Government manipulating farmers with their agendas and demands is trickling throughout Europe: first the Dutch farmers now the British farmers.
November 11, 2024
By: Bobby Casey, Managing Director GWP
While we haven’t heard much about the Dutch and other EU farmers in the latter part of 2024, the battle is far from over in Europe. The UK is now facing a similar situation with a confluence of failed government policies converging on this one industry: farmers.
Similar to the US, farmers in the UK receive government subsidies. The 2024 Farm Bill in the US is estimated to be $1,364 billion over 10 years. I don’t know how it works in Europe or the UK, but in the US, the agricultural subsidies are a huge racket. It has led to massive waste, top-heavy distribution of funding to where the smaller farmers rarely get enough to support themselves, and oddly non-farming city-dwellers receiving over $60 Million in farm subsidies.
Between rising costs in fertilizer and energy and the green “sustainability” mandates being imposed, the farmers are getting squeezed across Europe: first the Dutch farmers, now the British farmers.
A Post Brexit UK Agricultural Industry
The UK was the beneficiary of CAP (Common Agricultural Policy) when it was a member of the EU. Farmers received direct payments ranging from £2 Billion – £4 Billion per year. They are no longer eligible for this funding, which means the UK must devise a replacement scheme lest all the costs of food go through the roof. This is what the UK must replace in some way:
In past years, EU subsidy payments have accounted for 50–80 percent of UK farmers’ income. In leaving the EU, the British government committed to slowly phasing out the CAP subsidy payments. In 2022, farmers lost between 20 and 40 percent in subsidy income compared to 2021. By 2024, subsidy payments will have gone down between 50 and 70 percent.
The case Brexiters made was that the UK paid in more than they got back from the EU, and this included CAP funds. The claim was that the EU was a financial albatross on the UK, and were it not for their EU contributions, the UK could reinvest more into its own country.
Brexit Isn’t the Sole Culprit
The global conflicts specifically between Ukraine and Russia have not helped. This has impacted the cost of farming significantly:
This loss in income has coincided with large production cost increases. In the past year alone, the cost of fertilizer has increased by around 171 percent, in part due to the war in Ukraine. Rising energy and fuel costs have made it more difficult for farmers to harvest and transport produce.
The UK government promises to keep the subsidies around £2.4 Billion for their farmers. But qualifying for these subsidies seems agenda driven:
Colin Rayner, who has 2,000 acres of arable land across east Berkshire and south Buckinghamshire told the BBC,”We have been farming for 500 years and the government now has a scheme where they will pay us more money to grow wildflowers than to grow food. It is insanity.”
The social and political engineering of the subsidies is showing, as the priorities are clearly misaligned with what the population and industry workers want:
British farmers have had to cut back on food production in order to stay in business and have been forced to take up greener alternatives, according to the National Farmers Union (NFU).
In an interview with the Financial Times, NFU president Tom Bradshaw said some farmers are rewilding or growing crops for biofuels to keep their businesses going amid large cuts to food subsidies as the government winds down the former EU payment scheme.
While the issues are different, the aggravation and financial pain remains the same, because the source is still the government: first the Dutch farmers now the British farmers.
The Last Nail in the Coffin for UK Farmers
The Labour Party is coming for the farmers, in a poorly considered attempt to capture a few more dollars from potential tax dodgers. Until recently, you could pass on farmlands to the next generation without paying an inheritance tax.
“…Labour’s Budget announcement that from April 2026, it will reform the Agricultural Property Relief (APR), which allows farmers to easily pass their businesses to the next generation, by introducing a 20 per cent tax rate on the value of all farms and businesses worth more than £1 million.”
Third generation British farmer, Clive Bailye, who runs a 750 acre farm near Lichfield says the following:
“The idea of ‘farmers pretending they’re poor’ is ridiculous. In terms of asset wealth, there’s no getting away from the idea that if you own a farm, and you have the equipment to farm, you have significant asset wealth. But you can’t live off assets. You live off the profits those assets generate, and typical farming returns, if you’re good at it and smart with subsidies and know what you’re doing, you’re doing well if you’re getting 1 or 2 per cent return on investment.
“That doesn’t make people wealthy when it comes to putting food on the table and keeping the lights on. There are family farms with well in excess of £1 million in assets that are living below the poverty line, and certainly far less than the living wage. But that’s a difficult thing to get across to the general public if you see a farmer in his big house and shiny tractor.”
This £1 Million threshold is so low if you consider that most of that comes from the appraisal of the land. Then you have the appraised value of its development inclusive of the house and the crops generated. It’s actually not very difficult to hit that mark. But if you’re only making 1-2% returns on investment in a good year, you don’t have 20% of the value of all the farm assets above £1 million lying around to pay in the event the owner dies.
This is a different iteration of the “unrealized gains” tax. Your land value went up. Your business is bringing in X% more revenue because your currency is worth less. Now you owe Y% to the state because someone died.
Even if there were some rich people avoiding inheritance taxes by buying a qualifying plot of land and declaring it farmland or a preserve… what’s the problem? The whole point was to encourage farming and beautification.
A couple of protests are planned in the next week or two from farmers who stand to be collateral damage in their government’s Machiavellian approach to capturing a few more pounds in tax revenue.
While you might not see tractors in the streets dumping copious amount of manure on the steps of their government as you did in Holland, you will see concerned British farmers coming out in numbers. (I’ll leave it alone that protests against oil drilling or Israel were NOT capped by the government, but the one from the farmers is capped at 1,800 attendees.)
First the Dutch farmers now the British farmers are facing down their government’s obnoxious political agendas.
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