Pressures could spur resurgence of farm shops

That's the view of the Farm Retail Association who said  proposed Inheritance Tax (IHT) reforms, coupled with existing economic pressures, could trigger a significant shift in the agricultural landscape.

The planned reforms to Agricultural Property Relief (APR) could force farms to sell up to 20 per cent of their assets each generation, severely impacting their long-term viability. 

This comes at a time when farmers are already struggling with razor-thin profit margins (averaging just 0.5 per cent) and rising costs exacerbated by global conflicts, extreme weather, and other variables. 

The average UK food spend has also dropped significantly since the 1970s, from 30% of income to just 11 per cent in 2022, further squeezing farmers' incomes as major retailers drive down food prices.

A recent survey of the Farm Retail Association's members revealed that IHT reforms, minimum wage increases, and National Insurance increases are their top concerns. 

This confluence of short-term and long-term pressures could lead to farm closures and a decline in domestic food production, raising concerns about UK food security, directly contradicting the concerns of the government's November Food Security Report.

"These challenges are pushing farmers to the brink," says Emma Mosey, Chair of the Farm Retail Association. 

"While we may see some farm shops close due to these pressures, we also anticipate a rise in diversification. 

"Farmers may increasingly seek to control the price of their produce by selling directly to consumers through farm shops and farmers markets.  

"During the 1970s, when inflation was high and cost pressures similar to the present, we saw many farmers diversifying into pick-your-own and other direct farm gate sales.  

"Any farmers who are considering diversifying should get in touch with us: we are a flourishing industry and welcome new entrepreneurs to join us in our campaign to champion UK food."