Rural property and business update – 12 October

Commodity markets

Average finished lamb prices have fallen back slightly with reports that the harsh weather conditions are affecting quality in parts of the UK. There are also concerns that stricter Covid-19 lockdown conditions could dampen prices if pubs and restaurants are forced to close. Grain markets continue to trade in the right direction, but farmers will be hoping that the rally in oil prices does not last too long.

The Agriculture Bill – Lords amendments set to be thrown out

The controversial Agriculture Bill, which will allow the government to implement its own farming policy post-Brexit, hits the House of Commons today (12 October) for the last time.

However, it seems that the government is in no mood to accept the farmer-friendly amendments to the bill inserted by the Lords. These included a legal requirement that imported food would match domestic environmental and welfare standards.

In an appeal to MPs to spurn the amendments during the bill’s third reading, Defra Minister Victoria Prentis claimed this would make it more difficult for the UK to strike future trade deals. But, in any case, she added that the government had already pledged in its manifesto not to compromise on standards during trade negotiations.

Some might see an element of contradiction in these two statements and sticking to a manifesto pledge is somewhat different to setting longer-term policy.

Speaking as part of a recent Farmers Weekly webinar on the future of farming economist Sean Rickard was blunt: “Let’s be clear, the government is not going to agree to have its hands tied in trade deals.”

There are two reasons for this. First, in the eyes of government agriculture will be a relatively small part of future trade deals – the bigger prizes will be elsewhere. Second, many voters increasingly have little choice but to shop based on price – expensive food has never been a vote winner for any government so cheaper imports may not be entirely unwelcome.

Food producers will, therefore, either need to become more efficient while pressing the case for a farm support system that allows them to compete with cheaper imports while maintaining their high standards (see below); ensure what they produce is sufficiently differentiated (backed up by a strong public message) that imports are no longer a threat; or create new alternative income streams from their land.

For innovative ideas to safeguard the future of your farm post-Brexit please contact Tom Heathcote, our head of Agri-Consultancy

Farm support 1 – NFU proposes new sustainability model as Defra dithers

As farmers continue to wait anxiously for more details of Defra’s new Environmental Land Management Scheme (ELMS) - due out in November, apparently - 10 farming organisations have tried to influence government thinking with their own White Paper launched last week.

The Sustainable Food and Farming Scheme (SFFS) aims to ensure sustainable agriculture, rather than environmental land management, is the main driver of future government agricultural policy. 

NFU President Minette Batters said: “Fundamentally, we do not want farmers or land managers to face the dilemma of producing food or conserving their land. Our shared goal is that farming should be to grow food, fibre and energy, while delivering more for the environment and biodiversity.”

Unlike ELMS, which is not due to kick in until 2024, SFFS would start from 2022. But like ELMs it would include three tiers ranging from sustainable practices that could be applied by all farming businesses to large-scale habitat restoration or climate change mitigation.

Read the Sustainable Food and Farming Scheme White Paper

Farm support 2 – Final round of productivity grant scheme opens

Farming businesses can apply for grants of up to £12,000 towards new machinery and technology as part of the third and final round of the Countryside Productivity Small Grant scheme.

The grant covers 40% of costs and is targeted at purchases that boost such things as better nutrient management and improved animal welfare. The deadline for applications is 4 November.

“Despite all of the turmoil in the economy and uncertainties around future UK agricultural policy, it is encouraging to see that DEFRA has launched,” says Tom Heathcote, our Head of Agri-Consultancy. 

“The previous two rounds were popular and I expect this final round to be oversubscribed. The application process is straightforward and with 40% grant funding available it represents a real opportunity for farmers to replace or purchase new equipment,” adds Tom. 

Contact Tom and his team for advice on how to benefit from the scheme

Covid-19 update – Knight Frank Rural team publishes handy business guide

As the next phase of the pandemic slowly tightens its grip on the UK, many rural businesses will once again be wondering what it all means for them. To help out, our Rural Asset Management Team has produced a handy guide to the potential threats and the various Covid business support schemes.

Read Covid-19 and Rural Estates

Photo by Lawrence Hookham on Unsplash