Older farmers are being encouraged to retire and hand over farms to the younger generation under controversial recommendations in a new report.

The Future of Farming Review Report has called on the farming industry, charities and government to come together and consider practical actions to support ageing farmers to exit or retire.

The report, published on Tuesday (9 June), said direct payments under the CAP were offering older farmers continued payments, simply for occupying land.

Other factors encouraging farmers to remain in agriculture were included in the inheritance tax framework and tenancy succession laws where there is “no incentive to transfer the tenancy to a successor early”.

One recommendation would see tax legislation gradually introduced to make 100% agricultural property relief (APR) from inheritance tax unavailable to farmers occupying property after a certain age, say 70. At a similar age, the report also recommends tenants should be required to hand over the farm tenancy.

Lead author David Fursdon said: “If there is an APR restriction or a tenancy succession restriction at the age of 70, it would start to change behaviour. Farmers would think about succession planning a bit earlier.”

The recommendations will be passed to the Tenancy Reform Industry Group, a specialist body established by DEFRA, for review.

Farm minister David Heath will meet the review group in September to discuss the findings. Thereafter, he could suggest the government changes laws on agricultural holdings.

George Dunn, chief executive of the Tenant Farmers Association, said it was a “great shame” private landlords were taking a short-term view when letting land.

“They seem to have one eye on taxation and another on potential payments through the CAP rather than having both eyes fixed on a long-term approach which provides a viable entry or progression opportunity to an entrepreneurial individual,” he added.

But Carlton Collister, of tax adviser Landtax, felt the suggestions were “ageist”.

“Some farmers are very active well into their 80s. To draw a line on this at a set age is ageist. This is not a job, it is a way of life and if you take that away from a person it can accelerate the ageing process.”

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