The wild west of carbon offsetting

Given that billions are being pumped into voluntary carbon markets you’d think they might be highly regulated. Nothing could be further from the truth and last week’s revelations that rainforest offsetting credits sold to a range of high-profile businesses by the sector’s leading player could potentially be useless will only add to the scepticism. It can be slightly frustrating when businesses fail to make plans for the future because they say they are waiting for the government to clarify its own strategies, but when it comes to trading carbon or natural capital it seems a highly prudent move. To be fair, the UK government’s Woodland and Peatland Carbon Codes are recognised as market leaders in the world of voluntary carbon offsets, but much more needs to be done to ensure the wider market delivers a fair deal for both landowners and the environment.

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 – Dairy falls expected despite record inflation
• Carbon offsets – Rainforest scheme slammed
• Grant funding – Cash for innovation soon available
• Rural crime – Council ruling opens the gate 
• Land values – Farmland 2022’s top-performing asset
• Country homes – Prices ease
• On the market – Wilts bare land for sale
• Staff salaries - New benchmark report released
• International news – US researchers uncover dual use solar

Commodity markets – Dairy falls expected despite record inflation

Food prices rocketed to record levels during December, according to the latest official figures. Although overall inflation eased back slightly to 10.5% at the end of the year, the cost of food rose almost 17% in the 12 months to December. This wallet-busting growth was the highest since 1977, said the Office for National Statistics. Milk, cheese and eggs enjoyed some of the biggest rises, but farmgate milk prices are forecast to fall over the coming months, suggests Nick Holt-Martyn of The Dairy Group consultancy. “Our latest milk price forecast, based on current prices and the latest market returns, suggests the Defra farm gate price will ease to 49.0 in January and 47.5ppl in February.”

Carbon offsets – Rainforest scheme slammed

Offsetting schemes that promise to help in the battle against climate change have come under the spotlight recently. The main criticism is that they offer a convenient way for polluters to continue emitting greenhouse gases, but an investigation into credits offered by Verra, the leading player in the £1.6 billion voluntary offsets market, questions whether they work at all. The study claims that more than 90% of Verra’s rainforest offset credits do not represent genuine carbon reductions. Verra does strongly deny the allegations, but they chime with the findings from a recent report from the UK’s Climate Change Committee that questions the efficacy and regulation of the rapidly growing voluntary carbon market. That report did, however, pick out Defra’s Woodland and Peatland Carbon Codes as examples of best practice.

Grant funding – Cash for innovation soon available

A further £850,000 of cash will shortly up for grabs under the third round of the government’s Research Starter Competition, part of its Farming Innovation Programme. Applications should address a significant industry challenge or opportunity in at least one of the four industry subsectors: livestock, plants, novel food production systems and bioeconomy and agroforestry. Projects that show promise could qualify for more substantial funding under other schemes.

Henry Clemons, our grants guru, says the scheme is an exciting opportunity for rural property owners. “It gives businesses and forward-thinking people the opportunity to try out, develop and grow ideas that would often otherwise be ignored. This type of funding often seems weighted towards tech or larger companies and I have often felt that growers and producers are put off applying for such funding. But I don’t think they should be and if a business is doing something new to improve their outcomes and costs then it could be worth further investigation.”

The application window runs from 30 January to 8 March.

Rural crime – Council ruling opens the gate

A Buckinghamshire farmer has hit the national press following a court notice from his local council ordering him to remove a number of concrete blocks he’s put in place to stop his fields being destroyed by joyriders. As a Buckinghamshire resident I often see these blocks in gateways and they aren’t particularly pretty, but the picture accompanying this article that I took recently shows why they are needed. Fly tipping consistently ranks at the top of the list of issues most affecting food producers, according to our annual Rural Sentiment Survey and it seems unfair to take away a quick and relatively cheap way of preventing it.

Land values – Farmland 2022’s top-performing asset

As predicted, the latest results of the Knight Frank Farmland Index show that agricultural land as an investment beat inflation in 2022 and outperformed other asset classes, including mainstream house prices, luxury London house prices, the FTSE 100 share index and even gold. According to our index the average value of farmland rose by 13% over the year to hit over £21,000/ha, a record high. A shortage of supply and continued strong demand from a wide range of buyers underpinned the market. Download the full report for more facts and figures.

You can also hear some thoughts from my colleagues and me on the outlook for property markets in 2023 in the latest edition of Intelligence Talks, our research podcast.

On the market – Wilts bare land for sale

A 192-acre block of arable land at Fosbury, near Marlborough, has just been launched by our Farms & Estates team. The guide price is £1.8 million. Get in touch with Alice Keith to find out more.

Country homes – Prices ease

Amid the excitement of farmland’s inflation busting performance in 2022 I neglected to share the results of our Country house Index, compiled by my research colleague Chris Druce. On average, prices slipped by just under 1% in the third quarter of the year, but are still 18% above pre-pandemic levels. “The prime country market is shifting back to something closer to pre-pandemic normality as the ‘escape to the country’ trend fades after what has been a record-breaking period. However, transaction volumes are resilient despite an increase in buyer caution,” says Chris.

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.

International news – US researchers uncover dual use solar

Solar panels on farmland have come in for a bit of a kicking of late, but I’ve long argued that farming and renewable energy production aren’t mutually exclusive. Now new research from Davis University in California reveals that generating electricity with photovoltaic panels utilises a different section of the light spectrum (blue) than that required for photosynthesis (red). This opens the door for transparent solar panels that can be positioned above crops. You might have trouble driving your combine underneath them in a field of wheat, but it could work for certain horticultural crops.

Human waste safe to use

Using recycled human waste such as faecal composts as nitrogen fertiliser can be safe to use on food crops and increase soil carbon content. The study by German scientists tested more than 300 chemicals in faecal compost, including pharmaceuticals, flame retardants and insect repellents. Just 6.5% of these were detected, all at very low levels. In fact, you would need to eat 500,000 cabbages to ingest the equivalent of an ibuprofen painkiller tablet. The study also showed that recycled human waste could give similar yields to conventional nitrogen fertilisers. In addition, the researchers estimate that, if correctly prepared and quality controlled, up to 25 per cent of conventional synthetic mineral fertilisers in Germany could be replaced by ones recycled from human urine and faeces.

Main image by Kanenori from Pixabay