they do, it will reduce the upward pressure on land prices and thereby rebalance the market. But the £1m threshold, everyone agrees, is ludicrous; in reality, a £1m farm in 2024 is more likely to be a hobby than the sole source of income for a family.

These mistakes feel like mistakes born out of ignorance and lack of interest, which, in a way, is more offensive than the mistakes themselves. British post-war agricultural policy has been characterised by short-term political expediency and an obsession with producing high volumes of cheap food rather than high standards. What has always been lacking, in Conservative and Labour administrations alike, is a sense of partnership with working farmers, who have a sense of the real cultural value of their work.

In France, the government decided in the 1950s to support middle-sized family farms as the best way of helping not just volume production but also communities and food quality. No one is saying France is perfect, but you can see for yourself what this policy has meant for its food and villages. France has nearly half a million farms. In 1945, we had the same number, but it’s dwindled to around 200,000 now. Don’t let anyone tell you that wasn’t a choice made on your behalf by people in this green and pleasant land who didn’t know what they were doing.

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Even if you find it hard to sympathise with people whose balance sheets include six zero figures, it is worth thinking about the countryside itself. This is a sensitive subject because of the well-publicised damage some farmers have done to our flora and fauna in the past. In an age of sponsored environmental schemes and interest in climate change and soil health, though, the old stereotype of Farmer Palmer nuking everything in sight with glyphosate is passing, if not gone completely.

If you talk to people who actually run environmental schemes – Beccy Speight, the CEO of the RSPB, is a notable example – many will tell you that small-scale projects with sympathetic local farmers tend to be among the most effective. That’s because “the land” differs not just from area to area but from field to field: its contours, drainage, aspect, flora, history, and whatever weird stuff might be buried underneath it all determine what will grow and live there, and that kind of understanding comes only from the long and intimate knowledge that farmers have.

If we do decide to give up on family farms – and make no mistake, that is what these proposals amount to – then we will forgo a vast amount of that knowledge, and it will be unrecoverable, a wiped hard drive. What we will most likely have in its place are corporate agricultural organisations with high-turnover, non-local workers, who build more huge, US-style robotised livestock feed lots, and use vast stretches of arable land for wind turbines, solar panels and biomass crops; all necessary, but not necessarily what we want to cover most of the countryside with.

In the end, it will be a choice. We should at least be able to expect that the people responsible are aware of the choice they are making.

Richard Benson is a journalist and author of ‘The Farm’ and ‘The Valley’