Labour’s inheritance tax raid on farmers will spell the death of the farm shop, Rachel Reeves has been warned.

Farmers say they may have to close shops or lay off staff as a result of last month’s Budget.

A Gloucestershire farmer said: ‘Farm shops rely on locally sourced ingredients which are often from small producers – which will be entirely eradicated over a generation.’

Geraint Thomas, who has a shop on his Welsh farm, said it was facing a ‘big hit’ from the Budget, partly through the employers’ NI hike. 

He said shop owners will face tough decisions on raising prices, cutting staff or even closing.

Conservative environment spokesman Victoria Atkins said: ‘Farm shops themselves will not only suffer as a result of the family farm tax – which will force many farms to sell off land to pay tax bills totalling hundreds of thousands of pounds. 

‘They will also be hit with Rachel Reeves’ National Insurance hike.’

The UK has more than 1,500 farm shops, employing 25,000 people, according to agriculture university Harper Adams.

Mo Metcalf-Fisher, of the Countryside Alliance, said: ‘Many farm shops depend on produce from small family farms to help feed the countryside and sustain their business.

‘If those farms are lost, these shops as well as farmers’ markets will be severely impacted, undermining their ability to sell popular local produce.’

A government spokesman said: ‘Our commitment to farmers remains steadfast – we have committed £5 billion to the farming budget over two years, including more money than ever for sustainable food production.’