The FRA Sounds Alarm on Budget's Devastating Impact on UK Farming and Food Production

The Farm Retail Association (FRA) has issued a stark warning about the catastrophic consequences of the recent Budget announcement by Chancellor Rachel Reeves. The organisation contends that the measures outlined will decimate the UK’s farming industry and compromise the nation’s food security.

A Death Knell for Family Farms and UK Food Culture

The changes to Inheritance Tax relief on farms and on businesses is a particularly devastating blow. This policy change will force many family-run farms and farm retail businesses to sell off land and assets to meet inheritance tax demands, leading to a significant loss of agricultural heritage and a decline in domestic food production.  

A Perfect Storm for Small Businesses

In addition to the challenges posed by the changes to IHT relief, the FRA highlights the cumulative impact of other measures:

• Minimum Wage Increases: While the FRA supports fair wages, the substantial increases in the minimum wage, particularly for younger workers, will place immense pressure on farm retail businesses with tight profit margins.
• Reduced Business Rates Relief: The reduction in business rates relief for retail and hospitality businesses will directly impact farm shops and other farm-based retail outlets, increasing costs and hindering growth.
• Employer’s National Insurance Hike: The rise in employer’s National Insurance contributions will further erode the profitability of farm retail businesses, potentially leading to job losses and reduced investment.
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A Bleak Future for UK Food

Emma Mosey, FRA Chair and owner of Yolk Farm in Boroughbridge, expressed deep concern: "Yesterday’s Budget sounded a death knell for small-scale food production in the UK. These measures will accelerate the decline of family farms and the loss of our rural heritage. The future of UK food culture hangs in the balance."

"Our members are facing a perfect storm of increased costs. The combination of rising minimum wages, reduced business rates relief, and higher National Insurance contributions will squeeze profit margins and force businesses to make difficult decisions. This could lead to job cuts, reduced investment, and higher prices for consumers."

"Our members are committed to paying fair wages and providing good working conditions. However, the rapid increase in costs is making it increasingly difficult to remain competitive. We need a balanced approach that supports businesses while also ensuring a fair deal for workers."

“Despite running on a platform of supporting small businesses, promoting growth and reducing inflation, the government’s actions yesterday could just do the opposite.  Many farm retail businesses are family-run by hard-working people, which calls into question the government’s definition of a working person.  These fears cannot be overplayed.”

The FRA urges the government to reconsider these damaging policies and implement measures that support the agricultural sector. A thriving farming industry is essential for the UK’s food security, rural economy, and environmental sustainability.

About the Farm Retail Association (FRA):

The Farm Retail Association is a leading organisation representing the interests of farm shops, farmers markets, and other farm-based retail businesses across the UK. We promote the growth and development of the farm retail sector, championing the importance of local food and sustainable farming practices.

www.farmretail.co.uk