Batters’ Farm Profitability Review finally published
© NFU Defra has published Baroness Minette Batters’ long-awaited Farm Profitability Review, ending months of uncertainty over when the document would see the light of day and reigniting debate over the future direction of agricultural policy.
The 155-page review (PDF), commissioned in April and submitted to government on 31 October, sets out 57 recommendations aimed at redefining how government works with the farming sector and improving long-term profitability, resilience and food security.
Its publication, on the last day before Parliament breaks for Christmas, prompted accusations from Conservative MPs that ministers were attempting to minimise scrutiny.
See also: Baroness Batters sheds more light on profitability review
During a House of Commons session on questions to Defra secretary Emma Reynolds today (18 December), shadow farming minister Robbie Moore accused the Labour government of tactically burying Baroness Batters’ profitability review until after the Autumn Budget and second reading of the Finance Bill.
“All in the knowledge that whatever the recommendations, this government’s financial assault on our farmers was locked in. What message does this send to our hardworking farmers?” he said.
Ms Reynolds defended the government, saying: “I am proud that this government commissioned Baroness Batters to do this review into farm profitability, which is a lot more than they [the Conservatives] managed to do in 14 long years.”
She added that the government will be taking forward a number of recommendations, including planning reforms to diversify farms and reduce barriers, establishing a Farming and Food Partnership Board, building profitability in key sectors, and boosting private finance for farming.
Defra says the partnership board will focus on removing barriers to investment, improve how the supply chain works, and unlock growth opportunities across different parts of primary production and processing.
It will also have a clear emphasis on supporting agricultural productivity, homegrown British produce and strengthening food security.
But in a statement, shadow Defra secretary Victoria Atkins MP accused the government of failing to deal with the single biggest issue facing farming – inheritance tax.
She said the creation of another quango is “the very last thing that farmers need”.
“In her report, Baroness Batters admits that the farming sector is ‘bewildered and frightened of what might lay ahead’ because of the vindictive family farm and family business taxes,” she added.
“It’s no wonder that government have buried this report until after their disastrous Benefits Street Budget and sneaked it out on the last day of term.”
‘Read review in full’
Baroness Batters thanked respondents to the review and encouraged that it be read in full.
“I’m pleased that the secretary of state recognises the need to establish a new approach to growing the British brand at home and abroad by producing, creating and selling more from our farms in a measurable way,” she said.
“With ever more extreme weather, the horrific, ongoing war in Ukraine and 69.7 million people in the UK, now is the time to deliver food security as national security.”
- Working with the Ministry of Housing, Communities and Local Government to make food production a clearer priority in the planning system
- Proposing changes to the National Planning Policy Framework to speed delivery of key infrastructure such as on-farm reservoirs, greenhouses, polytunnels and farm shops
- Stepping up action on supply chain fairness, including continued scrutiny of unfair practices and consideration of changes to groceries code adjudicator oversight
- Tackling barriers to private finance to attract investment into farm transformation and productivity
- Supporting exports and new markets, with ministers leading trade missions showcasing British food and drink overseas.
Ms Reynolds said the government will respond in full to the review in the new year. Its full response will feed into its 25-year farming roadmap, intended to give farmers greater clarity and confidence to invest.
Reaction to the review
Farming organisations have delivered an early verdict on the review.
NFU president Tom Bradshaw welcomed the “thorough and complex report” and stressed the need for reform to address geopolitical uncertainty, trade deals, extreme weather, price volatility, and the “unfair family farm tax”.
He highlighted farming’s economic importance, “the bedrock of the nation’s largest manufacturing sector, worth £153bn and supporting more than four million jobs”.
Mr Bradshaw urged Defra to act on key priorities, including profitability, planning reforms, supply chain fairness, exports, and private finance.
The Tenant Farmers Association (TFA) congratulated Baroness Batters on delivering a “thorough, pragmatic and detailed” report, with key messages for government, planners, the supply chain and farmers “which we must now grasp together to deliver”.
TFA chief executive George Dunn said the new Farming and Food Partnership Board “must become a true workhorse for change”.
Mr Dunn said the TFA welcomes Baroness Batters highlighting long-standing concerns, including the need for secure, long-term agricultural tenancies to boost investment and environmental outcomes, and tackling poor conduct in the landlord-tenant sector.
But Mr Dunn urged government to “take off its blinkers” and make sensible and well thought through amendments to its planned inheritance tax reforms in order to “bring forward that much needed security of tenure”.
IHT farm profits crunch
The Country Land and Business Association (CLA) said the report shows a need for closer collaboration between farming, industry, and government, and more clarity for farm businesses seeking growth and investment.
CLA president Gavin Lane said: “As this report highlights, profitability across the sector is perilously slim, with farmers battling high input costs, low commodity prices and volatile weather conditions.
“Many farm businesses are marginal or loss-making, yet will soon be hit with unaffordable inheritance tax bills, which in many cases will dwarf their annual profit.”
IHT changes – what the review says
The report makes only a few references to inheritance tax, but Baroness Batters includes the following box in which she notes that the policy is a “major issue”, adding that she has “great sympathy” with farmers who will be affected by it.
“Over the course of my review, the forthcoming changes to agricultural property relief and business property relief from inheritance tax (IHT) were raised as one of the most significant concerns.
“Changes to APR and BPR will also impact tenant farmers.
“The value of tenancies, including machinery, crops, and working capital of the farm business, will be subject to the relief cap.
“The overwhelming reaction of the industry to the IHT changes has attracted enormous media coverage, with thousands of people marching in London and tractor protests outside Parliament.
“IHT has also been raised by respondents to the farmer opinion tracker, with some farmers saying changes to IHT would disincentivise investment.
“The change to IHT is a major issue for the sector and I have great sympathy with their concerns.
“The issue has been well-debated, and there are some interesting counter proposals which raise revenue and might encourage investment in farming.
“It has been made clear in my terms of reference that is not for me to offer proposals to the government on IHT.
“However, I could not write this report without reference to it.”