All change at Defra and Nature recovery

Rural communities and organisations across the UK are mourning the death of the Queen. Although there is intense sadness at her passing, the long life of somebody who was a country woman through and through and supported many rural causes has been fondly remembered and celebrated with a deep sense of gratitude.

Many readers will no doubt have their own stories and recollections – one of my first memories is of enthusiastically waving a flag over four decades ago when the Queen paid a visit to the newly built Milton Keynes Shopping Centre in 1979.

The former Prince of Wales, now King Charles III, is also a passionate advocate for the food production and farming sector with a particular enthusiasm for environmentally friendly farming. Although as sovereign his public pronouncements may be less pointed, he will no doubt continue to have a profound influence during a period of great change for the agricultural sector.

Do get in touch if we can help in any way. 

Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Time to lock in wheat gains?
• Politics – All change at Defra
• Landscape recovery – First schemes announced
• Rural funding – New cash announced

Commodity markets – Time to lock in wheat gains?

Farmers might want to lock into more bullish wheat market sentiment as Vladimir Putin’s sabre-rattling over gas suppliers and grain shipments last week spooked markets, advises my new colleague Andrew Martin, who has just joined our Agri-consultancy team.

Andrew also says budgeting a forecast cost of production based on high fertiliser prices will give farmers a better feel for when to sell grain forward and take a profit. “It’s always sensible for businesses to lock in some profit to ensure the ability to pay rents and interest comfortably.” Deadweight pig prices meanwhile touched 200p/kg for the first time, but this comes against a background of rising costs.

According to Defra’s latest index of agricultural inputs, prices have risen by 33% over the past 12 months. The cost of red diesel did follow forecourt prices down last week, but a litre still costs over £1 compared with 60p/litre this time last year.

Politics – All change at Defra

Ranil Jayawardena became the eighth secretary of state at Defra in the past ten years when he took over from George Eustace last week following an immediate cabinet reshuffle and purging of Rishi Sunak supporters by new Tory leader and Prime Minister Liz Truss.

It’s fair to say that of Mr Jayawardena’s predecessors, of whom Miss Truss was of course one, only Michael Gove left any real legacy, so expectations will be low. Whether the new 36-year-old incumbent, MP for North East Hampshire and former Minister for International Trade, will buck the trend remains to be seen, but as an advocate of free trade with seemingly lukewarm views on renewable energy, he is cut from the same cloth as his boss.

While this might ring some alarm bells about future trade agreements that could be to the detriment of farmers, it could also lead to government policy towards farming being less environmentally driven with more focus on innovation and efficiency to deliver greater food security.

Defra Farm Minister Victoria Prentis has moved to the Department for Work and Pensions. She has been replaced by former government chief whip Mark Spencer, a farmer and East Midlands MP who studied at Shuttleworth Agricultural College in Bedfordshire.

We’ll have a more detailed analysis of what the new Conservative government might mean for the food and farming sector in a future edition of The Rural Update.

Landscape recovery – First schemes announced

Defra has just announced the first 22 projects to receive funding under the government’s new Landscape Recovery Scheme. Enfield Council, a client of Knight Frank’s Rural Asset Management team, was one of the successful applicants with a project to help restore historical Enfield Chase.

James Shepherd, who advises the council, tells me: “It’s not just private landowners who are looking to use their land and its associated natural capital to deliver environmental benefits, many of our public sector clients are also increasingly proactive.” For more information please get in touch with James.

Rural funding – New cash announced

Aside from the support payments received directly by farmers via the EU’s Common Agricultural Policy, a significant amount of funding through various other European schemes such as LEADER found its way into the UK’s countryside to support rural development initiatives.

How that cash would be replaced post-Brexit was a concern for many, but now the government has released further details for English local authorities. A £2.6 billion Shared Prosperity Fund had already been announced earlier this year, but now this has been topped up by £110 million of additional funding – the Rural England Prosperity Fund - targeted specifically at rural communities in qualifying local authorities.

The fund will provide capital funding to support new and existing rural businesses to develop new products and facilities that will be of wider benefit to the local economy. This includes farm businesses looking to diversify income streams.

It will also support new and improved community infrastructure, providing essential community services and assets for local people and businesses to benefit the local economy.

According to the government, the funding should not replace funding plans for rural areas under the UKSPF. It is a top-up to help address the extra needs and challenges facing rural areas.

If you need help with any rural grant schemes, please contact Henry Clemons who has just joined our Agri-consultancy team.

Photo by meriç tuna on Unsplash