A record 6,365 agricultural, forestry, and fishing businesses ceased operations in the UK over the past year, marking the highest closure rate since quarterly records began in 2017, according to British Office for National Statistics (ONS) data.
This surge follows Chancellor Rachel Reeves’s controversial extension of inheritance tax, dubbed the “tractor tax”, which imposes a 20% levy on family farms valued at £1 million or more. The Treasury maintains that existing allowances mean only estates exceeding £3 million face liability, affecting approximately 28% of family farms.
However, Defra’s internal assessments suggest up to 66% could be impacted, creating widespread uncertainty.
The policy triggered vehement opposition from farming representatives and supermarkets alike. National Farmers’ Union (NFU) President Tom Bradshaw described sector confidence as “at rock-bottom,” adding:
It creates this continuing sense that the industry isn’t valued and its worth to the country isn’t being recognised. I can understand why the psychology is there that people will be taking the decisions that they may be resigned to sell off, and they are no longer able to make a living of it.
Country Land and Business Association President Victoria Vyvyan warned rural businesses “are being pushed to the edge,” citing compounding pressures from red tape and National Insurance rises.
Still, the countryside carries on. New businesses are opening. People are holding on. But grit isn’t a strategy. What’s needed now is simple: stability, clarity, and a government willing to listen – before more farms are lost and more families are forced out.
Thousands of farmers paralysed Westminster in November 2024 with tractors, protesting the tax changes they argue jeopardise intergenerational farm transfers. The Office for Budget Responsibility further undermined the policy’s rationale, assigning a “high uncertainty” rating to its projected £500 million annual revenue and noting revenues would likely decline after seven years.
Defra officials countered closure statistics by highlighting a £1.6 billion year-on-year increase in UK farming profits. A spokesperson stated:
Our commitment to farming and food security is steadfast… We are slashing costs and red tape for food producers to export to the EU, have appointed former NFU president Baroness Minette Batters to recommend reforms to boost farmers’ profits, and we’re ensuring farmers get a bigger share of food contracts across our schools, hospitals, and prisons.
In 2024, UK farms produced only 17% of consumed fruit and 55% of vegetables, creating import dependencies. Extreme weather, including the wettest 18 months since 1836, left 15% less wheat planted and 558,000 hectares of arable land fallow.
