Tractors in Whitehall

[00:00:00] The Why Curve, with Phil Dobbie and Roger Hearing.

[00:00:04] Tractors in Wghitehall.

[00:00:05] Claims the government doesn't get farming.

[00:00:07] Those who work the land say they won't be able to hand it on to their children.

[00:00:11] And it's not just the inheritance tax.

[00:00:13] The lessening of subsidies.

[00:00:15] The import of cheaper food from countries with lower health and welfare standards.

[00:00:19] And the rise of corporate-owned megafarms.

[00:00:21] Is it worth being a farmer in modern Britain?

[00:00:24] The Why Curve.

[00:00:26] So I wonder whether, you know, all this stuff about the threshold,

[00:00:30] this £1 million and beyond that...

[00:00:33] On the inheritance.

[00:00:34] On the inheritance.

[00:00:35] You can't help feeling that that seems quite a low amount of money, doesn't it?

[00:00:39] It does, but I think, I mean, they've put out some figures.

[00:00:42] And the figures are very controversial.

[00:00:45] A lot of people say, no, these are not right.

[00:00:47] This isn't going to happen.

[00:00:48] I don't think anyone understands them either.

[00:00:50] How does that £1 million become £3 million?

[00:00:51] How do you tell a farmer, you know, get a good accountant

[00:00:54] who's going to work all this out for you?

[00:00:55] Yeah, and what's the value of the livestock?

[00:00:56] What's the value of all the other things on it?

[00:00:58] No, I mean, it's clearly complicated.

[00:00:59] But there's a wider issue, which is just how far farmers are part of the economy,

[00:01:05] I suppose, as well as part of society.

[00:01:07] You know, should farms be subsidised?

[00:01:09] Should they be seen that they have to churn out enough food to make a profit?

[00:01:13] Or do we say, look, if they're not commercially viable,

[00:01:15] then we will buy from overseas, where it might be cheaper.

[00:01:18] In which case the countryside reverts to, I don't know, being wild, I suppose.

[00:01:22] Rewilding.

[00:01:22] Which is not really what we want.

[00:01:24] Well, some people would say it might.

[00:01:26] Some of it might be.

[00:01:26] Could you imagine, you go up to the Lake District or the Yorkshire Dales

[00:01:29] and you've got all the...

[00:01:29] I mean, the reason they are so beautiful is because of these little packets of land,

[00:01:35] all the dry stone walls all being maintained for farms,

[00:01:38] have been for generations, and it's part of the British heritage,

[00:01:41] but it's living heritage.

[00:01:42] So are we, in our generation and the next generation,

[00:01:45] going to say, all that living heritage stuff,

[00:01:47] we're just going to get rid of it now?

[00:01:47] Or we just preserve it as a kind of museum,

[00:01:50] which is effectively what it sounds like.

[00:01:51] It's just a rack and ruin, doesn't it, if you do that?

[00:01:53] I think it's...

[00:01:54] Anyway, it's clearly an issue.

[00:01:55] Now, what is it being...

[00:01:56] Is it worth being a farmer?

[00:01:58] Would young people go into farming now,

[00:02:00] if it has all these problems associated with it?

[00:02:02] It's hard work, isn't it?

[00:02:03] And the Wi-Fi coverage isn't very good out in the field.

[00:02:05] You have to go up horrendous hours in the morning

[00:02:07] and do all kinds of stuff.

[00:02:08] Yeah.

[00:02:09] Well, for my son, that would be fine,

[00:02:10] because he hasn't gone to bed at horrendous hours in the morning.

[00:02:12] But, yeah, I don't...

[00:02:14] So you're sending your son into farming?

[00:02:15] Oh, it might do him the world of good, I have to say.

[00:02:18] Well, half your garden, surely that could work.

[00:02:21] Small holding.

[00:02:22] Anyway, let's talk to somebody who really knows,

[00:02:24] who's Peter Gittins.

[00:02:25] He's lecturer in the Centre for Enterprise

[00:02:26] and Entrepreneurship Studies at Leeds University Business School,

[00:02:29] but he also helps run his own family livestock farm

[00:02:33] in West Yorkshire, and he joins us now.

[00:02:35] So, Peter, I mean, I guess the obvious first question,

[00:02:36] I mean, you are a farmer.

[00:02:38] We keep on hearing farmers saying,

[00:02:40] oh, you know, it's hard work,

[00:02:42] and it seems like it's hard work with very little reward.

[00:02:46] So is it worth being a farmer?

[00:02:48] Why do it?

[00:02:50] In modern Britain today?

[00:02:51] Well, it's a good question,

[00:02:52] and it's a question that many farmers are asking themselves,

[00:02:56] you know, why do it?

[00:02:57] Especially when looking at some of the media headlines

[00:03:00] over the past couple of months and years,

[00:03:04] where you just see a constant bombardment

[00:03:06] of negative media headlines,

[00:03:09] talking about poor profitability,

[00:03:11] increasing bureaucracy,

[00:03:13] and increasing suicide rates within the industry.

[00:03:16] You know, there's all kinds of negative things

[00:03:18] which are constantly talked about in the media,

[00:03:22] but, well, why be a farmer?

[00:03:25] Well, for many, it is a rite of passage,

[00:03:28] so succession dominates within the industry.

[00:03:32] So you're going into the farming business.

[00:03:34] You know, many farming businesses are many generations old,

[00:03:38] and it is an absolute delight,

[00:03:42] and it's a thing of great passage

[00:03:44] to be able to continue and to take on the farming business.

[00:03:50] Other things too,

[00:03:52] so you are custodian of the environment,

[00:03:54] you're a producer of food.

[00:03:56] I believe it's a very respectable and rewarding career.

[00:04:00] You get to work outside.

[00:04:02] There's all kinds of benefits

[00:04:04] to why people want to get into agriculture.

[00:04:08] Yeah, and you've presumably then,

[00:04:10] you've followed on in your father's footsteps?

[00:04:14] Well, so I'm involved in the farming business,

[00:04:16] but my main job is in academia,

[00:04:18] so I'm a lecturer and a researcher,

[00:04:21] and I'm strongly tied to exploring through research

[00:04:25] the challenges facing farmers and other rural entrepreneurs.

[00:04:30] But you have a family farm, don't you?

[00:04:32] Yes, yes.

[00:04:33] So we're an upland farming business

[00:04:37] located in West Yorkshire,

[00:04:39] around about 250 acres.

[00:04:41] We've got 80 head of beef cattle

[00:04:45] and 100 breeding sheep.

[00:04:47] Yeah, so that's a bit of context about me.

[00:04:51] Yeah, but breaking it down,

[00:04:52] I mean, what you said there in your opening,

[00:04:54] you talked about the reasons to be a farmer,

[00:04:55] what it means.

[00:04:57] But fundamentally, in terms of making money,

[00:05:00] it's a business.

[00:05:01] You refer to it as a business.

[00:05:03] I mean, for example, does your farm,

[00:05:04] the farm of your family,

[00:05:06] is it a function of business?

[00:05:07] Does it make a profit?

[00:05:08] Does it turn a profit?

[00:05:10] Do you actually make money from it?

[00:05:12] And is it getting harder to make a profit?

[00:05:14] It does.

[00:05:14] It's certainly getting harder to make a profit

[00:05:16] when you consider some of the external challenges

[00:05:19] within the industry,

[00:05:21] such as the decline in subsidies.

[00:05:22] But, you know, it's an interesting question you raised.

[00:05:25] So you said there, it's a business.

[00:05:27] But yes, it certainly is a business.

[00:05:29] But it's also a lifestyle choice as well for many farmers.

[00:05:32] And because you're strongly working with the family,

[00:05:36] there isn't that immediate separation

[00:05:38] between the farm as a business

[00:05:41] and the farm as a lifestyle.

[00:05:43] And certainly throughout my research interest too,

[00:05:47] when I've been talking to lots of different farmers,

[00:05:49] there's lots of different ways in which farmers run

[00:05:52] and operate their businesses.

[00:05:54] There's some with very traditionalist type mindsets.

[00:05:57] And then there's others who are very entrepreneurial.

[00:05:59] Some are very driven by environmental motives

[00:06:04] and things like that.

[00:06:06] So there isn't that clear separation

[00:06:08] between business and the lifestyle.

[00:06:11] But certainly when looking at some of the industry constraints,

[00:06:16] it is getting more difficult to turn a profit.

[00:06:21] So you talked about subsidies.

[00:06:22] Do they need subsidies to survive then?

[00:06:24] Is that where we went wrong?

[00:06:25] Because of course there are a lot of subsidies.

[00:06:26] And I don't want to make this a Brexit debate

[00:06:30] because we know a lot of farmers actually were in favour of Brexit.

[00:06:32] And maybe they're thinking,

[00:06:33] well, perhaps that wasn't a good idea.

[00:06:34] Now they're looking at the subsidies they're not getting.

[00:06:37] But are subsidies essential?

[00:06:38] I mean, is it an industry that needs a leg up to survive?

[00:06:42] Well, it depends on which agricultural subsector you're looking at exactly.

[00:06:47] So if you look at some agricultural subsectors

[00:06:50] are not really heavily dependent upon subsidies.

[00:06:54] So if you look at poultry farming and pig farming, for instance,

[00:06:57] that's because you can run those farming operations

[00:06:59] without large land sizes.

[00:07:01] But some agricultural subsectors,

[00:07:04] so if you look at upland beef and sheep farming,

[00:07:08] farming in less favourable areas,

[00:07:09] many of those farmers are heavily dependent upon the subsidies.

[00:07:14] So in some cases, subsidies can comprise up to 90%

[00:07:19] of a farmer's annual farm business income.

[00:07:22] And then when you look at profitability and farm income in general,

[00:07:27] that can be a critical challenge for the business too.

[00:07:30] And you could ask then, I suppose,

[00:07:32] perhaps cruelly, but say,

[00:07:33] is it actually worth it?

[00:07:34] If we as a nation putting tax money into subsidising the people

[00:07:39] who produce the food,

[00:07:41] is that the right way to do this?

[00:07:43] Or are there better ways to do it to actually make it a profitable thing?

[00:07:47] Well, yeah, well, we are in the process of reforming the subsidies.

[00:07:50] But so subsidies can play a critical role

[00:07:54] in driving down the end price of goods.

[00:07:58] So if the UK consumers want cheap food,

[00:08:01] and I think we do have cheap food when compared to other European countries.

[00:08:06] So I think subsidies can play a critical role on that front.

[00:08:10] But the problem with the subsidy debate is,

[00:08:14] and this was a key argument with the Brexit debate,

[00:08:17] was around the way that it was paid.

[00:08:20] So it was calculated upon how much land a farmer owned.

[00:08:24] So those farmers who had huge amounts of land,

[00:08:28] especially when you look at the dukes and earls

[00:08:31] and large land-owning families,

[00:08:33] they're receiving millions in subsidies,

[00:08:36] you know, without actually having that agricultural output being delivered.

[00:08:41] So there's all kinds of,

[00:08:42] it's a very complex debate around the subsidies.

[00:08:46] But it sounds like that same debate,

[00:08:48] it's exactly the same debate that the government is trying to throw up there

[00:08:51] about inheritance as well,

[00:08:53] that there are people with farms that are worth many multiples of millions

[00:08:56] that are not necessarily particularly productive,

[00:08:59] who've bought that farmland just as a tax dodge.

[00:09:01] Well, yeah.

[00:09:02] It's difficult to separate, I believe.

[00:09:05] A common phrase you'll hear in the farming industry,

[00:09:08] when talking to small-scale rural businesses,

[00:09:11] is asset-rich, cash-poor.

[00:09:13] And yes, whilst you look at the value of the farmlands,

[00:09:18] yes, it might be millions on paper,

[00:09:21] but when you look at the actual cash flow

[00:09:23] and how much money's coming into the business

[00:09:25] and the actual lifestyle which that farmer has,

[00:09:28] then that paints a wildly different story.

[00:09:32] Yeah.

[00:09:33] And when you were talking earlier about being a custodian,

[00:09:36] I mean, this is an interesting area.

[00:09:37] To what extent are farmers providing a public good,

[00:09:43] you know, looking after the countryside,

[00:09:45] as well, obviously, as producing food?

[00:09:47] And in that sense,

[00:09:48] does it make sense for them to be subsidised

[00:09:51] because they're contributing to society?

[00:09:53] I mean, does that...

[00:09:54] Well, it's also just, you know, the British countryside.

[00:09:56] I mean, the design of the British countryside

[00:09:59] is a farming community.

[00:10:00] If those farms close down,

[00:10:03] then, you know, we've got used to this idea

[00:10:04] almost of a manicured British countryside.

[00:10:07] We'd lose all that if farms closed down.

[00:10:10] Oh, yeah.

[00:10:10] If the decline of the small family farm

[00:10:12] and, you know, if they did close down,

[00:10:15] there would be all kinds of social ramifications.

[00:10:18] And the decline of the family farm

[00:10:20] is something which you see not just in the UK context,

[00:10:23] but in wider Europe.

[00:10:25] So since 2005,

[00:10:26] there's been over 5.3 million farming businesses fail

[00:10:30] right across Europe.

[00:10:34] So with that, obviously,

[00:10:36] there's economic losses,

[00:10:37] but then there's also social implications too

[00:10:41] because farms are often the central hub

[00:10:44] within the wider rural community.

[00:10:47] And there also,

[00:10:48] with that would come the environmental losses too.

[00:10:51] With the new subsidy changes as well.

[00:10:53] So in England,

[00:10:54] we have the environmental land management schemes

[00:10:57] which are currently being rolled out.

[00:10:59] So subsidies now are already at a 50% loss

[00:11:02] and they're going entirely by 2028.

[00:11:06] But the environmental land management scheme

[00:11:09] is currently being rolled out

[00:11:11] and that is paying farmers

[00:11:13] for the production of public goods and services.

[00:11:17] So we're seeing an increase in new schemes

[00:11:20] or agricultural environmental schemes

[00:11:22] where farmers can now look at their parcels of land,

[00:11:25] look at the options and think about,

[00:11:27] well, what can we do?

[00:11:29] What options can we provide?

[00:11:30] Could we engage in tree planting

[00:11:32] around the boundaries of our farm

[00:11:34] or could we engage in regenerative agricultural practices?

[00:11:38] So the subsidies,

[00:11:39] whilst they're going and they're getting phased out,

[00:11:42] or the old subsidies is what we knew,

[00:11:44] the new subsidies and grants

[00:11:47] are coming in through the new environmental land management schemes

[00:11:52] in England.

[00:11:52] Which changes the way, really,

[00:11:54] that farmers are being asked to operate, doesn't it?

[00:11:57] I mean, you kind of get to a stage where

[00:12:00] I've heard people say,

[00:12:01] well, look, you know,

[00:12:01] we can get really cheap food in from abroad.

[00:12:03] You know, yes, maybe the welfare standards,

[00:12:05] environmental standards aren't so good,

[00:12:07] but it's very cheap.

[00:12:08] We can bring that in.

[00:12:09] And farmers become then a kind of,

[00:12:11] almost like the National Trust,

[00:12:12] just kind of keeping things looking nice.

[00:12:14] But that doesn't make sense, does it?

[00:12:16] I mean, if your focus,

[00:12:17] if the subsidies are all entirely on the environment

[00:12:19] and not on, you know,

[00:12:21] helping you to support,

[00:12:22] to run a business,

[00:12:23] to produce food locally,

[00:12:24] I mean, we've seen during the pandemic

[00:12:26] how we need to keep supply chains tighter.

[00:12:28] The idea that we will just get

[00:12:30] cheaper food from overseas

[00:12:31] seems rather short-sighted, doesn't it?

[00:12:33] Does it to you, Peter?

[00:12:34] Well, it changes the very function

[00:12:36] and definition of what a farmer is.

[00:12:39] So the original definition of a farmer

[00:12:41] was somebody who relied on

[00:12:43] the rearing of livestock

[00:12:45] or production of crops

[00:12:47] as their main source of income.

[00:12:49] But now you can own a farm

[00:12:50] and land and produce no crops

[00:12:53] and no livestock,

[00:12:54] but you can still have

[00:12:55] quite a lot of generous payments

[00:12:57] through the agricultural environmental schemes.

[00:12:59] So farming is definitely changing

[00:13:01] and these new policies

[00:13:03] supporting environmental initiatives

[00:13:06] are helping to change the function of...

[00:13:09] Do you think that's a good thing?

[00:13:10] As a farmer yourself...

[00:13:11] Sounds to me like you could be a man

[00:13:12] who works in the city,

[00:13:13] you know, a finance type

[00:13:14] who's just got a bit of money,

[00:13:15] put it in a farm

[00:13:16] and you make sure that you're doing

[00:13:17] the right environmental stuff

[00:13:18] and you get a subsidy.

[00:13:19] You're not a farmer

[00:13:20] that's actually working the land,

[00:13:22] which seems a very sad state of affairs.

[00:13:24] Well, I think with anything like this,

[00:13:26] they will involve trade-offs.

[00:13:29] So yes, you could look at these new policies

[00:13:31] and say, yes, they're very good

[00:13:33] in terms of environmental sustainability.

[00:13:35] They're supporting net zero.

[00:13:37] They're helping to engage in carbon sequestration,

[00:13:41] improve biodiversity and things like that.

[00:13:44] So on that front, they can be very good.

[00:13:46] However, you could look at the social aspects

[00:13:48] and say, well, are we reducing labour?

[00:13:51] Are we taking people from the hills?

[00:13:53] Are we taking jobs from the hills?

[00:13:55] So there's all kinds of economic,

[00:13:56] social and environmental trade-offs

[00:13:58] which can emerge from these policy decisions.

[00:14:02] What do you feel yourself though?

[00:14:04] I mean, you know, you're someone

[00:14:05] who has a stake in farming,

[00:14:07] you have a family farm.

[00:14:08] Do you feel that this is all moving

[00:14:09] in the right direction?

[00:14:10] Well, I think it's always good to make progress

[00:14:14] towards trying to solve some of the bigger problems

[00:14:17] facing society.

[00:14:19] So trying to think about how we can farm

[00:14:21] in more environmentally sustainable manners.

[00:14:24] And you do see very good examples

[00:14:26] of farming practices, you know,

[00:14:28] doing things like regenerative agriculture

[00:14:30] and things like that.

[00:14:32] But I think there's a lot of underlying issues

[00:14:34] within the sector, you know,

[00:14:36] and often this can get overshadowed

[00:14:38] by a lot of this big push on environmental policy.

[00:14:41] So until farmers, you know,

[00:14:44] can earn decent enough living

[00:14:46] from food production and things like that,

[00:14:48] then there's always going to be challenges

[00:14:49] and tensions.

[00:14:51] And that's the area where the subsidies

[00:14:53] are disappearing, you're saying?

[00:14:54] So the subsidies now are almost all

[00:14:57] to do with environmental protection

[00:15:00] and not to the economic sustainability

[00:15:03] of a farming business?

[00:15:04] They seem to be heading in that direction, yeah.

[00:15:06] And of course, England's having its...

[00:15:09] They've got the environmental

[00:15:10] land management scheme

[00:15:11] and then Scotland, Wales, Northern Ireland

[00:15:14] are developing their own as well,

[00:15:16] which is interesting to see.

[00:15:19] But if all that goes through

[00:15:20] and what you're saying is, you know,

[00:15:21] what would attract someone into farming now?

[00:15:24] Maybe if they had a vision

[00:15:25] that they wanted to preserve the countryside.

[00:15:27] But other than that,

[00:15:28] it's not something you're going to make money doing,

[00:15:30] it sounds like, or not much money.

[00:15:34] And as you said, you know,

[00:15:35] a farmer defined as someone

[00:15:36] who essentially grows food

[00:15:38] in one form or another,

[00:15:40] that seems to be edging away.

[00:15:41] So the attractiveness of it

[00:15:43] must be quite limited now.

[00:15:44] No, I agree on that sentiment.

[00:15:48] So, you know,

[00:15:50] when you can get a big city job

[00:15:52] and earn £100,000 a year,

[00:15:55] you know, working a nine-to-five job

[00:15:56] or something...

[00:15:58] That's a start job in the city, by the way, Peter.

[00:16:01] No, but it's a valid thing, isn't it?

[00:16:03] Because I think a lot of people

[00:16:04] that go into farming, you know,

[00:16:06] have recognised that they're okay

[00:16:10] with not making as much money

[00:16:14] as they could in another industry

[00:16:15] because there's other benefits,

[00:16:17] other less intangible benefits to them,

[00:16:20] whether that's carrying on the farm legacy,

[00:16:22] whether that's getting to work outside,

[00:16:24] whether that's having to...

[00:16:26] having a go at being innovative

[00:16:28] but in a rural environment.

[00:16:30] So there's lots of really interesting

[00:16:32] diversification strategies

[00:16:33] farmers can do as well in rural areas.

[00:16:35] And a lot of farmers are having to do that now

[00:16:38] to respond to some of these

[00:16:41] increasing economic pressures

[00:16:43] in the industry.

[00:16:44] But you're seeing it from both sides

[00:16:46] because you've got the family farm

[00:16:47] or you're involved with that.

[00:16:49] And of course,

[00:16:49] you're doing the academic research.

[00:16:50] Do you get the sense

[00:16:51] it's moving in the right direction?

[00:16:53] Do you approve of the way

[00:16:55] in which these things are going at the moment?

[00:16:58] Well, I suppose it depends

[00:16:59] on which particular policy thing

[00:17:01] we're looking at.

[00:17:02] If it's in terms of some of the funding

[00:17:06] for environmental things like that,

[00:17:08] I think that's a good thing.

[00:17:11] But when looking at other policy aspects,

[00:17:14] such as the changes to the inheritance tax

[00:17:17] and things like that,

[00:17:18] then there's some obvious limitations with that.

[00:17:21] Well, let's get stuck into that one, shall we?

[00:17:23] So, I mean, because there's been press reports

[00:17:26] on either side,

[00:17:27] some saying, well, you know,

[00:17:29] if you are a proper working farm

[00:17:30] and that gets passed on,

[00:17:33] by the time you've counted that,

[00:17:34] you know, you're over 1 million.

[00:17:37] By the time you've counted the tax relief

[00:17:39] you get on assets used,

[00:17:41] then, and I don't know what other factors

[00:17:43] they're putting into it,

[00:17:44] they're saying it's closer to a farm

[00:17:46] that's got a value of 3 million

[00:17:47] before you'd end up being,

[00:17:50] you know, not benefiting from this.

[00:17:53] And I think the idea is to try and stop people like,

[00:17:56] we were just talking about Nigel Farage,

[00:17:57] I think his farm is strangely worth 3 million pounds.

[00:18:00] He turned up in Whitehall in a pair of wellies,

[00:18:02] so clearly he knows, you know,

[00:18:04] some of the equipment that's required.

[00:18:07] But beyond that,

[00:18:08] I'm really not quite sure how much of a farmer he is.

[00:18:11] So, do you feel like the government's got it wrong?

[00:18:14] Have they, I mean, is the idea right,

[00:18:16] but the threshold wrong, for example,

[00:18:18] if it was 10 million rather than 3 million?

[00:18:19] Is 3 million just too low an amount for most farms?

[00:18:23] Yeah, well, I think the threshold is a critical issue.

[00:18:27] So, I mean, when this broke in the budget

[00:18:30] and in the news cycle,

[00:18:31] it was at 1 million pound.

[00:18:34] And then with further tax allowances,

[00:18:37] it allowed up to 1.5.

[00:18:38] And then for certain farming businesses,

[00:18:41] if the spouse was actively involved

[00:18:42] in the farming business,

[00:18:43] that would be 3 million.

[00:18:44] Then I heard another academic saying

[00:18:46] potentially 5 million could be exempt.

[00:18:49] But I think within that bracket of,

[00:18:51] you know, one to a couple of a million,

[00:18:53] the bracket is just too low.

[00:18:56] It doesn't take a lot in terms of assets.

[00:18:59] It's in terms of farm assets to go above that threshold.

[00:19:03] I mean, if you just look at land values alone,

[00:19:05] say 10,000 pounds an acre,

[00:19:08] now the average farm is 88 hectares here in the UK.

[00:19:12] You know, and that's without the farm building,

[00:19:17] that's without the farmhouse,

[00:19:19] that's without the livestock and the equipment.

[00:19:22] You know, it's so easy to go above that threshold straight away.

[00:19:26] So there's all kinds of issues there.

[00:19:30] A lot of farmers as well, as you'll probably know.

[00:19:33] So four in 10 UK farmers are over the age of 65.

[00:19:37] Farmers are by no means experts on the legal sides of things.

[00:19:42] Many farmers have not even considered having,

[00:19:46] they're not even considered putting into place

[00:19:48] a formal succession plan in their farm.

[00:19:52] So, you know, this is a huge thing to many farming businesses.

[00:19:56] It's an impost on them, isn't it?

[00:19:57] Yeah, do you think this will actually effectively kill off a lot of farming?

[00:20:00] But I wonder, but also, is there a better way then?

[00:20:02] So a higher threshold.

[00:20:04] I also feel like if this is workable land,

[00:20:06] if the idea is to try and stop people buying up land

[00:20:09] just as a tax dodge for those people who are earning,

[00:20:13] you know, ultra millions in the city,

[00:20:18] maybe there's a way that you can say,

[00:20:19] well, okay, let's test if it is a working farm.

[00:20:22] You've got, you know, there'll be a ratio

[00:20:23] of what the value of the farm is

[00:20:26] versus what the expected turnover is.

[00:20:28] That'll be a very low ratio

[00:20:29] because I'm sure, you know, as you say,

[00:20:32] asset rich, cash poor,

[00:20:34] but there would be, at least you could show

[00:20:35] that you're doing some work,

[00:20:36] it's creating some money.

[00:20:40] So if you've got a £5 million farm

[00:20:43] and it's turning over £50,000 a year,

[00:20:46] then, you know, that probably is a tax dodge.

[00:20:48] Yeah.

[00:20:49] Well, if you look at a £1 million farm,

[00:20:51] so those farmers below that threshold,

[00:20:54] £1 million will barely get you a smallholding.

[00:20:57] So that's something to consider.

[00:21:00] I think there is much better ways to go about this.

[00:21:04] So in terms of looking at income and profit

[00:21:07] and how much farms produce,

[00:21:09] I know there's been some discrepancies as well

[00:21:12] around the statistics.

[00:21:14] So I know Rachel Reeves claimed that only 25% of farms

[00:21:19] will be affected,

[00:21:20] so mainly the big landowners.

[00:21:23] DEFRA has a different statistic on this.

[00:21:26] The NFU has done a different analysis

[00:21:29] in the past couple of days.

[00:21:30] They're claiming around about 75% of farms

[00:21:34] will be affected by this.

[00:21:35] So there's something up, isn't there,

[00:21:39] with what data is right, what data is wrong.

[00:21:42] Would your family farm be affected by this?

[00:21:47] I'd have to look into the figures a little bit.

[00:21:50] But it's a concern that you and the family...

[00:21:52] But if it was, what would happen to your farm?

[00:21:56] You'd have to sell up?

[00:21:57] Yeah, well, that would be the reality of many farmers.

[00:22:01] You know, if they're having to pay a £200,000 tax bill,

[00:22:06] and even with a generous 0% interest rate

[00:22:11] and 10 years to pay that back,

[00:22:13] looking at the profitability of farming businesses,

[00:22:17] this is too much for many farmers.

[00:22:19] It would result...

[00:22:20] It's still £20,000 a year, isn't it,

[00:22:21] out of, you know,

[00:22:22] I don't know how much they'll be making,

[00:22:23] but I'm sure they'd feel that.

[00:22:24] It would result in the forced sale of assets,

[00:22:27] and if you are ever required to sell something,

[00:22:32] in the heat of a moment,

[00:22:33] you're probably not going to get the best price as well,

[00:22:36] and people are not going to look at you

[00:22:38] and try and give you a good price in that situation.

[00:22:41] So, I think there's a lot of ramifications which could come about.

[00:22:46] And I suspect there's not many people new to farming.

[00:22:48] I suspect most of the people,

[00:22:49] with the exception, obviously, of Nigel Farage,

[00:22:51] who's passionate about it now.

[00:22:53] And Jeremy Clarkson.

[00:22:53] And Jeremy Clarkson, obviously,

[00:22:54] because he happens to do, you know,

[00:22:55] Good Idea for a TV show.

[00:22:57] But I imagine there's not a lot of people,

[00:22:59] you know, as you say,

[00:22:59] it gets handed down,

[00:23:00] it's a lifestyle that gets passed down through the family.

[00:23:03] I suspect there's not a lot of people new to the industry, is there?

[00:23:06] Well, there's always new entrants looking to get in,

[00:23:08] but they're having to buy up the tenter,

[00:23:11] either go down the farm business tenancy route,

[00:23:13] which can be extremely competitive.

[00:23:16] So, there can be about, you know,

[00:23:18] 50 or 70 different applications to take over a tenancy per farm.

[00:23:23] So, just explain how that works.

[00:23:24] So, your tenancy, it's where you obviously don't own the farm,

[00:23:27] you're renting the farm.

[00:23:28] Is that right?

[00:23:28] Yeah.

[00:23:28] Yeah, yeah, yeah.

[00:23:29] So, you can apply to take over or to run a farm for a set amount of years.

[00:23:36] Or instead of owning the farm, you'd be an employed team.

[00:23:41] Right. So, that's a very different way of doing it.

[00:23:43] Or is that, how much of that is true of farming generally in the UK?

[00:23:47] And how much is it actually people running their own farms?

[00:23:50] Yes.

[00:23:50] I haven't got the statistics to hand on the ownership versus tenant front.

[00:23:56] But they do have a National Tenants Association.

[00:24:00] Yes.

[00:24:01] And in broad terms, would you say it's more people, owner-occupied,

[00:24:05] you know, running their own farms or more tenants generally?

[00:24:08] Off the top of my head, owners, probably.

[00:24:13] I do know tenant farmers can be particularly constrained.

[00:24:16] I've come across many tenant farmers who have been incredibly entrepreneurial.

[00:24:23] They've been incredibly business-minded.

[00:24:26] But if they wanted to pursue with a business idea,

[00:24:32] they've often been constrained by their landlord.

[00:24:35] And is that, which raises the question of productivity?

[00:24:39] I mean, that would always be, irrespective of what the argument is.

[00:24:41] You know, the one argument against heavy subsidies would be that that impinges on productivity gains.

[00:24:48] You know, it impinges on innovation.

[00:24:49] If you're giving people money, they're just going to keep doing things the same way.

[00:24:53] I mean, is that, I mean, maybe in the case of farming, you have to just keep doing things the same way.

[00:24:57] Or is there room for innovation?

[00:24:58] And is the industry getting more innovative or not really?

[00:25:02] It's an interesting one looking at innovation adoption and technology adoption in the farming sector.

[00:25:11] So, if the farmer, a lot of older farmers have this, you know, traditionalist type mentality.

[00:25:17] And it does vary depending on sector too, where they'll be adverse to adopting new forms of technology.

[00:25:24] And you'll find that younger farmers, perhaps farmers that don't yet own the business, but might do in the future, you know,

[00:25:33] they'll very much embrace these new forms of technology and things like that.

[00:25:37] So, the integration of technology, that can help on the productivity front, help reduce the operating costs and things like that.

[00:25:48] But, again, you've got to think about the social structure of the industry and the demographics, you know,

[00:25:53] four in ten being over the age of 65.

[00:25:56] So, it's waiting for generational change, in other words.

[00:25:58] Which is also going to have an impact on things like what the productivity actually means.

[00:26:02] Because, you know, what you've said about the way in which standards and custodianship of the land and all these sort of things,

[00:26:07] which means you're not just churning out vast amounts of eggs or beef or whatever it is.

[00:26:12] It's the added value of the fact that it's up to certain standards.

[00:26:16] It's not damaging the land and all these kind of things.

[00:26:19] I mean, that's really the sector that British farming is moving into, isn't it?

[00:26:22] Yeah.

[00:26:22] And I think with British farmers as well, if you compare British farming standards to standards around the world,

[00:26:28] we produce some of the highest quality commodities with the strongest environmental and welfare standards out there.

[00:26:38] And if you go look around the agricultural shows or you go talk to the breed societies

[00:26:42] and you go talk to farmers and, you know, you explore their practices

[00:26:46] and they're doing outdoor extensive grazing practices, grass-fed beef.

[00:26:52] You know, we do remarkable things in terms of what we produce.

[00:26:56] And it would be a shame to lose our, you know, some of our food production.

[00:27:02] So we had a free trade agreement with the United States that saw U.S. beef, for example, coming in unchecked into our country.

[00:27:10] That would be another…

[00:27:12] The chlorine-washed chicken.

[00:27:13] Yeah, exactly.

[00:27:14] All of that coming in.

[00:27:15] I mean, that would be another blow to the domestic industry, wouldn't it?

[00:27:18] I think so, yeah, because especially with the chlorinated chicken thing,

[00:27:24] because that just omits all the good supply chain practice that we currently have.

[00:27:31] So, you know, rather than breeding those chickens in high welfare environments,

[00:27:37] you know, to get to a point where you can just wash it at the end

[00:27:41] and where you can breed them in filth and anything,

[00:27:44] I think that's a terrible way to…

[00:27:46] But it's what works in the market.

[00:27:48] I mean, the thing is, you know, we also export food, you know, into other markets.

[00:27:52] But is the value added by high welfare standards, high environmental standards?

[00:27:58] Does it make sense economically?

[00:27:59] Do people pay premium prices for what we get?

[00:28:02] Well, it depends what market you're looking at.

[00:28:04] So if you're looking at local best markets

[00:28:07] and you're seeing consumers buying at farm shops,

[00:28:11] then, you know, many of those consumers will be willing to pay a higher price for a premium good.

[00:28:17] If you're looking at bigger markets and outside of the UK,

[00:28:21] certain countries perhaps.

[00:28:23] I know there's been a lot of interesting discussions around new trade agreements

[00:28:28] with countries outside of the EU.

[00:28:31] So some Middle Eastern countries are willing to pay a huge premium on land products,

[00:28:38] much more than Europe bears.

[00:28:41] And that was one opportunity from Brexit.

[00:28:45] There are things that can work in that sort of way.

[00:28:47] So it's just, you know, pitching ourselves as producing high quality goods to compete in the international.

[00:28:52] I have to say, when we go shopping, my wife always gets the organic products.

[00:28:56] And if she's not there, I go, yeah, sold out of organic eggs, love,

[00:28:59] because these were half the price.

[00:29:01] Well, that's the problem with the cost of living issues.

[00:29:03] Yeah, that's it.

[00:29:04] A lot of consumers do buy on price.

[00:29:07] And, you know, if you work in the city

[00:29:11] and if, you know, you're facing economic issues,

[00:29:15] which is broadly influenced by the rising cost of living,

[00:29:20] you know, for chickens £4.50 in Sainsbury's,

[00:29:24] you know, are you going to buy that

[00:29:25] or are you going to go out to a farm shop and pay £8?

[00:29:28] And, you know, in that instance,

[00:29:32] quality might not be the most important thing on your mind.

[00:29:36] Price might be.

[00:29:37] So what we're saying overall, I mean, it's interesting drawing this sort of to a conclusion,

[00:29:40] is that farming in Britain, there are reasons to get into it,

[00:29:44] there are reasons to be a good life.

[00:29:47] It's never going to make that much money

[00:29:48] and there's a sense in which we have to see it as a public good

[00:29:51] into which we invest with subsidies or whatever.

[00:29:54] That's just the nature of what we have.

[00:29:57] Is that the right way to see it?

[00:29:58] Yeah, I think that's a good way of looking at it.

[00:30:00] I think the industry will change over time

[00:30:04] and we'll start to see more integration of newer technology

[00:30:09] and newer forms of innovation being uptaked

[00:30:11] and that will help on the cost front

[00:30:16] and help with farm profits.

[00:30:20] But I think right now many farmers are faced with lots of constraints

[00:30:24] and challenges, but I am an optimist at the end of the day

[00:30:28] and I do think there is a future for the industry.

[00:30:31] I don't know if you have children, Peter, but would you encourage them to go into farming?

[00:30:36] They're too young.

[00:30:38] What age to get them involved?

[00:30:40] That's the question, isn't it?

[00:30:41] So look, I mean, it's almost like a,

[00:30:44] I hate to describe you as a piece of living heritage,

[00:30:47] but farmers are in a way, aren't they?

[00:30:49] They're trying to run a commercial business,

[00:30:50] but they are also part of the British lifestyle.

[00:30:53] You know, they're maintaining the environment that we all go and enjoy

[00:30:57] and they are providing the food that we eat,

[00:30:59] you know, to a quality that we expect.

[00:31:02] And if that can't be done on a pure commercial basis,

[00:31:06] then it's not a, you know,

[00:31:08] there's so many aspects of society that it touches.

[00:31:11] It isn't just a pure business, is it?

[00:31:13] I mean, that environmental aspect that we talked about,

[00:31:15] the fact that it is the landscape which makes up so much of the UK,

[00:31:19] is the way it is because of farming.

[00:31:22] And if we're told that, well, you can't have that anymore,

[00:31:24] it's all just going to go to rack and ruin because farms are going to close

[00:31:26] and we're just going to, the whole country will turn wild.

[00:31:30] People would not want that.

[00:31:31] No, no.

[00:31:32] But I think there are a lot of farmers out there who,

[00:31:36] you might look at their farming business and on paper,

[00:31:39] they are not what you'd call economically sound

[00:31:42] and they don't deliver the huge amounts of profits.

[00:31:45] But when you look at their activities

[00:31:48] and what they actually do on a day-to-day basis,

[00:31:50] they exhibit a huge amount of social and public good.

[00:31:56] So even if they're engaging in traditional activities

[00:32:00] from building, out there building dry stone walls

[00:32:04] to training their children, you know,

[00:32:08] about the proper ways or the old ways of doing things,

[00:32:11] they exhibit huge amounts of social and cultural good.

[00:32:17] But it can be quite difficult making the economic case

[00:32:23] for some farmers at present.

[00:32:25] And do they feel appreciated, do you think?

[00:32:27] I mean, you talked about, you know, so many.

[00:32:30] I don't know what the numbers are and I don't know whether it's sort of like

[00:32:33] over and above the usual suicide rate,

[00:32:35] but the fact that people have killed themselves in this industry,

[00:32:37] is that because, you know, it's a difficult fight

[00:32:40] and they don't feel as though they are being rewarded

[00:32:42] or even, you know, acknowledged for the work they do?

[00:32:44] Yeah, well, it's a complex, it's complex looking at the motives for suicide.

[00:32:50] Certainly economic factors will be a part in that,

[00:32:54] but then you've got to think about the other aspects too,

[00:32:57] such as the isolated part of the job,

[00:33:00] working out by yourself every single day,

[00:33:04] forfeiting holidays, forfeiting the urban lifestyle

[00:33:10] and amongst other things too.

[00:33:12] But it's a good life, would you say?

[00:33:14] I mean, you've experienced it.

[00:33:16] Is it a good life being a farmer?

[00:33:18] I think it's a rewarding and virtuous life

[00:33:21] and it's one which should be supported, in my view.

[00:33:26] Well, you can support it next time you're in the country

[00:33:29] visiting by the local farmer a beer.

[00:33:31] That's a good start.

[00:33:31] That's a thought, isn't it?

[00:33:32] Peter, thank you so much for taking us through that.

[00:33:35] And, well, it is interesting, you know,

[00:33:37] to get perspectives on what it is to be a farmer now

[00:33:39] and the rewards that aren't necessarily financial.

[00:33:41] And it sounds like our Chancellor needs to go back to her sums

[00:33:45] and redo them and change the thresholds.

[00:33:47] Good to talk, Peter.

[00:33:48] All right, thank you.

[00:33:49] Thanks for having me on.

[00:33:50] So, farming, a bit of a difficult area, you know,

[00:33:52] should people go into it or not?

[00:33:53] What does it actually mean?

[00:33:54] More difficult, though,

[00:33:55] talking about landscapes around the world.

[00:33:57] Imagine farming in Africa,

[00:33:58] where you've got these vast amounts of land,

[00:34:00] which are just...

[00:34:01] Well, and affected by climate change,

[00:34:04] increasing desertification and flooding

[00:34:06] and who knows what else.

[00:34:07] Yeah, I'll tell you why else.

[00:34:08] You've got dictators,

[00:34:09] you've got, you know,

[00:34:11] you've got economies,

[00:34:12] you've got war,

[00:34:13] economies on the state of collapse.

[00:34:15] Why has Africa always been a problem?

[00:34:17] Well, not always.

[00:34:18] What does always mean?

[00:34:19] But, you know,

[00:34:20] as far as we've been measuring it,

[00:34:22] it is the least developed continent.

[00:34:24] It remains the least developed continent

[00:34:25] in the world.

[00:34:26] Yeah.

[00:34:26] The most troubled,

[00:34:27] the one that provides an awful lot of the people

[00:34:29] who are trying to leave it

[00:34:31] to go to Western Europe if they can.

[00:34:34] And it just seems to go on and on.

[00:34:35] We've chosen it because it's 40 years

[00:34:37] since we all got together

[00:34:38] and bought Band Aid records,

[00:34:40] if we could.

[00:34:42] Did you go to Live Aid?

[00:34:43] No.

[00:34:44] I saw it, though.

[00:34:45] Did you?

[00:34:45] I watched it.

[00:34:46] No, I didn't go.

[00:34:46] No, I went to...

[00:34:47] Shortly afterwards,

[00:34:48] there was another concert.

[00:34:50] I can't remember what it was now.

[00:34:51] It was the Amnesty International

[00:34:53] did a similar one,

[00:34:54] which I went to,

[00:34:55] which was almost as good,

[00:34:56] but not quite Live Aid.

[00:34:57] But the whole idea of, you know,

[00:34:58] let's raise some money

[00:34:59] from selling some music

[00:35:00] to give to the poor,

[00:35:01] benighted people of Africa.

[00:35:02] I mean, that whole model

[00:35:03] just seems so absolutely dated

[00:35:05] and patronising and awful, really.

[00:35:09] But what happens...

[00:35:10] But we all got behind it.

[00:35:11] I mean, at least we had

[00:35:11] awareness of the issue.

[00:35:12] Now it feels like Africa

[00:35:14] has gone back to being

[00:35:15] the forgotten continent.

[00:35:16] Yeah, in lots of ways.

[00:35:17] I mean, there are some parts,

[00:35:19] you know, there are some countries

[00:35:19] certainly developed,

[00:35:20] and I've lived there

[00:35:21] for quite a bit of my life,

[00:35:22] actually, in parts of Africa.

[00:35:24] And, you know,

[00:35:24] there certainly has been development.

[00:35:26] But yet it still is a place

[00:35:28] that people kind of think of

[00:35:30] as being somewhere...

[00:35:32] Well, a basket case.

[00:35:33] A basket case continent.

[00:35:34] And why is that the case?

[00:35:36] Why hasn't it improved?

[00:35:37] Yeah.

[00:35:38] And is it going to get worse?

[00:35:39] Are we going to find

[00:35:39] with climate change, for example,

[00:35:41] and also just, you know,

[00:35:42] the fact that these economies

[00:35:43] are struggling,

[00:35:44] we'll get more economic refugees,

[00:35:46] so we'll get climate refugees

[00:35:47] and economic refugees

[00:35:48] coming from Africa.

[00:35:49] I mean, if we don't try

[00:35:51] and solve the problem

[00:35:51] at the root,

[00:35:53] at the cause,

[00:35:54] then we will get

[00:35:55] just a continued immigration

[00:35:57] problem in the West.

[00:35:58] And what are the potential solutions?

[00:35:59] Because we've certainly

[00:36:00] been sending money,

[00:36:01] perhaps not enough,

[00:36:02] but we have been sending

[00:36:02] a lot of money over many years,

[00:36:04] and things genuinely

[00:36:06] don't seem to have got better.

[00:36:07] Or maybe they have,

[00:36:07] perhaps we don't know.

[00:36:08] We will find out about all this.

[00:36:10] Right.

[00:36:10] And we'll have an answer.

[00:36:12] Well, maybe.

[00:36:12] An answer to the problem of Africa,

[00:36:14] which people have been

[00:36:19] next week on The Y Curve.

[00:36:21] Join us for that.

[00:36:22] OK, bye.

[00:36:22] The Y Curve.