Move to remove reservoirs tax relief is ‘bonkers’ - NFU

FARMERS’ leader Peter Kendall called on Government to support the industry’s efforts to improve water storage infrastructure as he attended drought talks in Suffolk this week.

The National Farmers’ Union (NFU) president hit out at recent legislation which appears to specifically exclude farm reservoirs from ‘plant and machinery’ tax relief.

He described the move as “absolutely bonkers”.

“Government made a really silly decision three or four years ago that reservoirs building you can no longer write off against tax - basically removing a tax allowance against agricultural building including reservoirs,” he said.

“I use the example of tax incentives for investing in reservoirs in the same way as for any other plant or machinery. All that has been removed from reservoirs just at a time when you need tax relief. That’s my example of how the Government isn’t getting how this is an industry like any other needing rewards for investment.”

Across Government departments it had “yet to sink in how important the food industry is”. Farming was still wrongly perceived within government as “old-fashioned”, he added.

More reservoir capacity was needed on farms to cope with the unpredictability of weather patterns in recent times, he said.

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Mr Kendall, who visited the Euston Estate in the west of the county and met estate manager Andrew Blenkiron and members of the Sapiston Area Irrigation Group, also said water on golf courses ought to come second to making sure all the vegetables are produced in East Anglia.

“Euston had some shocking yields to report from last year’s harvest because it didn’t get the rain at the right time,” he said.

He had a “useful discussion” with farmers about keep the pressure on, he added.

Farmers at the meeting said they are finding it difficult to compete with water companies, who are able to abstract waterwhile they face restrictions. The NFU would like to see this imbalance addressed through the Water White Paper.

“We have now had three (Government-led) drought summits,” said Mr Kendall.

“They are listening. Are the acting fast enough? No. We need long term planning and infrastructure planning around water.”

NFU East is holding its third drought meeting on Monday at Newmarket.

It will be chaired by NFU deputy president Meurig Raymond, and Henry Leveson-Gower from the Department for the Environment, Food and Rural Affairs will talk about the Government’s proposals for changing the water management regime.