UK rural property: Oxford sets the tone for 2024

Opinion

The Oxford Farming Conference (OFC) has been the traditional start to the year for many involved with agriculture since 1936, so my first visit last week was probably a little overdue. Truth be told, I was a tiny bit surprised by what lay in wait for me. The dress sense may have been a tad more conservative than that exhibited at the more “alternative” Oxford Real Farming Conference, which takes place a few streets away at the same time and which I attended last year, but all the same it was slightly more touchy feely than I’d expected with lots of emphasis on nature-friendly farming and diversity, and even some tears on stage. Though the fact that Defra minister Steve Barclay used the event to launch a big new environmental initiative (see below) shows it is still the place to be for policymakers. It was also gratifying to see that I’m sometimes ahead of the curve having already interviewed many of the inspiring line up of speakers, including David Mwanaka, Ben Goldsmith, Anna Jones and Tom Warner. Less touchy feely, however, were the findings of the conference’s annual report Is our UK Food Supply Chain Broken?  Predictably, the big retailers got a bit of a kicking from some speakers and contributors, but as was also pointed out they aren’t going away so the industry must learn to deal with them. It will be interesting to see how the theme of OFC 2025 Facing Change, Finding Opportunity is unpacked next year. 

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Andrew Shirley Head of Rural Research  

In this week's update: 

• Commodity markets – Mixed outlook for 2024
• ELMs – Payments boost for 2024
• SFI – New entrants and smaller farmers
• Regen ag – Report says govt need to intervene
• Supply chain – Farmers must negotiate better
• Meat markets – Exploit Halal demand
• Farm tenancies – What future?
• Overseas news – Going Dutch
• Real Oxford – Going mainstream?
• Defra – Farming budget underspent by £227 million
• Pest control – Be prepared for law changes
• Listed buildings – Going green to be easier
• English wine – East Sussex vines for sale
• Development land – Prices still falling 
• Country houses – Prices drop
• Farmland prices – Market at peak?
• The Rural Report – Watch the videos

Commodity markets

Commodities – Mixed outlook for 2024

Grain markets remain in no-man's land at the beginning of the year with weak global demand cancelling out potential upwards pressure from rain-affected drilling and increased uncertainty in the Black Sea region. Increased output by some countries and a cut in the benchmark Saudi contract mean oil prices are also continuing to weaken, despite worries about an escalation of the Israel/Hamas conflict, including attacks on Red Sea shipping by Yemen’s Houthi rebels. Sheep producers, meanwhile, can take heart from an increase in wool values. Prices, however, are still so low they don’t cover the cost of clipping for some breeds, reports Farmers Weekly.

Oxford Farming Conference

ELMs – Payments boost for 2024

Defra’s big unveil at OFC24 was that payments made for actions under the Sustainable Farming Incentive (SFI) and Countryside Stewardship (CS) will be boosted by, on average, 10% from this year. Current recipients will still benefit. Defra minister Steve Barclay announced a raft of updates to the government's Agricultural Transition Plan (ATP). Other notable changes include up to 50 new SFI and CS actions to be launched this summer, such as protecting lowland peat and promoting precision farming and agroforestry. Also, a streamlined single-application service to simplify access to schemes and premium payments for high-impact environmental actions. Additionally, the new 'advise and prevent' regulation approach is a welcome shift in how the Rural Payments Agency works with farmers and land managers where deficiencies are found with implementing the schemes. 

Beyond the Environmental Land Management schemes (ELMs) there was also a commitment to expand permitted development rights (PDRs) – allowing the granting of planning permission in advance for specified types of development.

This year will also see a new grant scheme introduced. Defra says: "we will introduce the Farming Innovation Programme, Fund 3 – Accelerating Development of Practices and Technologies (ADOPT). This will support farmers to test and trial new technology and techniques on farms, potentially helping to reduce labour costs through innovations. For example, GPS tracking collars for sheep or early identification of health conditions in animals."

The changes announced are broadly appreciated and show that the government has listened to some of the criticisms of the ATP, especially around the current ELMs set-up. However, there is still some concern from the unions that the new actions and raised payment rates will noticeably impact agricultural production. Barclay maintains that the changes will help the government meet ambitious environmental targets while sustaining agricultural output. Time will tell, but the plans should make the SFI, CS and other grants even more attractive to apply for. 

SFI – New entrants and smaller farmers

Speaking at a breakout session hosted by Frontier’s Richard Barnes senior Defra civil servant Jonathan Baker also confirmed that the SFI would be open to non-BPS claimants from the summer. He said Defra was still considering whether to lower the five-hectare minimum area for claimants, which would  provide more support and nature-friendly opportunities for smallholders and horticultural enterprises. Frontier’s Jim Egan said Defra “had listened” and the revised SFI options now made it an attractive opportunity for farmers, but they needed to “deliver SFI properly” to ensure it retained its credibility. 

Regen ag – Report says govt need to intervene

Also unveiled at OFC was a NatWest-sponsored WWF report, which urges a transformative shift in England's agriculture policies to support regenerative food production. The roadmap advocates for government intervention that emphasises data harmonisation, regulations for high-integrity carbon markets, and new policies linking food, climate, and nature. The focus is on regenerative farming practices, aligning with biodiversity enhancement and collectively addressing climate, nature, and food security challenges. WWF stresses the need for fair rewards to incentivise farmers to adopt regenerative practices. Something that the SFI updates mentioned above are looking to achieve.

The report highlights collaborative efforts across the value chain, emphasising the government's role in driving a future for farming that aligns with economic and environmental sensibilities. Its research aligns with broader industry efforts, including the Sustainable Markets Initiative's Agribusiness Task Force framework, supported by major players like Mars, McCain Foods, McDonald's, PepsiCo, and Waitrose.

Supply chain – Farmers must negotiate better

The risk-reward ratio has become so skewed that producing food is no longer a sensible option for many farmers. That was one of the findings of the OFC24 report: Is our UK Supply Chain Broken? which was launched last week and is based on in-depth interviews with over 40 producers. Some of the solutions proposed by the report include beefing up negotiating skills, have an iron grip on cost-of-production data, developing farmer-led brands and new marketing channels, and moving away from over-production. 

Meat markets – Exploit Halal demand

One of the most surprising parts of OFC24 was a lively presentation by the AHDB’s Senior Halal Sector Manager Awal Fuseini. He suggested the rapid growth in the UK’s Muslim population and the subsequent increase in demand for Halal produce was something the meat sector should be doing more to exploit, particularly as younger Muslims were becoming more interested in food quality and animal welfare. He also reassured the audience that the vast majority of animals entering the Halal food chain are actually stunned before slaughter, contrary to popular belief.

Farm tenancies – What future?

In an early-morning breakout session, the CAAV’s Jeremy Moody tested the audience’s powers of concentration with his thoughts on the future of the tenanted farming sector across the UK. Fascinatingly, each of the four home-nations have taken a different approach to supporting the sector, with Scotland’s attempts proving the least successful. Although some landowners seem keen to take as much land as possible back in hand, Jeremy said with the right attitude and agreement in place tenancies still made a lot of sense.

Overseas news – Going Dutch

One of the biggest applauses during the conference’s political session was reserved for Dutch politician Caroline van der Plas, who heads up the nation’s Farmer Citizen Movement, which took seven parliamentary seats at last November’s elections. Caroline said losing a critical mass of farmers would be profoundly damaging for any country. “Farmers won’t invest when they aren’t being rewarded for what they do.” Unfortunately for the audience who could taste the political power, the rise of a similar party in the UK’s first-past-the-post electoral system seems highly unlikely.

Real Oxford – Going mainstream?

While I was at the OFC my Agri-consultancy colleague Melissa Walker was at the Oxford Real Farming Conference (ORFC) down the road. Interestingly, while OFC is becoming increasingly pre-occupied with the likes of regenerative agriculture and diversity, ORFC is now attracting more attention from mainstream farmers and professionals, according to Melissa, who shares some of her thoughts below:

ORFC24, the 15th Oxford Real Farming Conference, united 400 speakers and 2,000 attendees across eight venues, with virtual participation. It spotlighted nature-friendly practices, addressing farming policy, sustainable food production, and agriculture's role in achieving net zero. Discussions emphasised increased knowledge-sharing and the benefits of regenerative agriculture.

A session on valuing species-rich grasslands underscored the underreported benefits of floodplain meadows, noting a government target of 70,000ha versus the current 3,000ha. While DEFRA's positive announcement for floodplain payments was acknowledged, speakers emphasised that you can’t just pay people to do stuff, they need to connect with it to deliver. 

A talk on reconciling farming and academic research addressed the 'disconnect' between farmers and researchers in agroecological research. The imperative to 'co-create' research involving farmers was stressed, challenging the pitfalls of an 'extractive' relationship. Speakers advocated for aligning research questions with farmers' needs and recognising innovative farmers' expertise.

A session on bale grazing as an effective outwintering strategy highlighted cost savings of around £1.50 per head vs wintering in the shed.

Notably, there was a shift in attire, with more attendees donning Schöffel’s and tweed, suggesting a growing acceptance of the agroecological movement.

Talking points

Defra – Farming budget underspent by £227 million

The announcement that SFI and CS payment rates will increase will probably come as no surprise when it's seen that Defra has underspent the last two years of its farming budget by £227 million. According to The Guardian, figures from Defra show an underspend of £110m in 2021-2022 and £117m in 2022-2023. The government pledged that by the end of this parliament it would spend £2.4 billion a year on farming as the industry transitions away from the EU's CAP model. Off the back of this and in the lead-up to a general election, we may expect more announcements in 2024 to expand the funding of Defra schemes.

Need to Know

Pest control – Be prepared for law changes

Farms and estates are urged to prepare for a significant shift in access to second-generation anticoagulant rodenticides (SGARs) within the next two years. Under the UK Rodenticide Stewardship Regime, applicable to pest controllers, gamekeepers, and farmers, major changes will take effect from January 2026. Buyers and users of SGARs must possess a stewardship-specific training certificate less than five years old or an older one with proof of stewardship-specific Continuing Professional Development (CPD) scheme membership. Despite resistance, the Campaign for Responsible Rodenticide Use UK (CRRU) emphasises the need for change to achieve wildlife protection goals, especially regarding SGAR residues in barn owls, prompting these regulatory enhancements.

Listed buildings – Going green to be easier

Making energy efficiency improvements to older houses, especially those which are listed or in conservation areas, has often been frustrating for owners, so a new review published by the government last week could offer some hope for those looking to cut their energy bills and emissions.  Adapting Historic Homes for Energy Efficiency: A Review of the Barriers contains a number of proposals including the creation of new National Development Management Policies (NDMPs), featuring a policy specifically for improvements to historic buildings to ensure greater certainty and consistency about decisions on applications for energy efficiency improvements affecting listed buildings and buildings in conservation areas across England. There will also be a consultation on the opportunities for using Local Listed Building Consent Orders to support energy efficiency improvements on listed buildings. 

On the market 

English wine – East Sussex vines for sale

The Rural Update doesn’t believe in “Dry January” so we’re delighted that our specialist viticulture team is kicking off 2024 with the launch of a 33-acre East Sussex property belonging to a well-respected wine producer. The sale, which is guided at £1.9 million, includes 15 acres of vines, a winery, other buildings and wine in stock. Please contact our English wine guru Ed Mansel Lewis for more information.

Our Latest Property Research

Development land – Prices still falling

The latest findings from our Residential Development Land Index show values are continuing to fall. “UK greenfield and urban brownfield values fell on average by 2.4% and 2% respectively in Q3 2023. In prime central London, land prices were flat during the quarter,” writes my colleague Anna Ward. “Average urban brownfield land values across England have now fallen by 20% since the most recent peak of the market in the first quarter of 2022 up to Q3 this year, with greenfield values down 17% during this period. But this quarter we have seen price falls start to moderate in nearly all areas,” adds Anna.

Country houses – prices drop

The value of a home in the countryside is falling at the fastest rate since the global financial crisis, according to the latest instalment of the Knight Frank Prime Country House Index compiled by Chris Druce. In Q3 2023 average prices dropped by just over 2% taking the 12-month slide to over 8%. Despite the slump, values are still 12% higher than they were in June 2020. Chris says there is a bit of stalemate in the market as sellers cling to last year’s prices, while purchasers are angling for big discounts. Read the full report 

Farmland prices – Market at peak?

The latest edition of The Knight Frank Farmland Index has now been published. The average value of bare agricultural land rose by 1% in the third quarter of the year to just shy of £9,000/acre. Annual growth was 8%, which outperformed a number of other asset classes (see chart). Our research suggests values may remain flat into 2024. Read the full report for more insight and analysis.

The Rural Report – Watch the videos!

You've read the book, now watch the videos! To complement the thought-provoking articles contained within this year's edition of The Rural Report our whizzy Marketing team has also created a series of videos featuring many of the report's contributors. Head to our very own YouTube channel to discover more about biodiversity net gain and regenerative farming; find out how we are helping Guy Ritchie's Ashcombe Estate on its diversification journey; and read about the travails of an entrepreneurial Zimbabwean searching for a farm for his family. Plus, lots more.

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