The Rural Update: Harness the countryside’s green power
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
6 minutes to read
Viewpoint
It’s hardly surprising, as discussed below, that some within the agricultural sector have questioned the government’s decision to spend £22 billion establishing hi-tech industrial carbon-capture hubs when it seems unable to commit to supporting its existing environmental schemes that are proven to mitigate climate change and restore nature.
With the right incentives, farmers and landowners are ready to plant more trees, restore more nature and adopt more regenerative farming practices. The establishment of official soil carbon and biodiversity codes would also encourage more green investment into the sector.
In addition, the government is going to need the help of rural businesses to deliver its 30x30 commitments, which are in peril, according to a new report highlighted below. Creating shiny, new industrial plants may be more politically attractive than supporting farmers but downplaying the carbon-capturing potential of the countryside would be a mistake.
Commodity markets
ME tension boosts grains
Iran’s missile attack on Israel last week spurred speculative short sellers into action with Paris and Chicago wheat futures hitting quarterly highs. Trader Frontier said: “There may not be any direct impact on global grain flows at this stage, but with energy prices up 7% on Tuesday and fears for an escalation of hostilities in the Middle East, short covering in wheat markets to reduce risk seems likely to continue.” Too little rain in parts of Russia and too much across large areas of Europe is also helping to support prices.
Nature restoration risk
Pressure is mounting on the government to deliver on its environmental commitments in the run-up to COP16, the annual international biodiversity conference due to be held in Colombia later this month. A new report from Wildlife and Countryside Link says the amount of land in England that is considered protected for nature has fallen to just 2.93%, down from 3.11% last year.
The calculation is based on the area of SSSIs (sites of special scientific interest) considered to be in good condition (34.67% of around 1.1 million hectares). In 2020, Boris Johnson committed to protecting 30% of the UK for nature by 2030.
As well as repairing damaged SSSIs, the campaign group says the government also needs to boost the pipeline of land that could contribute to the 30x30 target, either through designation as protected areas or identification as potential OECMs (other effective area-based conservation measures).
News in brief
Carbon capture query
Farmers have questioned the government’s decision to spend £22 billion on establishing untested, hi-tech carbon capture hubs when it has failed to commit to maintaining environmental support for farmers at even the current inflation-eroded levels. Writing on X, author and sheep farmer James Rebanks said: “There is NEVER enough money for sensible small-scale, bottom-up solutions that would restore nature and make communities thrive - like sustaining the £2.4 billion ag budget.”
Precision breeding is a go
In a move that has upset some environmental groups who were hoping for a U-turn, Defra confirmed last week that it is happy for the development of gene-edited crops to continue. Speaking at the World Agri-Tech Innovation Summit in London, Minister for Food Security and Rural Affairs Daniel Zeichner announced that the government will pass secondary legislation to unlock the benefits of the Precision Breeding Act, introduced by the last administration, as soon as parliamentary time allows.
Workers’ rights
Keir Starmer is set to introduce a new package of workers’ rights later this week that could make it harder for farms and estates to part company with unsuitable employees and enshrine the right to certain benefits from the first day of employment. More details to follow in the next edition of The Rural Update.
EU food labels dropped
The NFU and food processors have welcomed Defra’s decision to scrap the previous government’s plan to extend the 'not-for-EU' labelling scheme to meat and dairy products sold across Britain. Trade bodies claimed the requirement would cost companies millions, while the NFU said the labels could lead to consumer confusion and misconceptions about the quality of food that UK farmers produce. Following Brexit, meat and dairy products being sent from Britain to Northern Ireland already have to carry the labels to prevent them from being sold in the Republic of Ireland.
The Rural Report – Out now
The latest edition of The Rural Report, our flagship publication for farm and estate owners, looks at the numerous opportunities and challenges arising in the countryside following the election of a new government. Find out more or request a copy.
Bluetongue update
The restricted movement area now covers the following: Bedfordshire, Cambridgeshire, City of Kingston upon Hull, East Riding of Yorkshire, East Sussex, Essex, Greater London, Hampshire (part), Hertfordshire, Kent, Leicestershire (part), Lincolnshire, Norfolk, Northamptonshire (part), Nottinghamshire, Suffolk, Surrey and West Sussex. A case has also been confirmed in Cornwall. You can find the latest updates on the spread of the disease and what measures stock farmers are being advised to take here.
Research
Country houses – Market waits for budget
Discretionary buyers are holding back from a new country house purchase until they find out what Labour’s first budget at the end of the month holds. Offers from potential buyers were down 10% in the three months to August, according to the latest results from the Knight Frank Prime Country House Index. However, the slide in average values has slowed with prices dropping by just 1.2% in the 12 months to the end of September - the lowest annual fall since Q1 2023 - points out Head of UK Residential Research Tom Bill. He predicts a total average price slide of 2% this year, dependent on the outcome of the budget.
Farmland - Values hold firm
The farmland market in England and Wales shrugged off the potential impact of the recent general election to register another quarterly price increase, according to the latest results from the Knight Frank Farmland Index. Average values nudged up by almost 1% in the second quarter of the year to hit £9,335/acre. For more insight and data please download the full report.
Development land - Market stays flat
The value of greenfield development sites remained static in the second quarter of the year, according to the latest results of the Knight Frank Residential Development Land Index. Over the past 12 months the index is down 2%. According to Anna Ward, who compiles the index, developers have welcomed Labour’s commitment to reinstate local housing targets and recruit more planning officers. But with interest rates failing to shift and build costs increasing, homebuilders still face significant headwinds, she adds. Download the full report for more insight and data.
Property of the week
Sky’s the limit for Berkshire block
Anybody with a passion for flying could be interested in this week’s property of the week. The 217-acre block of land at Cranes Farm in the Lambourn Valley at East Garston, near Hungerford, includes a former grass airstrip suitable for light aeroplanes. The land is mainly Grade 3 arable, with about 27 acres of grass and 3.5 acres of woodland. It is entered into the mid-tier of the Countryside Stewardship Scheme and the Sustainable Farming Incentive. The guide price is £3 million. Please contact Georgie Veale for more information.