Labour and the farmers: it’s all about the land

Farming is a bloody tricky business. Farmers are hostage to a changing environment, making agriculture an impossible balancing act. But they are also hostage to political fortune. It turns out Brexit has been a nightmare—because little to no thought was given to its repercussions for agriculture. And now, as Rachel Reeves’s recent Budget has painfully made clear, this disconnect is only worsening among those on the Labour front benches. Today, farmers face hurdles that are largely invisible from Whitehall but all too real in the fields. On Tuesday next week, this will change as thousands of farmers plan to descend on London and Whitehall. 

For years, British farmers could rely on the security of EU support through the Common Agricultural Policy (CAP), which provided subsidies that (just about) balanced tight margins and ensured British produce remained competitive in European markets. But Brexit cut that lifeline. Now, with new trade barriers, export red tape, and the prospect of lower domestic subsidies, British agriculture is navigating choppy waters. The government promised to replace CAP with the Environmental Land Management Scheme (ELMS), but its rollout has been slow, uncertain, and frankly disastrous, leaving farmers in a prolonged period of financial limbo.

Enter Rachel Reeves. Her proposed changes to inheritance tax on farmland—ostensibly a measure to close tax loopholes for wealthy rural landowners—seem to have farmers firmly in the crosshairs. The first £1 million in agricultural assets remains exempt, but anything over that threshold now receives only 50% relief, with an effective tax rate of 20% on the excess. The policy might look fair on paper, but in the fields, it reads more like a raid on those least able to absorb it.

The Treasury’s estimates suggested that only about 70% of farms would be affected, but this calculation, it turns out, was based on shaky definitions. Some properties labelled as “farms” are essentially houses with a bit of paddock—a far cry from genuine working farms. In practice, even DEFRA has admitted these figures blur the line between landowners who dabble in rural life and those who truly work the land. To lump these two groups together is to misunderstand farming in Britain.

The real farmer—the one with their income tied to the harvest, who spends early mornings in welly boots, hedging bets against rain or drought—stands to lose the most. Reeves’s policy makes no distinction between a rural property owner and a farmer scraping by on unpredictable yields. Here lies the disconnect: farming is not just a countryside address with a scenic view. It’s a way of life, defined by long hours and often low returns, but rooted in land stewardship and food production.

If you listen to farmers now, it’s clear the situation has escalated beyond frustration. Some are on the brink of outright revolt. As one farmer told me recently, “If Just Stop Oil can close a section of the M25, farmers can shut down motorways, supermarkets, ports, and petrol stations with relative ease.” And it’s not just about the inheritance tax changes. Farmers have been battered from all sides by new policies: a carbon tax on fertiliser, early cuts to the Basic Payment Scheme (BPS), increased employers’ National Insurance, and even a tax on pickup vehicles. In the short, medium, and long term, British farmers have been systematically worn down. The UK’s centralised production for supermarkets means some of the lowest food prices in Europe, while Brexit has left farmers with the least protected agricultural system in the region. This latest raid on their way of life feels like a final insult. When you’re being hit from every angle by every government, it’s no surprise you start to feel targeted.

But at root, this is about more than taxation—it’s about the inflation of farmland itself. British land prices have been soaring for decades, and it’s got little to do with what the land can produce. Since the 1950s, farmland values have surged ahead of inflation, becoming a desirable asset for those looking to hedge against financial volatility. Two decades ago, an acre might have cost around £2,000. Today? Try £10,000 to £12,000, and even more if you’re after prime arable land. Farmland has become “green gold”, an asset class unto itself, more stable than the stock market and just as sought after. UK land is an asset bubble that never seems to burst. 

It’s hardly surprising that many in rural Britain see Reeves and Starmer as pantomime villains—the ultimate urban elite, ignorant of the realities beyond the M25 but quick to tax the land. To the farming community, they’re emblematic of a Labour government detached from the soil yet all too eager to sow new taxes. It’s fuel for those, on the Left and Right, itching for a “them vs. us” showdown: countryside versus North London, the welly boots versus the avocado toast brigade. 

John McTernan, a senior Labour figure of the Blair era, poured fuel on the fire this week when he told GBNews that “we don’t need small farmers” and “this is an industry we can do without”, threatening to “do to farmers what Margaret Thatcher did to the miners”. Even at the COP29 summit in faraway Baku, Sir Keir Starmer was quick to distance himself from McTernan’s comments — but the damage was done.

Yet this isn’t the moment for a cultural skirmish between town and country. If anything, these issues demand a serious conversation, not a fight.

If Ms Reeves were to step out of Whitehall and speak to the people who know the land, she might grasp the real damage her policies will cause. She may imagine herself taxing the likes of Sir James Dyson or Jeremy Clarkson, but those in the crossfire are far removed from such wealth. They’re family farmers with land worth millions on paper but who are lucky to clear a profit of £15,000 a year. For them, the farm isn’t just an asset; it’s a legacy, something they plan to hand down, not cash in on. To sell it would be an unthinkable defeat, an erasure of identity and purpose.

Sitting comfortably in 11 Downing Street, the Chancellor may see herself targeting rural multi-millionaires. But her policies don’t hit them; they hit the real farmers—people she likely didn’t even consider when drafting her plans. What she’s raiding isn’t an abstract source of rural wealth but a way of life. Her intentions may be well-meaning, but the consequences are painfully real, landing hard on those who are barely scraping by.

The irony is, for most farmers, the land’s worth isn’t tied to what it can produce. Farmland is becoming a  financial asset rather than a place where food is produced. Investment banks, affluent individuals, and lifestyle buyers have fuelled a cycle where farmland is valued for its stability, not for its crop yield. When Dyson or Clarkson snap up swathes of countryside, they’re not doing it for the love of the soil. Clarkson himself has admitted he bought his Cotswolds farm not out of passion for farming but as a safe investment. Only after his farm manager retired did he think about stepping into the farmer’s boots, for a few giggles on a reality TV programme, discovering that while the land appreciated beneath him, the business of farming itself barely broke even.

And so, we find ourselves in a strange situation: the real “product” of British farming isn’t food but the land itself. Genuine farmers—the ones labouring to produce food—are edged out by investors treating land as a stable investment. Reeves, in her attempt to target rural wealth, has inadvertently aimed squarely at the very people she should have intended to support.

I have written before that Reeves’s success as Chancellor should ultimately be measured by whether she is able to rebalance the UK economy between rampant asset inflation and low labour-linked growth. What’s happening with farming is the perfect example of this imbalance. Farmers, who on paper are worth millions in assets, can barely make ends meet in reality. It says so much that Reeves can’t even see the problem, let alone do anything about it.

If British farming is to survive, policymakers must see land for more than its financial worth. Farming is about people who work the soil, who produce the food on our plates, who sustain rural economies. The policies we create should support these farmers, not those who see farmland as a financial shelter. Rachel Reeves has the opportunity to do just that: to distinguish between those who merely own the land and those who work it. If she can recognise the real value of the land lies in its productivity, not in its portfolio potential, she’ll not only support farmers but preserve a way of life that is far more fragile than it seems from the high rises of London.

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