FARMERS across Pembrokeshire say recent changes to inheritance tax rules have eased immediate pressure on family farms but insist the Government’s climbdown has not resolved deeper concerns about long-term security and confidence in the agricultural sector.

The UK Government has confirmed that the threshold for 100% Agricultural Property Relief (APR) and Business Property Relief (BPR) will rise from £1 million to £2.5 million per individual. When combined with measures announced in last month’s Budget allowing unused reliefs to be transferred between spouses, the change could provide an effective allowance of up to £5 million for married farming couples. The reforms are due to take effect from April 6, 2026.

While the move has been welcomed by farming organisations, many farmers argue it reduces the immediate risk without removing the underlying problem facing family farms, particularly in rural counties such as Pembrokeshire where land values have risen sharply while farm incomes remain under sustained pressure.

Local Senedd Member Sam Kurtz MS said the changes, while welcome, had not gone far enough to address the uncertainty facing farming families in Pembrokeshire. He said many farmers remained concerned about how land and assets would be valued under the new rules and warned that confidence had been shaken by the way the original proposals were introduced. Mr Kurtz added that long-term clarity was essential if family farms were to plan for succession and continue investing in their businesses.

The Farmers’ Union of Wales (FUW) said the revised thresholds would provide “much-needed breathing space” for many families, but warned that farming businesses remain vulnerable because they are often asset-rich but cash-poor. The union has argued that farms cannot be treated in the same way as other assets when inheritance tax policy is being designed.

The original proposals to reform inheritance tax earlier this year sparked widespread anxiety across Welsh agriculture, with fears that farms could be forced to sell land or break up long-established businesses to meet future tax liabilities. In Pembrokeshire, where many farms have been passed down through generations, industry figures said the uncertainty disrupted succession planning and caused families to delay investment decisions.

Some farmers who spoke to national media following the Government’s reversal described the decision as a welcome U-turn but said it came too late to undo the stress caused by the earlier proposals. One farmer said the change was “the best Christmas present for a lot of farmers” but criticised what he described as a lack of understanding shown toward rural communities during the original policy rollout.

Others involved in protests against the reforms said the episode had damaged trust, warning that uncertainty alone can be enough to undermine family farming businesses even if policies are later amended.

Political figures have also acknowledged that the debate is not settled. The chair of the Welsh Affairs Committee said the increase in thresholds was a positive step but called for a Wales-specific assessment of how the changes will affect farming communities, warning that further scrutiny is needed.

Farmers are now pressing for clearer guidance on how the new rules will work in practice, including how land and assets will be valued, how reliefs will apply to tenanted farms and family partnerships, and whether future governments could revisit the policy.

The FUW has said it will continue discussions with Ministers in the new year, arguing that restoring confidence is essential at a time when Welsh agriculture is already facing rising costs, policy change and wider economic uncertainty.

Industry representatives warn that without long-term stability, family farms in Pembrokeshire and across Wales may still struggle to plan confidently for the next generation, despite the Government’s partial reversal on inheritance tax.

NFU Cymru warns processors over sudden reductions as costs remain high

MILK processors collecting from dairy farms across Pembrokeshire have been accused of imposing sudden cuts to farmgate prices as they seek to curb oversupply.

The reductions come at a time when many dairy farmers are already under strain, with production costs continuing to rise despite falling milk prices.

NFU Cymru has written to processors urging them to act responsibly and warning that the current approach risks placing further pressure on an already stretched sector.

In its letter, the union says the combination of sharply lower milk prices and persistently high costs is creating serious financial challenges for farmers, particularly as they head into the winter period.

The union has also reminded processors of their legal obligations under the Fair Dealing Obligations (Milk) Regulations, which came into force in 2024. The rules require any changes to supply contracts, including price adjustments, to be made in line with agreed terms and within the framework of the regulations.

Jonathan Wilkinson, chair of the NFU Cymru dairy board, said it was vital that the dairy supply chain operated in a fair and transparent manner during what is proving to be a difficult period for producers.

He said global commodity markets remain under pressure, with record milk volumes being produced both in the UK and internationally, making trust between farmers and processors more important than ever.

NFU Cymru warned that the unexpected nature of recent price cuts, combined with ongoing costs such as wages and borrowing, was putting farmers under considerable strain. The letter was also signed by the chairs of other UK dairy boards.

The union is calling on processors to engage openly with their suppliers, ensuring farmers feel able to raise concerns and understand how feedback will be addressed.

NFU Cymru also acknowledged that farmers have responsibilities of their own, including ensuring milk produced meets contractual requirements and agreed volumes.

However, the union said it firmly believes that where farmers and processors work together with openness and trust, the dairy sector is best placed to weather the current challenges.

RESPONDING to news the inheritance tax threshold will be raised to £2.5m, after a long-fought campaign by the Union, NFU Cymru President Aled Jones said: “ Over the past 14 months NFU Cymru, and its members, have been tireless in their efforts to amend the proposals, culminating in the ‘NO IHT’ mosaic display at the Winter Fair on the eve of this year’s budget.

“Today’s announcement, which sees the tax threshold raised from £1m to £2.5m, is a major development which will take many Welsh family farms above the threshold for Inheritance tax and will greatly reduce the tax burden for others. The change announced today, alongside the announcement by the Chancellor in last month’s budget to allow spousal transfer will mean that for many up to £5m in qualifying agricultural or business assets will be able to be passed on to the next generation before paying inheritance tax.

“When it became clear that we weren’t going to get rid of the proposals announced in the October 2024 budget NFU Cymru, alongside our colleagues in the NFU, NFU Scotland and Ulster Farmers Union, have left no stone unturned in lobbying for changes that would mitigate the worst elements of the original proposals.  Today’s announcement alongside the changes in the November budget will be very welcome news to many Welsh family farms, coming as it does just before Christmas, a time when families come together.”   

“I’d like to thank all our NFU Cymru members for their diligent and consistent lobbying of MPs, often having to share tragic and upsetting deeply personal stories with politicians and the media. I would like to thank the supply chain who stood by us throughout, recognising the damage that the original proposals would have caused not just to family farms but to rural Wales. The public have also been fantastic, with so many of them making up the 270,000 signatures I delivered to No 10 as part of the Stop the Family Farm Tax Petition earlier this year.

“We must also recognise the Welsh Labour MPs who were willing to meet with us and hear first-hand the human impact the original proposals would have had on farming families, who have stood up for their constituents and backed Welsh farming and rural Wales, and who in recent weeks demonstrated their support for our campaign by abstaining from the Budget Resolution 50.  We owe our gratitude to them for helping the UK Government make the changes needed.”

“Our thanks go to both the Westminster Welsh Affairs Committee and the EFRA Committee for their reports and recommendations on this matter and also the support of all the opposition parties.”  

“As a Union we have met with the Prime Minister, the DEFRA Secretary of State and the Welsh Office. I’d like to thank the UK Government for recognising that the original proposals would have caused untold damage to Welsh and British farming and for making the changes they have, which are very much welcomed and will make a significant difference to family farms the length and breadth of the Country.”