The National Farmers’ Union (NFU) has urged ministers to ‘renew their relationship’ with farmers, warning that collapsing confidence has left investment in food production ‘as bone-dry as the fields this summer’.
At the heart of industry concern lie the government’s inheritance tax (IHT) reforms, which from April 2026 will cap agricultural property relief (APR) at £1 million per estate. Anything above that threshold will face a 20% tax charge sparking widespread fears of crippling bills, forced farm sales, and the erosion of long-established family enterprises.
Confidence dries up*
Across Britain, many farm businesses have already begun scaling back investment plans amid the uncertainty. Growers have shelved plans for new grain stores, while a Lincolnshire producer has postponed investment in temperature-controlled potato storage. Others are focusing only on short-term maintenance rather than long-term growth.
“This should worry us all,” said NFU president Tom Bradshaw. “These are the businesses that produce the nation’s food and manage our iconic countryside. Without the confidence to invest today, we risk food supplies for tomorrow.”
Mr Bradshaw accused ministers of failing to match rhetoric with reality, pointing to the government’s ‘Renew Britain’ slogan launched against bucolic rural backdrops at the Labour Party Conference. “The reality is far from sunny,” he said. “Farmers are being asked to invest in a future where the rules of succession and tax could make their work unaffordable for the next generation.”
NFU calls for a reset
In its formal Autumn Budget submission, the NFU has laid out a package of proposals designed to restore stability and encourage investment across the sector.
Top of the list is a rethink of inheritance tax reform, advocating a more targeted approach that raises revenue for the Exchequer but protects family farms. The union argues that agricultural businesses are typically asset-rich but cash-poor, meaning high tax liabilities could destroy otherwise viable operations.
The NFU also wants to see the Annual Investment Allowance raised to £5 million, extended to cover structures and buildings, and accompanied by enhanced capital allowances for low-carbon and productivity-boosting investments.
Other priorities include:
• Ensuring the government’s Making Tax Digital rollout is practical for complex rural businesses.
• Maintaining rebated red diesel for agricultural use.
• Ruling out any introduction of wealth or land value taxes.
• Retaining the commercial vehicle classification for double-cab pick-ups, following concerns over proposals to reclassify them as cars for tax purposes.
“These measures would help unlock the growth that British food production so desperately needs,” said Mr Bradshaw. “Without them, many farmers will remain in survival mode rather than investing in the future of food.”
Treasury holds its ground
Despite industry lobbying, hopes for a U-turn appear slim. Speaking on BBC Radio 4’s Farming Today, farming minister Dame Angela Eagle ruled out any alteration to the planned inheritance tax reforms, saying:
“The announcements have been made and the situation will be as it was announced. Despite some of the speculation in the press, there is no likelihood that that will happen.”
She insisted that ‘more than three-quarters of estates will not pay any IHT’, while the rest will pay ‘half the inheritance tax most people pay’.
Tax experts have questioned those claims. Stuart Maggs, head of tax at Howes Percival LLP, described the minister’s stance as ‘deeply disappointing’ and warned that the government was underestimating the damage.
“This change will be devastating to the farming industry,” he said. “People’s businesses will be rendered unable to operate as a result. The Treasury appears to have ignored both the economic and humanitarian consequences.”
Alternative approaches emerge
Industry groups continue to back an alternative framework put forward by the Centre for the Analysis of Taxation (CenTax), which proposes a ‘minimum share rule’ to focus tax relief on genuine working farms.
Under the CenTax model, full relief would apply up to £5 million per person (£10 million for couples) where at least 60% of an estate comprises agricultural or business assets. Relief would then taper to 50% between £5m and £10m, with no relief beyond that threshold.
Supporters say the scheme could double Treasury revenue from £500 million to £1 billion while safeguarding thousands of family farms.
The National Sheep Association (NSA) has publicly backed calls for the government to review the proposals. Chief executive Phil Stocker said the reforms ‘risk serious impacts on many working family farms where profitability bears little relationship to asset value’.
“With the Autumn Statement around the corner,” he added, “it’s surely time to re-examine the current proposals and construct something that is fit for purpose.”
Market in limbo
The uncertainty is also rippling through the land market. According to the latest Knight Frank Farmland Index, the average price of bare agricultural land in England and Wales fell 1.6% in the third quarter of 2025 to £8719 per acre, down almost 7% year-on-year but still 24% higher than five years ago.
Market activity has slowed to a crawl, with only around 90,000 acres publicly advertised this year. Many buyers and sellers are waiting to see what the Chancellor decides.
“We largely find ourselves in the same place as last year,” said Will Matthews, head of farms at Knight Frank. “Everyone’s hoping things can’t get any worse, but a growing number are starting to worry they possibly could.”
Land agents report that clients are restructuring ownership or succession plans in anticipation of the new IHT regime, but few are moving forward with sales or valuations until after the Budget.
Political fallout
Rumours of possible concessions had circulated earlier this autumn, but those hopes have now been dashed. The confirmation has triggered anger among farming groups and opposition politicians alike.
Tim Farron, Liberal Democrat environment spokesperson, said he was: “Worried that any minor concession could come at the cost of huge cuts to Defra’s spending.”
In Scotland, shadow rural affairs secretary Tim Eagle branded the government’s stance ‘a devastating blow’, accusing ministers of having ‘no understanding of the rural way of life’.
Grassroots activists have also announced further protests. Farmers For Action organiser Alan Hughes said: “We will be doing more actions, including a coordinated protest on October 31 and go-slow tractor demonstrations on November 24. Thereafter, there will be a winter of discontent.”
He warned that without meaningful engagement from government, ‘the relationship between farmers and Westminster may be beyond repair’.
Waiting for clarity
Despite the gloom, analysts say farmland values remain resilient by historical standards, underpinned by strong demand for high-quality arable and pasture land. And many believe that any price correction will be temporary if confidence returns.
“There’s a strong possibility that the IHT changes could be reversed after the next General Election,” said Mr Matthews. “By then, farmers may well be feeling more confident again.”
For now, though, the focus is firmly on November 26. With food security, investment, and succession planning all hanging in the balance, farming leaders say this Autumn Budget will be a defining test of whether the government truly values British agriculture.