Farmers hit by 20% real terms cut to subsidies as Lib Dems call on the government to scrap the ‘family farm tax’

EMBARGO: 00.01 Tuesday 19 November

• Farming subsidies have fallen by 20% in real terms since 2015 - equivalent to the loss of £722 million in public funding for farmers
• Last year alone 8,100 UK farms closed their doors - equal to one in 25 of all farms in the country
• The Liberal Democrats have called the government to scrap the ‘family farm tax’ or risk ‘ringing the death knell for farming’

Subsidies for farmers have fallen by 20% in real terms since 2015, House of Commons Library research, commissioned by the Liberal Democrat reveals. The Party has called on the government to scrap the ‘family farm tax’ to save farms from even greater financial pressures at a time when many are on the brink of collapse already.

The Library’s research revealed that between 2015 and 2023, farmers have been subjected to the equivalent of a £722 million cut in real terms to their subsidies with no real terms increase since 2017. It equates to a 20% real terms cut in just eight years, with the total direct public payments to farmers now standing at less than £3 billion. 

As a result, each farm has suffered a real terms loss of £3,000 in funding from the government, the equivalent of a 17.5% real terms cut per agricultural holding.

These losses are only the beginning, as Labour announced in the Budget an acceleration of the end to the direct payments to farmers under the Basic Payment Scheme (BPS) -  farmers in England will see their direct payments reduced by an extraordinary 76%.

Last year alone there was a staggering fall in the number of farms following many suffering at the hands of legacy of botched trade deals by the previous Conservative government and declining incomes. In 2023, the UK lost 8,100 farms, close to one in 25 across the entire county.

The Liberal Democrat have called on the new government to ditch their proposals to introduce a ‘family farm tax’ by cutting rates of inheritance tax relief for farmers. The Party said that with the new government placing even more financial pressure on farms they risk ‘ringing the death knell for farming’ in the UK.

Liberal Democrat Environment spokesperson, Tim Farron MP said:

“Farmers are absolutely vital to this country. They put food on our table and look after our countryside and without them we would all be worse off.

“For years the Conservative party knew this and did nothing but neglect them. They forced them to suffer through botched trade deals, declines in their incomes and cuts to much needed support that makes farming in this country viable.

“Now the new Labour government looks set to do exactly the same. Their family farm tax will be yet another hammer blow to farmers in this country and risk ringing the death knell for farming in the UK.

“The Chancellor’s Budget completely failed to understand how rural communities work. She must urgently rethink, scrap this disastrous family farm tax and finally get farmers the support they deserve, not place more burdens upon them.”

ENDS