UK rural property: Dealing with carbon emissions
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
8 minutes to read
Opinion
I cover a story on Nestlé below, a huge global player in the food business that seems to have changed its mind on how it is going to deal with its value chain and operational emissions. Carbon offsetting has been a means by which companies have tried to deal with their carbon emissions. But when it’s done without significant effort to actually reduce them as part of their operations you do have to question whether an element of greenwashing is taking place. So, there is some credit due to Nestlé which is trying to tackle emissions at source and simply not off load the issue. This resonates with another of our stories about a project looking at using genetics to reduce methane emissions from sheep. It does, however, raise an interesting point about the longer-term impact this change by Nestlé and other companies will have on the burgeoning carbon credit markets and global emissions. Only time will tell MT
Do get in touch if we can help you navigate through these interesting times. You can sign up to receive this weekly update direct to your email here
Andrew Shirley Head of Rural Research; Mark Topliff, Rural Research Associate
In this week’s update:
• Commodity markets – Grains fall, oilseed rises
• Carbon offsetting – Food giant changes tack
• Glyphosate – EFSA say no critical areas of concern
• Inheritance tax – Unions clash on proposal
• Sheep – Can genetics reduce emissions?
• Hedgerows – Consultation on their protection
• Gun laws – Government consult on licensing
• The Rothbury Estate – Biggest opportunity in decades
• The Rural Report – 23/24 edition is out now
• House prices – Country homes take a dip
Commodity markets
Grains fall, oilseed rises
Slow demand and the lack of export competitiveness are continuing to undermine the UK’s grain position. Aggressively priced barley and maize imports are reducing wheat and barley demand, not only in the UK but also in Southern Europe. This is also reducing the opportunities for wheat exports to these destinations.
On the flip side, oilseed rape spot prices rose on the week. It’s suggested that its partly down to support in the soybeans markets and Strategie Grains lowering its 2023 forecast for EU rapeseed production by 600,000 tonnes.
With harvest soon to start for many, Knight Frank agri-consultant Andrew Martin advises “to keep an eye on the markets as well as their oilseed rape ripen and not to miss a market opportunity even if they are busily desiccating or combining their rape crops” MT
Talking points
Carbon offsetting – Food giant changes tack
One of the world’s biggest food companies, Nestlé, has said it is moving away from using carbon offsetting to focus on reducing emissions in its value chain and operations. Like so many companies, Nestlé had set out a commitment to achieve net zero greenhouse gas emissions by 2050. According to esgtoday.com, “95% of Nestlé’s GHG emissions come from the company’s value chain, including around two-thirds from sourcing ingredients, and only around 5% from its direct operations. One of the company’s key emissions reduction initiatives includes advancing regenerative agriculture and farming practices, such as improving soil health, integrating trees into livestock foraging areas, switching to organic fertilisers and increasing the ability of farmland to store carbon. The company has pledged to invest CHF 1.2 billion in regenerative agriculture initiatives across its supply chain by 2025 and to source 50% of its key ingredients through regenerative agriculture methods by 2030.” MT
Glyphosate – EFSA say no critical areas of concern
No critical areas of concern were identified in a European Food Safety Authority (EFSA) risk assessment of the impact of glyphosate on the health of humans, animals and the environment. A critical concern is when the chemical affects all its proposed uses, such as pre-sowing, post-harvest etc. This news could mean that the glyphosate licence will be renewed by EU member states which was due to end on 15 December 2023.
However, there were some data gaps in the assessment, covering issues that couldn’t be finalised, including the toxicity of one of the components present in the chemical formulation. It also looked at ecotoxicity, which identified a high long-term risk to mammals in 12 out of 23 proposed uses of glyphosate. The full EFSA assessment will be published at the end of July 2023. Whether you love it or hate it, glyphosate could be around for a while longer MT
Inheritance tax – Organisations clash on proposal
Farmers Weekly reports this week on a clash between farming unions and landowner organisations on HMRC’s proposal to restrict Agricultural Property Relief (APR) to farm business tenancies with a minimum term of eight years. The proposal was included in a consultation on the wider aspect of taxation of ecosystem services that closed last month. According to the Farmers Weekly both the Country Land and Business Association (CLA) and the Central Association for Agricultural Valuers (CAAV) both strongly oppose the proposal with a warning it could lead to the loss of 200,000 hectares from the let market. It could also hamper new entrants, the CLA says.
However, the Tenant Farming Association (TFA) completely agrees with the proposal and would prefer an initial term of 10 years, without fixed break clauses, before being eligible for 100% APR. The association doesn’t think restricting APR this way will affect freedom of contract. Increasing the average length of farm business tenancies (FBTs) is supported by the National Farmer’s Union (NFU) but it wants Defra to undertake a modelling exercise to evaluate the possible risks. It will only support the proposal if it is likely to lead to longer-term FBTs without reducing available land for renting MT
Sheep – Can genetics reduce emissions?
Defra is funding a three-year project that is exploring using genetic selection to reduce methane emissions. The £2.9 million initiative will measure emissions from 13,500 sheep across 45 flocks in Britain. If the researchers can identify those sheep with a naturally low carbon footprint that combines with feed efficiency, productive lifetime efficiency and health, it could go a long way to selecting breeding lines that are more sustainable economically and environmentally. About 50-60% of a sheep farm’s carbon footprint comes from methane emissions, and the industry has targeted to reduce this by 30% by 2030.
One of the stories in this year’s The Rural Report looks at ear tag technology that can monitor emissions from cattle. Read about this and other case studies and insight on all rural matters regarding carbon emissions and natural capital opportunities MT
Need to know
Hedgerows – Consultation on their protection
Hedgerows are a common landscape feature and an important environmental element for many parts of the country. Now Defra has launched a consultation on how to get the right level of protection for English hedgerows as cross-compliance is removed. The consultation which will run until 20 September 2023, is seeking views on the best way to maintain and improve existing protections. It also contains questions about buffer strips and cutting dates.
Hedgerows are seen as having a plethora of environmental benefits, including being significant carbon sinks.
The government aims to create or restore 30,000 miles of hedgerows by 2037 and 45,000 miles of hedgerows by 2050. It would like to return English hedgerow lengths back to 10% above their 1984 peak of 360,000 miles MT
Gun laws – Government consult on licensing
The government are consulting on whether legislative changes are necessary to the licensing of firearms. It follows the recommendations given after a licensed shotgun owner killed several people in Keyham in 2021 and the fatal shooting on the Isle of Skye in 2022. The proposed changes involve the legislation on firearms licensing and possible changes to the system of referees. It also considers changes in other areas of firearm licensing, such as whether neurodevelopmental disorders should be added to the list of relevant medical conditions in the Statutory Guidance (and application form).
The consultation is open until 23 August MT
On the market
The Rothbury Estate – Biggest opportunity in decades
One of the UK’s most prestigious estates, The Rothbury Estate, is on the market. Comprising 9,486 acres, it boasts an incredible variety of landscapes that offer a huge amount of opportunity for farming, country pursuits and natural capital solutions. It is steeped in the rich heritage and history of Northumberland and the biggest ring-fenced property to come on the market for 30 years.
Rothbury has a guide price of £35 million. For more information, contact Will Matthews or Claire Whitfield and check out the film MT
Knight Frank Research
The Rural Report – 23/24 edition is out now
The Rural Report 23/24 explores the opportunities for businesses, people and this year’s theme ‘Planet’. With insight and case studies on natural capital, biodiversity net gain and environmental legislation, it’s a guide to the ever-changing rural landscape and how Knight Frank’s rural teams are supporting their clients make the most of the opportunities on offer.
Whether you are a rural business owner or a commercial business wanting to make the most of your land, read a selection of articles online and download the full report here MT
House prices – Country homes take a dip
The average value of country houses fell by 0.5% in the first quarter of the year as the cost of borrowing continued to rise, according to the latest findings from the Knight Frank Prime Country House Index. On an annual basis prices have dropped by 0.8%. Demand remains strong, but transaction numbers fell in the aftermath of Liz Truss’s mini budget last autumn. “Ultimately, despite resilient demand, we expect the reduction in spending power caused by the increase in the cost of borrowing and improved supply to see prime regional prices decline by a few percentage points in 2023,” predicts my colleague, Chris Druce AS