Tractor Wars

Farmers are out on the lanes again, this time protesting about inheritance tax. Fair enough, nobody likes HMRC rummaging in the family silver. But it all feels like a distraction from the problem that is actually killing British farming, which isn’t tax at all. It is the prices farmers accept for their produce – prices dictated by supermarkets because farmers insist on negotiating as isolated, individual businesses rather than as a single, organised bloc with bargaining power. In other words, the enemy isn’t the Treasury; it’s the market they keep walking into alone.

For forty years we’ve been fed the romance of the rugged, independent farmer. The trouble is that rugged individualism works brilliantly for television adverts and absolutely terribly against supermarket buyers who negotiate in air-conditioned offices with spreadsheets that could run NASA. A thousand lone farmers each trying to flog milk or beef to a buyer with near-monopoly power is not a ‘market’; it’s a mugging.

And yet co-operatives – the obvious solution – continue to get the side-eye. Mention co-ops and suddenly everyone turns into Milton Friedman with a flat cap. Farmers will tell you the free market must be left to do its thing, even though the thing it’s doing is squeezing them until the only people left making a profit are Tesco, Sainsbury’s and the offshore property funds that own the distribution centres. You almost admire the purity of the ideology – starving for the principle of competition while the competition has long since been eliminated.

Look across the Channel and you see a different story. Continental farmers understand that if you want fair prices, you negotiate together. You build a marketing board or a co-op with real clout. You invest jointly in storage, processing and logistics so the supermarket buyer can’t simply shrug and say the milk can go sour for all he cares. Prices stabilise, income evens out, and rural areas stop hollowing themselves out. Funny how that works when the grown-ups take charge.

Here we do the opposite. We dismantled our old boards in the Thatcher years, never replaced them, and ended up with the most lop-sided agricultural market in Europe. The farm income graph looks like a seismograph. Farmers are asset-rich and cash-poor, endlessly borrowing against land they’d rather pass on to their children, which is why inheritance tax becomes such an emotive battlefield. But IHT is a symptom, not the disease. The disease is weak bargaining power.

A functioning agricultural system doesn’t rely on the goodwill of accountants in Holborn. It relies on producers refusing to be picked off one by one. You cannot run a modern industry on nostalgia and neighbourly pride while your customers run theirs on scale, logistics and ruthless price discipline. The supermarkets are not going to pay more out of kindness. They will pay more only if they have to – only if they face a single producer organisation with enough weight to force a fair deal.

So, yes, protest about inheritance tax if you like. But until farmers stop behaving like a collection of charming, isolated family fiefdoms and start behaving like the industrial sector they actually are, nothing will change. The power is in their hands, but only if those hands join together for once instead of waving pitchforks at the wrong target.