NFU Cymru chairman Aled Jones said family farms were entering a year of major political change with greater certainty for the future after inheritance tax reform eased pressure on them.
In his New Year message, Mr Jones said 2025 had ended “with a sense of relief for many family farms” following the UK Government’s decision to increase the threshold for agricultural and business property relief from £1m to £2.5m.
He said that, when combined with the amendments to allow spousal transfers, the reforms would mean “for many people they will now be able to pass on up to £5m of eligible agricultural and business assets to the next generation before paying inheritance tax”.
Mr Jones said the changes came after more than a year of ongoing campaigning by NFU Cymru to amend the original proposals, which caused widespread concern across the agriculture sector.
He pointed to high-profile lobbying efforts, including a petition backed by more than 270,000 people and a ‘NO IHT’ mosaic display unveiled at the Royal Welsh Winter Fair on the eve of the Autumn Budget.
Describing the announcement as a turning point, he said the government’s decision would be “welcome news for family farms in Wales”, adding: “For many, this is an important change and instead of ending the year on the back foot, families can come together and start the new year with a clearer path to the end of the year.”
Looking ahead, Mr Jones said all eyes would be on Wales’ Sustainable Agriculture Scheme, which will be launched on January 1, 2026. He said the publication of the guidance document in recent days was an important step for the scheme, which has been eight years in the making, and will shape how farmers are supported in the coming years.
He said NFU Cymru’s engagement with the Welsh Government had already brought about significant changes since the first proposals for the scheme were announced in 2018. Discussions over the past 18 months through roundtables and subgroups have secured the removal of the proposed 10% tree cover requirement and the reduction of the number of universal actions from 17 to 12.
Mr Jones also highlighted the decision to keep the agriculture budget at £340m and the introduction of social value payments within the universal tier of the system. He said this recognized the wider contribution of Welsh agriculture to society and would bring “much-needed stability to our family farms”.
While supporting the overall framework of the SFS, he cautioned that further progress is essential. His message to the current and next Welsh Governments is that there needs to be a “commitment to continue to evolve the system to support Wales’ productive, progressive and profitable agricultural sector”.
Mr Jones said 2026 would also be a key year politically, with the Senedd party set to expand to 96 MPs elected from 16 new constituencies under a new voting system.
He pointed to NFU Cymru’s manifesto ‘Welsh Agriculture: Moving Growth Forward’, which sets out the incoming government’s priorities, including a farm-to-fork food strategy, a ring-fenced, multi-year agricultural budget and a comprehensive approach to combating bovine tuberculosis.
Looking back over the past year, he said the industry had faced difficult debates around inheritance tax, uncertainty around SFS, the threat of animal disease and severe weather conditions.
He also criticized the quadrennial review of the Agricultural Pollution Control Regulations, saying it did not reflect the “true desperation of Welsh farmers grappling with the impracticality and complexity of the regulations”.
Despite these pressures, Jones said he remained encouraged by what he saw across the country, praising “the ambition and ‘can do’ attitude of our country’s farmers and their desire to feed our people while striving to leave our farms in a better place for the next generation to take over the reins.”
As the UK enters a period of political change, Mr Jones appealed to politicians from all parties to work with the agricultural sector to deliver the right policy and regulatory environment.
He said this was essential to ensure farmers could continue to “produce world-leading healthy and nutritious food while contributing culture and language to the environment, climate and economy.”
