The Knight Frank Rural Property and Business Update – 10 May

Defra minister George Eustice is caught between a rock and a hard place. Dissed on the one hand by farmers (despite being one himself) for not having a coherent plan in place to help them manage the post-Brexit transition away from area-based support payments, and castigated on the other by his own department for not doing enough to cut the farming industry’s carbon emissions. The minister and UK farmers might be looking enviously to Australia where farmers are making big money out of pioneering deals selling soil carbon credits to the likes of Microsoft. There is a solution for Mr Eustice, he just needs to look in the right place.

Please do get in touch with me or my colleagues mentioned below if you’d like to discuss any of the issues covered. We’d love to hear from you

Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Oilseed rape continues to gain
• Climate Change – Defra slammed for lack of progress
• Nitrogen – Uproar over Welsh NVZ rules
• Have your say – Take our Rural Sentiment Survey and win wine
• Overseas news – I’m still farming cattle, not carbon, says Oz beef man

Commodity markets – Oilseed rape continues to gain

Last week I visited a very large estate in Hampshire. From a highpoint overlooking the property yellow fields were noticeable by their rarity. The owner told me it just wasn’t worth growing OSR following the ban on neonicotinoids. But for those who have managed to get a crop out of the ground prices continue to rise. Prices are over 50% higher than they were this time last year. Beef values have also surged (up almost 25% on the year), but some are speculating that the market has peaked. Much will depend on the impact of the food service sector reopening further next week when small groups will (hopefully) be able to dine inside pubs and restaurants. The AHDB offers a global perspective on the price rises: “The FAO global food price index rose for its 11th straight month to April to 120.9. This is a seven year high and a 30.7% increase from April 2020. This is the fastest rise in food inflation levels since 2011,” points out analyst Alex Cook.

Climate Change – Defra slammed for lack of progress

Defra has been embarrassed by a leaked departmental memo that claims it has no plans on how to achieve the carbon emission reductions that will be needed if the government is to hit its own 2050 net zero aspirations.

As reported in The Times, the memo reveals Defra officials are concerned that at present ministers have no agreed plan to meet the reductions in carbon emissions over the next 30 years that have been set by the Climate Change Act.

“Defra is currently not on track to deliver against its greenhouse gas emission reduction targets for CB [carbon budget] 4, 5, 6 and does not have an agreed policy pipeline that allows us to meet them,” it states.

Defra minister George Eustice is also accused of being too close to the farming and sector and not sufficiently leveraging the opportunities presented by Brexit to incentivise farmers to cut emmissions.

There have also been reports, says The Times, that Carrie Symonds, Johnson’s fiancée and an environmental campaigner, has expressed dissatisfaction with Eustice.

Read the article in The Times

Nitrogen – Uproar over Welsh NVZ rules

Welsh farming union NFU Cymru has launched a legal challenge against the Welsh government over its decision to declare the whole of Wales a nitrogen vulnerable zone as part of its campaign against water pollution.

As part of its case, the union is challenging the government’s failure to include a derogation in the new regulations that was available under previous NVZ rules. The derogation allowed farms with 80% of their grassland in an NVZ to have a higher nitrogen loading limit.

Without the derogation, dairy farmers claim they will have to cut herd numbers to unsustainable levels or buy more land, which would be prohibitively expensive.

For advice on Welsh landownership matters please contact our expert Eddie Holloway

Have your say – Take our Rural Sentiment Survey and win wine

The next edition of The Rural Report, our annual publication for rural property owners and their clients, will be out in June. A key part of the report is the Rural Sentiment Survey, which helps us to track the issues of most concern to our clients.

We’d be delighted if you’d like to take part in the survey. As a token of our appreciation all respondents will go into a draw to win a case of amazing English wine from one of our clients Sharpham Wine.

Take the Survey

Overseas news – I’m still farming cattle, not carbon, says Oz beef man

Despite banking $500,000 by selling soil carbon credits to Microsoft earlier this year, Stuart Austin, General Manager of Australia’s Wilmot Cattle Company, says the sequestered soil carbon was one outcome, or ‘co-benefit’, of the property’s grazing strategy, not the primary objective.

“The decisions we make every day are purely based on our beef production business,” explained Mr Austin in an interview with Beef Central.

Please contact our carbon guru Tom Heathcote if you’d like advice on how to cut the emissions from your farm or estate

Photo by Tobias Keller on Unsplash