Farming sees good and bad in Budget 2009

This week’s Budget has attracted a mixed response from the agricultural industry, with some parts welcomed (extension of agricultural property relief) and other parts derided (increases in fuel duty).


The following is a sample of the reaction:


“Some of the measures announced today will help, though it is important that agriculture and horticulture are not over-looked, especially the role they can play in renewable energy. However, there was a sting in the tail with an announcement that an additional £75m of savings will be found within DEFRA bringing total cuts to the department of £381m under the Comprehensive Spending Review.” Meurig Raymond, NFU deputy president


“Today’s announcement of £1bn to tackle climate change may help the many rural and agricultural businesses already involved or interested in small-scale energy generation, energy efficiency and low-carbon business practices. The wider business stimulus package of £750m to be targeted at emerging technologies and regionally-important sectors could also be of note. Farmers have benefited from biotechnology developments over many years and investment in this sector may bring further benefits down the line.” Jim McLaren, NFU Scotland president


“The current economic climate, coupled with rising oil prices and a lack of investment in alternative fuel opportunities, has resulted in a significant increase in overheads for primary producers who cannot pass these costs up the marketing chain. The Chancellor must scrap next September’s fuel duty rise because it gives us such an unfair playing field over many of our competitors. There is no doubt every commodity that has to be transported to the rural areas will cost us much more in the future.” Gareth Vaughan, FUW president


“Buried deep in the detail of the Budget the bombshell that, from the 2010/11 tax year, the special tax privileges designed to encourage landlords to provide furnished holiday lodgings will be scrapped. This destroys a political consensus that has existed since 1983 that it was right to make UK property available to holiday-makers. You would have expected such a major tax change to have deserved an explanation in Mr Darling’s Budget speech.” Henry Aubrey-Fletcher, CLA President


“The decision to extend agricultural property relief to land in the European Economic Area could offer a boost to UK investors looking to buy farmland in the EU. Although such land already qualifies for Business Property Relief, allowing APR will offer tax benefits to those planning to rent out the land rather than farm it in-hand, because let land does not qualify for BPR. Let land, however, must be owned for seven years to qualify for APR, so the benefit really only applies to longer-term investors.” Andrew Shirley, head of rural research, Knight Frank


“We’re disappointed that the Chancellor did not do more to help self-employed people and those running businesses. A number of simple measures would have provided a real boost for rural families. The £3,600 threshold for non-earners’ pension contributions has not increased since its introduction in 2001, and is falling way behind the level needed to meet the retirement needs of rural people.” Sean McCann, NFU Mutual tax specialist


For a Farmers Weekly comment on the Budget, see Phil Clarke’s Business Blog