The agricultural landscape is set for a transformative boost in 2024, as the UK government unveils its most substantial funding package yet, aimed at propelling food security, farming productivity, and profitability to unprecedented heights. The comprehensive budget not only addresses immediate challenges but also paves the way for a secure future for rural businesses.
Let's delve into the key highlights that promise to shape the agricultural and rural sectors positively.
1. Empowering Agriculture Through Unprecedented Grants
In a groundbreaking move, the government is injecting £427 million into the farming sector, marking the largest-ever round of grants. This funding, coupled with private sector contributions, will drive innovation and productivity, fortifying the foundation of food security. The commitment to supporting agricultural productivity underscores the government's dedication to ensuring a resilient and self-sufficient food supply chain.
2. Safeguarding Agricultural Land with Water and Flood Management Investment
Recognising the vulnerability of agricultural land to floods and storms, the budget allocates £75 million to Internal Drainage Boards for water and flood management. This investment is crucial in protecting valuable agricultural assets, ensuring the sustainability of farming operations even in the face of environmental challenges. The government's proactive approach reflects a commitment to the long-term viability of the agricultural sector.
3. Catalysing Innovation with the Agri-Food Launchpad
A pivotal aspect of the budget is the £5 million investment over the next three years in an agri-food Launchpad in Mid and North Wales. This initiative is set to become a catalyst for innovation, fostering collaboration between industry players and driving technological advancements. The Launchpad promises to be a hotbed of creativity, propelling the agri-food sector into a new era of growth and sustainability.
4. Inheritance Tax Relief for Environmental Land Agreements
Starting from April 6, 2025, the budget introduces Inheritance Tax relief for environmental land agreements, extending agricultural property relief. This move encourages environmentally conscious land management practices, aligning economic incentives with sustainable agricultural practices. The government's forward-looking stance acknowledges the role of farmers as stewards of the environment.
5. Abolishing Furnished Holiday Lettings Tax Regime for Fair Property Markets
Aiming for fairness in the property market, the government will abolish the Furnished Holiday Lettings tax regime from April 6, 2025. This measure levels the playing field between short-term furnished holiday properties and residential rentals, fostering a balanced and equitable property market. Draft legislation to enforce this change will be published in due course. Whilst this change will negatively impact some, it will overall increase the supply of housing in rural and coastal communities.
6. Continued Support for Red Diesel
Recognizing the importance of stable fuel costs for agricultural operations, the government pledges continued support for Red Diesel. Fuel duty rates on road fuel gases will be maintained until 2032, providing farmers with financial predictability and contributing to the overall sustainability of the agricultural sector.
7. Rural Business Support for Growth and Prosperity
The budget extends a helping hand to small and medium-sized enterprises (SMEs) in the rural sector. A £2.4 billion business rate relief extension, along with a raised VAT threshold to £90,000 for growth, empowers SMEs to thrive. This support acknowledges the pivotal role that these businesses play in the economic fabric of rural communities.
There is more in the budget, support for the Kings Countryside Fund and £5 million to support Village Halls, as well as other changes like the reduction in NIC that will benefit all rural workers and changes to Child Benefit which benefits over 170,000 families.
I know there is much many would like to have seen on the budget, particularly on how long term farm tenancies are treated to support our tenant farming sector, changes to the roll out of Universal Credit which is replacing Child Tax Credit/Tax Credits which is negatively effecting some in the farming community another example.
In conclusion though the 2024 budget stands as a testament to the government's commitment to fostering growth, innovation, and sustainability within the agricultural and rural sectors. The comprehensive measures outlined above signal a new era for farmers, businesses, and communities, ensuring a robust and prosperous future for all.
