The Rural Report is out now

Opinion

The theme of this year edition of The Rural Report is “Planet” and to celebrate its launch today this instalment of the Rural Update is also chock full of stories about the environment. Many of them chime directly with articles in The Rural Report. For example, we talk about the rising influence of water neutrality conditions for new developments – The Environment Agency has just objected to five housing projects on the basis of water security. I interview a horticultural grower who has spent 20 years trying to rent a farm – At Groundswell, Professor Tim Laing berates the government for not helping the horticulture sector enough. Lord Benyon tells the report the government is committed to its climate change and biodiversity targets – A new report says current agri-environment funding is too low and the Climate Change Committee slams the government for its lacklustre progress towards net zero. These are all big issues that require bold policies. Sadly, we don’t all have the option of the environmentalist Zac Goldsmith who has just resigned in protest at what he claims is Rishi Sunak’s lack of interest in the environment. But at least you can read The Rural Report. Download your copy AS

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 – Barley outlook
• Greenwashing – Increased legal challenges
• Climate-change targets – Government failing
• Politics – Zac Goldsmith resigns
• Renewables – Large Essex solar farm gets the green light
• Eco-funding – Farming needs more cash
• Water shortage – Environment Agency objects to housing
• Out and about – Groundswell highlights
• The Rural Report – Download your copy now
• Scotland – Vague future support details released
• Nature recovery – Strategies’ responsible authorities announced
• Historic opportunity – An archaeologist’s dream
• House prices – Country homes take a dip
• Farmland Index – Prices rise in quarter 1

Commodity markets

Barley outlook

With little movement in our commodity basket, I thought I’d take a look at another crop this week. Barley is always the first crop to be harvested in the UK and with combines set to roll in the next couple of weeks, the AHDB has just released a market update. There is some support for prices in the shape of an estimated drought-driven 5% drop in EU production and a 2% fall in UK planted acres. This could see the margin between wheat and barley prices contract, but spring-planted quality in the UK is also looking poorer than the 2022 crop AS

Talking points

Greenwashing – Increased legal challenges

In our various Knight Frank rural publications, we have often advised landowners and land managers to be careful about who you partner with when entering the natural capital markets. Well, it seems that the number of legal challenges of greenwashing is on the rise, with the Grantham Research Institute on Climate Change predicting an “explosion” of litigation coming. Their latest report on climate change litigation points out that in 2022 there were 26 “climate-washing” cases against companies around the world, up from nine in 2020. Many of these cases are brought forward by NGOs and individuals. While there are moves in the UK to create standards to improve integrity and transparency in the nature-based markets, land-based rural businesses should carefully research the marketplace they are considering joining and preferably seek independent professional advice MT

Climate-change targets – Government failing

The Climate Change Committee’s latest progress report has slammed the government for a lack of urgency in trying to meet its commitments to mitigate climate change. The report will be the last from its current rumbustious Chairman Lord Deben who has been at the helm for the past 10 years. In a final salvo he said: “Even in these times of extraordinary fossil fuel prices, Government has been too slow to embrace cleaner, cheaper alternatives and too keen to support new production of coal, oil and gas. There is a worrying hesitancy by ministers to lead the country to the next stage of net zero commitments.”

Politics – Zac Goldsmith resigns

One of the government’s leading environmental champions has jumped ship after a blame-game bust-up with Prime Minister Rishi Sunak. Formerly a junior Defra minister, Lord Goldsmith was, until his resignation, responsible for Asia, energy, climate and the environment at the Foreign Office. He said he resigned because he was "horrified" at the government abandoning its environmental commitments and withdrawing its leadership on the world stage. However, he had also been openly critical of the recent report into the conduct of Boris Johnson, a personal friend. In a letter to the disgruntled peer Mr Sunak said: "You were asked to apologise for your comments about the Privileges Committee as we felt they were incompatible with your position as a Minister of the Crown. You have decided to take a different course." Ouch AS

Renewables – Large Essex solar farm gets the green light

An application to build a 500-megawatt solar farm near Chelmsford has been given the go-ahead by the Secretary of State for Energy Security and Net-Zero. Once up and running, the solar farm should provide enough renewable energy to power almost 100,000 homes a year. The site, which is a joint project between EDF Renewables and Padero Solar, will also have battery storage. This approval comes as the government is aiming to reach a target of 70 gigawatts of power generated by 2035, enough to power 20 million homes. Currently, electricity from renewables in the UK was just short of 40% of consumption last year, with solar generation seeing a 24% increase MT

Eco-funding – Farming needs more cash

A new report released at the Groundswell show last week by the RSPB, National Trust and Wildlife Trusts says £4.4 billion needs to be spent annually on agri-environmental schemes if the government is to deliver on its environmental pledges. The current total farm support pot is £3.5 billion and that is only guaranteed to the end of this parliament so asking for an extra billion could be wishful thinking.

Water shortage – Environment Agency objects to housing

The Environment Agency has objected to a series of new housing developments for the first time because it is concerned about the supply of water. The five projects in South Cambridgeshire account for almost 4,500 new dwellings. The East of England is the country’s driest region and most of the water supply in South Cambridgeshire comes from a chalk aquifer that environmentalists claim is already under pressure.

Out and about – Groundswell highlights

Mark and I, along with many of our rural colleagues, were enjoying the Groundswell regen vibe last week. There were fascinating seminars galore to learn from, but a lively debate on whether regenerative agriculture should be certified rather like organic farming was my opener. The consensus was that it was too early, but one panellist did worry that with so many food brands like McDonalds using the phrase in their marketing campaigns, there was a risk that farmers could lose control of the narrative. Later, it was also interesting to hear Professor Tim Laing say that the government needs to do much more to support the horticultural sector if it is serious about food security.

At last year’s show I heard the environmentalist George Monbiot talking about his latest book Regenesis and remember thinking that his plan to feed most of the world with cell-cultured foods grown in vats sounded a bit dystopian. It was good then to be at the launch of a new book by Chris Smaje called Saying no to a Farm-Free Future that directly challenges that view. Apparently the two have swapped snarky emails! As for Mark, he was hanging with the politicians AS

Consensus isn’t a word that is often used to describe the views between political parties, but this was refreshingly evident in a discussion I watched on the future of regenerative and nature-positive change. Lord Benyon (Conservative), Daniel Keichner (Labour) and Stuart Roberts (Lib Dems) agreed on the direction that agriculture was taking. Daniel also declared that Labour would back the eagerly awaited National Land use Framework, and Stuart announced that the Lib Dems would put an additional £1 billion a year of funding into agriculture.

The warm-up act to the discussion was Janet Hughes, in charge of delivering ELM schemes at Defra, who was well-received in giving her update on things. She apologised for the change in the structure of ELMs and gave her honest reasons for that. But she warned that there are still a couple of years of changes to come before it settles down MT

Need to know

The Rural Report – Download your copy now

The big news of course this week is that the latest edition of The Rural Report has just been published. This year, Knight Frank’s annual rural flagship has the theme “Planet” and is crammed full of insight, analysis and advice. From land values to biodiversity net gain, we explain the big environmental issues affecting rural landownership. And we don’t just look at the E of ESG, we also investigate social issues. I interview an innovative farmer who has spent two decades trying to rent a farm, while my colleague Alastair Paul says a re-evaluation of the landlord-tenant relationship is urgently needed. We also have contributions from industry big hitters like Defra minister Lord Benyon, environmentalist Ben Goldsmith and Baroness Rock, as well as dropping into filmmaker Guy Ritchie’s Dorset estate.

Download your copy

Scotland – Vague future support details released

The Scottish government has added a sliver more meat to the bone of its future farm support programme.

From 2025 applications will be conditional on the following:

• The maintenance of existing cross compliance requirements as a minimum on future support
• The introduction of new protections for Peatlands and Wetlands as a new condition of basic payments;
• The foundations of a Whole Farm Plan, including soil testing, animal health and welfare declaration, carbon audits, biodiversity audits and supported business planning;
• The introduction of new conditions to the Scottish Suckler Beef Support Scheme linked to calving intervals to encourage livestock keepers to reduce the emissions intensity of their cattle production systems.

Nature recovery – Strategies’ responsible authorities announced

The government has named the responsible authorities for the development of Local Nature Recovery Strategies (LNRS). Natural England will lead Defra groups’ support for LNRS preparation, with senior advisors working in each of the 48 LNRS areas announced last week. Why are LNRSs important? Strategy areas are supposed to bring together communities, businesses, public bodies, farmers, and landowners to influence how the climate and nature crisis is approached in their LNRS area. These strategies could affect how Biodiversity Net Gain, Landscape Recovery Scheme and Species Recovery Programmes are approached in those areas.
The aim is that: “Together the 48 strategies will cover the whole of England and provide the blueprint for the creation of a thriving Nature Recovery Network across the country”, says Natural England MT

On the market

Historic opportunity – An archaeologist’s dream

Lying on a plateau near the River Ure, seven miles north of Ripon, is a site that is known as the ‘Stonehenge of the North’. The three Thornborough Henges are of significant historic significance, and the most northern henge near West Tanfield is up for sale. This is a unique opportunity to be the custodian of a seven-acre Neolithic site covered in mature mixed broadleaf woodland, roadside access and with no public access. Guide price for the freehold is £200,000 MT

See our website or contact Claire Whitfield or Zoe Coulson for more information.

Knight Frank Research

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.

Farmland Index – Prices rise in quarter 1

Agricultural land proved resilient in the first three months of 2023. While residential property values weakened, the average price of bare farmland rose by 2%, edging closer to £9,000/acre, according to the Knight Frank Farmland Index. The hike takes the annual rise to 11%, reinforcing farmland's reputation as a good hedge against inflation. Read the full report for more data and insight

You can also listen to the latest edition of our Intelligence Talks podcast where I discuss biodiversity net gain and nutrient neutrality schemes with my Rural Consultancy colleague Isabel Swift AS