Rural property and business update - Biocredits, Windpower, Grouse moors

Rereading the articles below looking for a theme for this bit of the Rural Update I was struck by the various ways policymakers are trying to “save” the planet.

In Holland we have a government that wants to spend billions buying farms and shutting them down.

In Scotland the SNP government looks like it believes legislating grouse shooting out of existence is the answer.

The UN thinks a complex biocredits market could be the key.

And then we have Prince William’s Earthshot prize which is handsomely rewarding entrepreneurs for coming up with innovative solutions to some of the world’s most challenging environmental problems.

It’s hard to know which bit of this carrot-and-stick soup will prove most effective, but for any scheme to work it has to start from the bottom up and properly reward and engage those communities responsible for stewarding the land that will deliver the natural capital and nature-based solutions the world needs.

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.

In this week’s update:

• Commodity markets – Crop inflation disappearing
• Renewables – On-shore wind back on the cards
• Scottish grouse moors – Last chance to respond to licensing consultation
• Food security – Shelves won’t be empty for Christmas, says Defra
• Natural capital – UN launches biocredits plan
• Staff salaries – New benchmark report released
• The Farmland market – Video and podcast update
• International news – Coping with climate change in different ways

Commodity markets – Crop inflation disappearing

Based on current trends feed wheat prices could end the year lower than they started it. Following this week’s 5% fall, farmgate prices are only £6/tonne higher than they were 12 months ago. Oilseed rape and lamb prices are already well below where they were this time last year and beef values are heading in that direction, too. The drop highlights the need for farmers to lock into forward prices that offer a good margin rather than constantly trying to sell at the peak of the market, says Andrew Martin of our Agri-consultancy team. “I think there will be quite a few people who missed out because they expected prices to remain high. Despite a fall in natural gas prices, imported ammonium nitrate fertiliser still costs £870/tonne.”

Renewables – On-shore wind back on the cards

Prime Minister Rishi Sunak has bowed to pressure and performed a U-turn on his opposition to new on-shore wind farms, which have effectively been banned in the UK since 2015. Following lobbying by his two predecessors Liz Truss and Boris Johnson, an amendment was added to the Levelling Up Bill that should potentially make it easier to get planning permission for wind farms. In a statement, Department for Levelling Up, Housing and Communities Minister Grant Shapps said: “The government commits to launching a technical consultation to explore how local authorities demonstrate local support and respond to views of their communities when considering onshore wind development in England.”

Robert Blake of Knight Frank’s Energy team welcomed the move, but cautioned against too much optimism from potential wind farm operators: “It’s good news that the government has recognised that on-shore wind has an important role to play in the UK’s bid to become more energy self-sufficient, especially when many rural businesses are struggling to cope with sky rocketing fuel bills, but planning applications are likely to come up against strong local opposition. Meaningful engagement with local communities from the start of the process will be crucial.”

Scottish grouse moors – Last chance to respond to licensing consultation

Anybody with strong views on the Scottish Government’s plans to introduce mandatory licencing for grouse moors and increase restrictions on muirburn (vegetation burning) have just a few days to make their opinions known. The consultation on the Wildlife Management (Grouse) bill closes on Wednesday 14th December. Policymakers say the bill is required to protect the environment and cut the illegal persecution of raptors such as Golden Eagles. But lobby group Scottish Land & Estates claims the proposals are disproportionate, infringe on the rights of property owners and are not backed up by scientific evidence. If you would like a copy of Scottish Land & Estate’s guide to responding to the consultation please email my colleague John Williams.

Food security – Shelves won’t be empty for Christmas, says Defra

Defra has responded to claims by the NFU that the UK’s food security is at risk because farmers are not receiving enough help to cope with rising input and energy costs, plus the impact of avian flu, and many are considering cutting back on production.

Eggs are already being rationed by some retailers, it points out. However, in a blog post Defra claims: “The UK has a large and highly resilient food supply chain. Our high degree of food security is built on supply from diverse sources; strong domestic production as well as imports through stable trade routes.” What I found most interesting was the image chosen to accompany the post. It shows a diverse range of fruit and veg, but most of it looks imported. As long as we’ve got aubergines and mangos we’ll be OK! Ironically, some free-range turkey producers are actually reporting a surplus of stock as panicked shoppers snap up frozen birds instead for their Christmas lunch.

Natural capital – UN launches biocredits plan

The big news so far from COP15, the UN’s biodiversity summit taking place in Montreal, was an attempt by the organisation, in conjunction with the International Institute for Environment and Development, a UK-based think tank, to kickstart a global market in biodiversity credits or biocredits in an attempt to stem biodiversity loss around the world.

Like carbon markets, biocredits are considered controversial by some when used as offsets because they don’t necessarily encourage polluters to cut their own emissions. However, proponents of the scheme believe non-offsetting financial mechanisms can be created that would reward those helping to boost biodiversity, although how those stumping up the cash would be rewarded beyond a sense of altruism and moral purpose is less clear.

Staff salaries – New benchmark report released

Just a reminder that the latest edition of the Knight Frank Estate Staff Salary Survey has recently been published. The report reveals the average salaries paid for a wide range of rural estate and farming roles and level of wage increases being offered by rural businesses. Also highlighted are the key employment issues facing the rural economy. Download your copy here or get in touch with Chris Terrett for more details.

The Farmland market – Video and podcast update

As mentioned previously, our Q3 Farmland Market update, which reveals a sharp annual increase in average farmland values, is out now. If reading research reports is not your thing, I’ve packed the key findings into a 60-second video (below) that you may find interesting. You can also listen to my colleague Jessica Waddington and me discuss the farmland market with Knight Frank’s Global Head of Research Liam Bailey in an edition of our Intelligence Talks podcast.

60 second property digest 

Intelligence Talks podcast

International news – Coping with climate change in different ways

Two approaches to helping agriculture adapt to climate change caught my eye this week. One was an award by Prince William’s Earthshot prize to an Indian entrepreneur who has developed a low-cost “greenhouse-in-a-box” that helps farmers protect their crops from pests and use much less water.

The other was an announcement by the Dutch government that it plans to cut the country’s agricultural greenhouse gas emissions by spending billions of euros buying up almost 3,000 farms and taking them out of production. In the middle of a food security crisis which do you think makes more sense?

To find out more about the Earthshot prize read my interview with CEO Hannah Jones.

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