One in 10 farmers could abandon the industry due to growing concerns about tax rises and subsidy cuts, according to a rural accountant.
The warning has been made ahead of the government’s Autumn Budget as the industry awaits a potential rise in Capital Gains Tax against the backdrop of reduced subsidies.
This, according to Duncan & Toplis, could put the future of British agriculture at risk, with around 10% of its farmer client base thinking of quitting all together if the landscape doesn't improve.
Mark Chatterton, head of agriculture at the accountancy firm, said many farmers were considering selling their land, gifting it to the next generation, or contracting out to bigger businesses.
And as farmers grapple with economic uncertainty, shrinking financial support and two successive poor harvests, he warned that the industry "simply can’t survive without urgent investment".
"This Autumn’s Budget could deliver a devastating blow if Capital Gains Tax is hiked as expected.," Mr Chatterton added.
"Farmers are already struggling after poor harvests and diminishing subsidies—another financial hit may push many out of the industry for good."
The NFU recently revealed that confidence in the sector is at its lowest since records began, and Defra itself has warned that nearly half of farmers fear for the future.
The Sustainable Farming Incentive (SFI), which is replacing the dwindling BPS, is seen as the last lifeline for many farmers, but even that is only guaranteed for three more years.
But without urgent investment, Mr Chatterton warned that the UK could see a collapse in agricultural production.
“The new government has vocally affirmed the UK’s agricultural sector as a matter of the utmost national security - and I couldn’t agree more," he added.
"I’d urge the government to apply firm and consistent support for the sector when it needs it most."
Duncan & Toplis said it was seeing an increasing number of farming businesses in the Midlands, where the firm is based, taking stock of their options.
Those without clear succession plans were considering seizing the opportunity to capitalise on historically high land prices "before it’s too late".
"This makes sense to a degree, as waiting could prove a costly mistake if the Autumn Budget diminishes financial prospects further, but what could this mean for the sector as a whole?” Mr Chatterton said.
It comes as speculation grows that this year’s Autumn Budget will include major tax reforms, with Capital Gains Tax possibly rising to 45% and changes to Inheritance Tax expected to bring more farmers into its scope.
Although the government has promised new measures to boost confidence in agriculture, it has yet to provide clear timelines.
Mr Chatterton concluded that farmers were hoping the Autumn Budget would turn these promises into reality - one with clear and decisive deadlines and deliverables.
He said: "As the nation braces for impending tax reforms, the agricultural sector faces an uncertain future.
"Without decisive action, the consequences could be devastating for both farmers and consumers."
It comes as the government was told to 'put its money where its mouth is' on sustainable farming by increasing the agriculture budget to £3.8 billion a year.
Bolstering the farming budget was key to kickstarting long-term growth in the rural economy, the Country Land and Business Association (CLA) argued last week.
Increasing the budget from £2.4bn to £3.8bn a year by 2027-2028 would also deliver on many of the government’s environmental targets, the body said.
