Farm status could be put in doubt

The objective of the Mid Term Review was to reduce production, and the Single Payment will go into our bank accounts whether or not our grain stores are full.

The farm could become a giant area of set aside, and we could use the spare time to concentrate on more profitable diversification.

Spare a thought for the tax implications before you leap into non-production:-

Farmers who choose to permanently cease farming could lose out on their agricultural and business status. If a farmer has been deemed to cease trading then all the expenses and maintenance of the land will no longer be deductible against income.

The Single Payment will be tradeable and should have a value but if you are deemed to not be a farmer then business asset taper relief will not apply. Full Capital Gains Tax will be charged as the acquisition cost has to be nil.

Inheritance Tax poses the most interesting question as we have all been used to the availability of Agricultural Property Relief combined with Business Property Relief. If a farmer is no longer in business, then how will the Revenue regard his estate for IHT purposes?

I accept we are in difficult times facing a very uncertain future but my advice, generally, is to sit tight for a year before creating any shock waves through your farming policy.

Every silver cloud has a dark lining and it has been an unexpected windfall for us to discover that our farmhouses are worth a small, or in some cases, a large fortune.

There are a couple of carbuncles on your new-found nugget of wealth. Generous "give away" Gordon at No. 11 has done a minimal amount to assist in the situation by raising the threshold for Inheritance Tax from £200,000 in 1996 to £275,000 this year.

In 1996, the average price of a house was just over £50,000 and you don't need me to tell you what your homes are worth today.

Combined with other modest assets, families are going to be forced into the position of paying IHT for the first time, and not be able to pass on their earnings.

Farmers would normally have expected to get full Agricultural Property Relief but the Revenue are only allowing such value as may be "appropriate" to the size of the holding.

In many cases, only a proportion of the total value is allowed for relief, with the rest being added into the estate to be taxed at 40 per cent. If you think you have a problem, take some advice and plan ahead.

Following my report on an outbreak of Newcastle disease amongst pheasants in Surrey, a 9,000 head cull has commenced, and DEFRA have set up a surveillance perimeter of 10km.

I thought you ought to know that the birds were imported from France and I consider this a very sneaky attempt to undermine our economy, having failed to beat us in battle over the last 500 years.

The CLA is launching a petition to review the scope of the Animals Act 1971 which, in these litigious times, is triggering dramatic insurance cost hikes and unreasonable liability.

The Act places strict liability on the keeper of animals that cause harm and there is no requirement for the claimant to establish fault.

The Act includes wording referring to "the likelihood of damage due to characteristics of the animal found at particular times or in particular circumstances, and those characteristics were known to the keeper".

There has been a case in court which decided that a horse owner was liable because his horses were spooked by something and smashed through a fence onto a road where an accident took place. It was acknowledged that there was nothing wrong with the fencing and the owners were not negligent. The case was decided on the fact that horses can break through any barrier when they are scared and the owner knew about it.

Extending the principle to farm livestock, one could easily see a similar decision being made when ramblers under the new Right to Roam go into field of suckler cows with new born calves and suffer injury.

If there is to be any livestock left in the countryside, the liability of the owner needs limiting to his negligence in some form or other. Please give your support to the CLA campaign.

The Government is now considering a ban on all sheep dips because of the "devastating impact on the environment". Bug Life the Invertebrate Conservation Trust are the leading protagonists, claiming that only by banning the practices can this unacceptable damage be halted.

It seems that, once again, those that earn their living from the countryside are put at the bottom on the heap as far as priority is concerned and home-bred roast lamb is in second place to an inedible white crayfish.

Quite rightly, John Thorley, of the National Sheep Association, says: "It is absolutely barmy to start getting rid of any of these chemicals for the simple reason that they need to be used in the industry".

There are no credible alternatives for controlling sheep scab and the way forward must be to get farmers to follow the advice on product labels to minimise the threat.

There is another letter in the Meat Trades Journal from a slaughterman expressing anger and dismay at the documentary on slaughterhouses shown on the BBC on July 4.

He felt that: "The programme was trying to use shock tactics to undo the welfare and professionalism within the slaughterhouse environment". He, like many others in the industry, have never seen such disrespect for the job as was portrayed in this programme.

If there is any message to come out of the documentary, it must be never to allow a film crew within half a mile of one's business.

I know I have been banging on about the Government's seemingly aimless policy of supplying money to the rural economy which ends up going nowhere. Last week, yet another of our rustic ministers, Jim Knight, announced with pride that they are going to provide £26m of funding for community organisations and parish councils to help them address important rural social issues and tackle the causes of rural social exclusion.

Dear, oh dear - £26m could have helped another 3,000 farmers survive.

As you may imagine, I didn't often see eye to eye with the late Edward Heath but I enjoyed his comments on our Prime Minister's repetitive pilgrimages to the White House: "I can't stand the way Mr Blair insists on kissing George Bush on all four cheeks".

Judges: C Mudd Esq, Brompton by Sawdon, TM Bulmer, Salton.

Best pen of five Suffolk X Gimmer Shearlings: 1st RW Twiddle OBE, Knapton, £105, C Mudd, Brompton by Sawdon, 2nd G Stephens, Melton Mowbray; 3rd RW Twiddle OBE, Knapton. Best pen of ewe lambs: 1st Mudd and Maloney, Brompton by Sawdon; 2nd Mudd and Maloney, Brompton by Sawdon. Best pen of store lambs: 1st JFW Jennyns & Partners, Huttons Ambo; 2nd I Swallow, Middleton on the Wolds; 3rd A Metcalfe, Kirby Underdale. Best Suffolk ram lamb: 1st JT & EA Midgley, Painsthorpe; 2nd G Harper, Newton on Rawcliffe; 3rd C & K Milburn, Scagglethorpe. Best Suffolk shearling ram: 1st JT & EA Midgley, Painsthorpe; 2nd C & K Milburn, Scagglethorpe. Best Texel shearling ram: 1st David Burkhill, Harpam; 2nd GL Riby, Fraisthorpe; 3rd GL Riby, Fraisthorpe. Best Charollais shearling ram: 1st S Hunter, Hunmanby; 2nd CW Marwood, Whenby; 3rd Mackley & Pratt, Folkton.

Draft ewes to £44: TW & JB Sowersby, Etton, ave £40.32. Suffolk X ewes to £79: PB Fox & Son, Dunnington, ave £62.80. Suffolk X Gimmer shearlings to £105: RW Twiddle OBE, Knapton, ave £81.50. Texel X ewes to £78: PB Fox & Son, Dunnington, ave £69.30. Texel X shearlings to £78: W & L Thompson, ave £77. Texel X gimmer lambs to £44.50: Mudd and Maloney, Sawdon. Store lambs to £44.50: JFW Jenyns & Partners, ave £37.80. Suffolk shearling rams to £410: JT & AE Midgley. Texel shearlings to £300: J & RM Lucas. Fimber Charollais shearlings to £420: JN Maw, Doncaster.

Forward 112 cattle including 41 bulls, 482 sheep including 12 ewes. Light steers to 109p: JE Rimmer, Pickering, ave 104.4p. Heavy steers to 118p: B & JA Gray, Fryup, ave 103.3p. Light heifers to 103p: P & I Beal, Settrington. Medium heifers to 127p: Charity Farms, Thornton-le-Dale, ave 107.7p. Heavy heifers to 137p: JL Gray, Grindale, ave 109.7p. Medium bulls to 110p: M Sunley, Farndale, ave 103.2p. Heavy bulls to 110p: FB Brown, Lockton, ave 101.3p. Black and white bulls to 81p: MP Turnbull, Riseborough, ave 79.5p. Standard lambs to 123p: DA Earnshaw, Salton, ave 106.8p. Medium lambs to 109.5p: TM & J Abram, Westow, ave 104.3p. Heavy lambs to 109.1p: CF Beal, Yedingham, ave 104.08p. Ewes to £40.50: WG Coleman & Partners, Burton Fleming, ave £30.

Updated: 10:22 Wednesday, July 27, 2005