Starmer's vision quest

[First Aspect]

If we want farmers to work for the public good, we should pay them to do that.

Wait, what?

 

[PurplePenguin]

It did strike me at the time that when they first mooted this, they didn't push the idea that taking the heat out of the agricultural land market could be beneficial to farmers who actually want to buy land as a means of producing food profitably. I suspect, OTOH, a lot of borrowing has been predicted on astronomically high land prices: the farmers I know/have known I suspect all to often add in a massive premium above the direct return, because of an aspirational aspect of increasing the farm size, whether or not the expansion will actually provide a proportional return.

I looked at buying some land recently. 11 acres was £95k. it didn't have any water, was low quality and had a footpath going across it. One of the local farmers bought it and is now using it to graze sheep. The economics of this just don't add up to me.

 

[Psamathe]

The change that was needed is simple. If you own the land and farm it, it is exempt.

I being a farmer as black and white as HMRC would need? What if you just work in an office and employ others to drive tractors? What if you work part-time in an office and employ others to drive tractors. What if your farm is a business and you manage that business or even have other managers helping you manage ...

Or why not just make your farm a business and pass ownership of that business to those who will inherit and no liability (declining liability reaching zero after 7 years).

Or become a Royal and no liability for anything, anywhere at any time.

 

[Psamathe]

Transfer the ownership in a timely manner?
If daddy farmer is in his 70s then they are doing it wrong. He doesn't have to retire, just not be the owner.

That why I can't understand what all the objections from farmers are all about. Any business with assets at that level would be taking even basic estate planning and it wouldn't be a problem.

 

[Psamathe]

So if he transfers the business at say 60, he isn't then entitled to any of the profit as he doesn't own the business. It would also sit in his estate for at least 7 years from the date of transfer.

Lots of ways he can take the profits. eg be an employee of the company with a guaranteed bonus linked to the profits.

 

[CXRAndy]

I looked at buying some land recently. 11 acres was £95k. it didn't have any water, was low quality and had a footpath going across it. One of the local farmers bought it and is now using it to graze sheep. The economics of this just don't add up to me.

Arable farm land is approx £10k and upwards per acre.

Sheep grazing is around £1 per ewe or £100 per season. Depending on quality 10-50 sheep on a rotational basis.

He probably got it for far less than you assume.

Some landowners are getting silly with their demands, uplift clauses for in perpetuity.

 

[PurplePenguin]

Arable farm land is approx £10k and upwards per acre.

In this case it was £8.6k/acre. It didn't help the economics.

 

[CXRAndy]

In this case it was £8.6k/acre. It didn't help the economics.

Long, long term investment

 

[Pross]

If we want farmers to work for the public good, we should pay them to do that.

Wouldn’t that come naturally if supply reduces?

 

[PurplePenguin]

Wouldn’t that come naturally if supply reduces?

The food would just get imported.

 

[Psamathe]

Re: Farm Tax Perks
Seems to me it's just an indirect way of subsidising food prices except it gets more complex as there are so many steps between production and consumption taking profits that it's not necessarily subsidising the consumers.

 

[CXRAndy]

Farmers get a tiny percentage of the end product price, compared to the supermarkets, who take the lions share of the profits.

If supermarkets weren't able to drive down the prices of everyday food commodities.

Adding just a few pence per pint of milk would transform farms from breadline businesses into profit making. Able then to reinvest and improve their business

 

[briantrumpet]

I looked at buying some land recently. 11 acres was £95k. it didn't have any water, was low quality and had a footpath going across it. One of the local farmers bought it and is now using it to graze sheep. The economics of this just don't add up to me.

Nor me, unless they just had £95k lying around which they wanted to expand the farm with (size, if not profitability), which seems unlikely.

 

[Ian H]

Wouldn’t that come naturally if supply reduces?

There's a lot more than food involved.

 

[midlandsgrimpeur]

Below is an old article but still relevant. Ignore the Brexit stuff, I am not making a Brexit argument. Look at the parts around food security and self sufficiency. The biggest issue for farmers is not really IHT, it is the food supply, food pricing, supermarket dominance and so on.

https://www.theguardian.com/global-...ing-britains-food-supply-manifesto-jay-rayner