Weekly rural property and business update 3rd August

Commodity markets

All flat in terms of the main commodity prices this week. However, in response to rock-bottom wool prices, which we recently reported on, a sheep farmer has launched a petition urging the government to ensure the fibre, an excellent form of insulation, is part of its latest drive to help make the UK’s homes more energy efficient. Sign the petition.

In terms of livestock by-products, the leather sector is also reeling from a global drop in demand due to increased use of synthetic materials and exacerbated by Covid-19. Export prices for cattle hides are down by 60% over the past five years, reports Farmers Weekly.

National Food Strategy – initial report says trade policy must respect environment

Part one of the National Food Strategy, commissioned by former Defra Minister Michael Gove and overseen by food entrepreneur and campaigner Henry Dimbleby, has just been published.

It contains “urgent recommendations to support this country through the turbulence caused by the Covid-19 pandemic, and to prepare for the end of the EU exit transition period on 31 December 2020”.

The two main areas of focus address the need to better meet the dietary requirements of disadvantaged children and post-Brexit trade agreements.

In terms of trade, the report sets out three recommendations:
1. Import tariffs should only be reduced on food that meets minimum welfare, environmental and climate change standards. So beef from land carved out of the Amazon rainforest would not be allowed.

2. The government should adopt a statutory responsibility to commission and publish an independent report on any proposed trade agreements.

3. The government should adopt a statutory duty to give parliament the time and opportunity to properly scrutinise any new trade deal.

As they stand the recommendations, if adopted by the government, appear to chime with many of the concerns of the farming industry regarding food imports.

However, they do not go as far as the (failed) amendment to the Agricultural Bill that proposed a blanket ban on the import of all food produced to lower standards than those required of UK farmers.

Part two of the strategy’s recommendations, the first detailed root-and-branch review of the UK’s food chain in 75 years, will be published in 2021 and will be followed by a government white paper that could be crucial in shaping the future direction of British agriculture.

These are likely to be more contentious as they will address farming’s role in mitigating climate change

Find out more about the National Food Strategy and its recommendations. It is worth a read.

Rural broadband – is the countryside getting connected at last?

Poor rural broadband is one of the biggest bugbears for our clients, according to the annual Knight Frank Rural Sentiment Survey.
But hopefully this is set to change in the not-too-distant future following an announcement from network provider Openreach that it plans to install full-fibre broadband to an additional 3.2 million homes and businesses in the “hardest-to-reach” parts of the UK by the mid-2020s.

And not a minute too soon. Anybody working from home with children also distance learning during the Covid-19 pandemic, let alone trying to run a business, will know the pain of poor broadband.

Better connectivity will help unlock the economic potential of rural areas and allow the entrepreneurship of many more landowners and businesses to be unleashed.

Environmental requirements – government announces a cut in red tape

Defra has announced that the “greening” elements of the Basic Payment Scheme (BPS), such as the three-crop rule, which had to be implemented by farmers to unlock 30% of their BPS cash will no longer apply as of next year.

Although this means farmers will have to do less to receive their full BPS payment, it is worth noting that Defra still plans to taper BPS payments from next year. The biggest claimants will see their support cheques cut by as much as 25%.

Tom Heathcote, Head of our Agri-Consultancy team, says: “Although introduced with the best intentions, greening has unfortunately contributed very little for the environment since it was introduced.

“For many farmers, in particular smaller ones, the three-crop requirement was an unwelcome headache and so this announcement will be welcomed by the industry.

“This is the first step towards a simplified subsidy system and it will be interesting to see what other changes are announced during the transition period.”

Please contact Tom for more information on how to farm in the face of declining BPS payments.

Planning – change of use for residential development made easier

Recent reforms of the planning system designed to alleviate some of the economic impact of Covid-19 could make it easier for rural businesses to convert unused business premises into residential dwellings.

For an outline of the changes please see this handy guide from our planning team.

Discover more about the farms and estates that Knight Frank is selling.

Photo by Illiya Vjestica on Unsplash