Almost 1 in 4 farms forced to shut in last two decades as Treasury meet farmers today

18 February 2025, 08:51 | Updated: 18 February 2025, 08:56

Almost one in four farms in England have been forced to close in the last two decades, LBC has learned.

In total, around 80,000 farms have been forced to close over the past twenty years, with the numbers of livestock and crop farms plummeting under successive governments.

The staggering new statistics are likely to intensify calls for the government to abandon its proposed changes to inheritance tax on agricultural assets, which the industry has warned could have a “devastating impact” on family farms.

Shared exclusively with LBC, the new data compiled by the Liberal Democrats shows almost 50,000 livestock and 30,000 crop farms have been forced to shut since 2005.

What’s more, over half of dairy farms have been put out to pasture in the same period.

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Together with squeezed margins, the rocketing costs of energy, fertiliser and animal feed have all contributed to the sharp fall in the number of farms operating in the UK.

Many farmers argue these issues are set to be compounded by the introduction of inheritance tax on agricultural land.

Announced in the Budget last October, the changes will see farmers pay a twenty percent levy on assets over £1m from April 2026.

The policy has proved contentious, with over 275,000 people have signed a petition organised by the National Farmers’ Union calling for the tax to be kiboshed, and farmers consistently voiced their discontent.

Liberal Democrat leader Sir Ed Davey told LBC that the figures, teamed with the changes to Agricultural Property Relief, shows that family farms are “on the brink”.

“Family family farms are the backbone of our rural areas, critical to our economy and obviously our food security,” Sir Ed argued. “We should be doing everything to support them: that's not only reducing and getting rid of the family farm tax, but also improving investment in our farmers.”

Sir Ed added that he fears families could ultimately pay the price if the government fails farmers: “I'm really worried with the number of farms falling, with the high cost of energy and with the trade deals that the Conservatives agreed, we will actually see food inflation continue to rise.

“They're seeing that in the United States under President Trump, with egg prices going through the roof. I really worry that we will be hit yet more in the pocket if the government doesn't back British farmers.”

Last week, Sir Keir Starmer curtailed a visit to a housing development in Buckinghamshire after farmers protesting the inheritance tax changes blocked the site using their tractors.

Worryingly for the government, this sort of action shows no sign of abating.

“This isn’t something we’re going to give up on,” dairy farmer Paul Glanvill told LBC. “We feel so strongly and passionately about it that we’re going to keep the fight going - there will be more action in the future.”

Mr Glanvill, whose family has farmed a plot in Woodbury, near Exeter, for over two hundred years, believes a compromise could be struck:

“I think there could easily be a middle ground where you hit the core food producers and the family farms but you still try to hit those investment buyers who are simply only purchasing land to avoid inheritance tax.”

A Government spokesperson told LBC: "For years farmers have struggled to make a fair profit, faced spiralling costs and have been undercut by trade deals forcing thousands out of business.

"This government recognises that food security is national security. That is why we are investing £5 billion into farming over the next two years, the largest budget for sustainable food production in our country’s history. We are going further with reforms to boost profits for farmers by using the Government's purchasing power to back British produce and reform planning rules on farms to support food production."

Later today, Treasury officials will face a showdown with the NFU.

At the meeting, exchequer secretary James Murray, a key lieutenant of Rachel Reeves, will be implored to rethink the policy, with the NFU expected to stress its potential implications for UK food security.

Last month, three major supermarkets - Tesco, Aldi and Lidl - added their voices to those criticising the policy.

Ashwin Prasad, Tesco’s chief commercial officer, confirmed Britain’s biggest supermarket is supporting the NFU’s calls for a pause in the policy’s implementation.