The National Sheep Association (NSA) is joining wider industry in its condemnation of this week’s announcement of plans to cut Agricultural Property Relief (APR). NSA believes the plans will significantly impact farming families and future generations looking to continue their family farming heritage.

NSA Chief Executive Phil Stocker says: “It seems that Labour have had their head in the sand over the past five years, completely ignoring the turmoil the agricultural industry has been in and financial pressure on farming businesses. The long-term impacts of the Chancellor’s announcement, which limits 100% agricultural property relief and business property relief to the first £1 million of value from April 2026, will significantly impact family farms. Although the farming budget will remain unchanged at £2.4 billion for the next financial year, when considering inflation this does not line up with the fact farm business costs have risen on average by 44% since 2019.

“In terms of tax reforms, the extension of Agricultural Property Relief (APR) to land enrolled in government environmental schemes from April 2025 reflects a broader trend towards incentivising sustainable land use. This policy encourages landowners to adopt environmentally friendly practices, aligning agricultural incentives with climate goals. However, the change could shift some farmland out of traditional agricultural production, potentially affecting the availability of productive land over time, as more land is redirected towards environmental stewardship and biodiversity projects.

“The Defra budget is not what industry would have liked to see, and NSA believes agriculture, animal health, land management, climate change, nature and natural resources deserves far more and could deliver so much more with the right funding. It is appalling that agriculture cannot be accepted as a key solution towards health, education and the interests of other government departments in addition to the core Defra interests."

NSA is further dismayed by the announcement that comes after assurances from Labour there would be no changes to APR in the run up to the election.

NSA Policy Manager Emma Owen says: “At a time when the agriculture industry is on its knees and with significant constraints for the next generation of farmers these changes could debilitate the future of food production in the UK. For young and aspiring farmers, this shift means competing not only with established landowners but also with corporate investors motivated by tax benefits and environmental policies. The extension of APR to land used for environmental schemes (e.g., biodiversity, reforestation) is attracting corporate investors looking to benefit from tax breaks while diversifying their portfolios with environmentally aligned assets. With corporate interest in sustainable investments rising, these incentives are driving corporations to buy up farmland to access environmental tax reliefs.

“It is disappointing that our Ministers take our ability to produce food and protect the environment for granted, the continued squeeze on agriculture business has already resulted in a loss of farming businesses. With return-on-capital at an all-time low and the volatility in commodity markets starkly impacting bottom lines, the industry’s ability to service extra debt is restricted. The only light in this situation is that it may encourage succession planning, but with a government that has such a low opinion of farming, is the next generation going to be there to pick up the baton?”

Mr Stocker concludes: “At least we can be confident that we continue on the trajectory of SFI and higher-level stewardship, and the Animal health and Welfare Pathway as key components of farming support. It is also encouraging to see additional funding going into Weybridge animal health facilities – protecting Britain’s livestock from disease is an often-forgotten plank of agricultural support.”