Fiscal reform now to help farmer collaboration

FARMERS NEED government to reform tax and corporate law if they are to make the most of collaboration, a new report from English Farming and Food Partnerships has found.

Without it, farmer-controlled businesses will be deprived of crucial investment and innovation.

At present, UK farmers face legal barriers to capital intensive collaboration which farmers in other countries are spared.

For instance, the money subtracted by milk co-ops from members’ milk cheques to fund expansion is still taxed as if the farmer had received it.

Another problem, according to Dr David Oglethorpe, who managed the study at EFFP, is the £20,000 limit to member investments, which forces co-ops to turn to banks for money.

EFFP also wants to see better advice for farmers on legal and tax issues.

Dr Oglethorpe said the issues had already been tackled in countries like New Zealand, home of the mighty Fonterra dairy co-op, and in the US.

Both countries allow FCBs to distinguish between institutional investors and farmer investors, for instance.

“Legislative and fiscal innovation to encourage collaboration is happening in the farming and food sector abroad and in other sectors at home,” said Dr Oglethorpe.

“The rest of the world is moving – so must we.”

The next step is to discuss the study’s findings with civil servants and raise awareness of the problems, he added.