The impact of Covid-19 on the rural economy
Ross Murray reflects on the rural outlook post-Covid
2 minutes to read
This spring, the loveliest in a generation, has been marred by the awful implications of Covid-19. Not just for the economy, but for its effect on so many personal lives and, for a minority, their health. It has been an extraordinary turn of events.
For those of us lucky enough to live in the country the lockdown has been a routine of Zoom and home working, home cooking and home schooling, online yoga and interminable quizzes, locally sourced food, gardening and Amazon deliveries. Reliance on the internet has been absolute.
I thought last year’s political dramas were excitement enough. Indeed, I concluded in the 2019 edition of The Rural Report that it was time to de-risk and wait for opportunities to emerge. Did I take my own advice? Only in part, alas. Now the economy has shut down so precipitously there is limited merit in looking back. Circumstances require a rather more strategic view forward.
It is the implications for food and farming that now occupy my own and many others’ thoughts. But change was upon us in any event. The Agriculture Bill fundamentally resets the basis of future support – a more market-based UK agriculture with public money paid only for public goods.
"It is now that real assets such as farmland and forestry come into their own"
_Ross Murray, Chairman of Rural Asset Management
What price natural capital or environmental services? Still unresolved, but a significant opportunity. With the carbon market in its infancy we will need to do the maths carefully as we are weaned off subsidy.
My sense is that in the new world of monetary finance, with governments funnelling money into the economy to support livelihoods and businesses, investors will search for safer havens for their capital. It is now that real assets such as farmland and forestry come into their own.
The caveat is that agriculture needs to further specialise, while farmers better understand the opportunity that conservation payments provide. Mechanisation is essential to de-risk vulnerabilities of vegetable and fruit farming. Regenerative agriculture is the new religion while rewilding will be the choice for some.
Will our new found love of locally sourced food become a permanent shopping habit? Only in part, and the imbalance of advantage between producer and retailer still needs addressing by government.
What will the post-Brexit trade situation bring? Cheaper food from abroad, surely, whatever the romanticism around food security. Ergo watch your costs of production and/or secure value-added local markets.
Will we holiday more at home? Certainly, and this is an immediate upside for providers of accommodation.
But hanging over all of this is the climate change dilemma. Imagine a world where permanent temperature rise and weather volatility moves whole populations and changes land use. That is when governments really earn their corn. And then rural Britain will be more appreciated and properly valued.