FARMERS have reacted positively to the government's announcement that the tax relief red diesel for farmers will be kept in place.

Last week, the Chancellor of the Exchequer Rishi Sunak unveiled the 2020 budget, in which he announced that the red diesel tax exemption for agriculture will be retained.

The NFU has welcomed this move, saying that the fuel is vital to the industry and changes to this tax relief could have seen famers' costs surge.

Minette Batters, President of the NFU, said: "The most significant decision today for British farmers is the announcement to retain the relief on red diesel. This is absolutely crucial and we are pleased to see the Chancellor has acknowledged our concerns.

"Red diesel is the primary fuel to run the majority of agricultural machinery, and it is incredibly important for the farm business that produce the nation’s high quality and affordable food.

"Changes to this duty could have virtually doubled fuel costs for farmers and, with no current alternative fuel for agricultural vehicles, this would have left farms immediately uncompetitive with many other countries who continue to provide lower fuel duty for their agricultural industries.

"This lower fuel duty on red diesel recognises its importance to farm businesses, their ability to produce food for the nation and the fact this machinery is mainly used off-road on farms."

Rural organisations had previously raised concerns that this tax relief might be scrapped in the budget, and had put out calls to the government urging them to keep the exemption in place.

CLA President Mark Bridgeman - who was among those voicing their worries - welcomed the Treasury's move.

He said: "Rumours that Agricultural Property Relief, Business Property Relief and the Red Diesel Rebate might be scrapped caused significant concern among farmers, and the CLA lobbied the Treasury, DEFRA, MPs and officials intensively as a result. However, the fact we had to make the argument in the first place shows we must continue to fight for family businesses."