The Knight Frank Rural Property and Business Update – 1 February
Our weekly dose of news, views and insight from the world of farming, food and landownership
Farming businesses and estates are crying out for clarity on what the government’s post-Brexit approach to farming will be. The Environment Bill will play a key part in that so its latest delay is regrettable. It’s unlikely, however, that farmers here will vent their anger quite so publicly as the current demonstrations in India over agricultural reform.
Please do get in touch with me or my colleagues mentioned below if you’d like to discuss any of the issues covered. We’d love to hear from you
Andrew Shirley, Head of Rural Research
4 minutes to read
In this week’s update:
- Commodity prices – Lamb prices surge, wheat retreats
- The environment – Government flagship bill delayed
- Moorland – Bog-burning ban introduced
- International news – Indian farmers revolt
Commodity markets – Lamb prices surge, wheat retreats
The lamb market continues to steam ahead with prices breaking new ground every week. Although the AHDB is predicting a 3% drop in demand this year – consumers actually buy more British meat during lockdown – supply is also forecast to fall, which could support values.
Meanwhile, wheat prices are starting to lose some of the ground they have made since the beginning of the year, with speculative buyers selling out. However, forecast strong demand from China, Russian export taxes and dwindling US corn stocks could re-exert some upwards pressure. Brace for market volatility and keep a sharp eye out for selling opportunities.
However, OSR prices continue to rise as concerns mount over the global stock of oilseeds. There is now talk in the US about the forthcoming battle between exporters and crushers, which will be waged over the remaining soybean stocks during the spring and summer periods, says trader Frontier. European demand for rapeseed has also held up during the latest Covid-19 lockdowns, compared with the beginning of the pandemic. Traders are now revising the annual crush volume up to a new total of just over 23 million tonnes.
The environment – Government flagship bill delayed
The government has revealed that the publication of the eagerly awaited, and much delayed, Environment Bill, which, hand-in-hand with the Agriculture Bill, will help define the future direction of food and farming in England, has been postponed for at least another six months due to lack of parliamentary time.
Tom Heathcote, Head of our Agri-Consultancy team, says the delay is deeply frustrating. “It is one of the missing pieces in the jigsaw that a lot of people are waiting for. However, I would really urge farms and estates not use this latest setback as an excuse to delay their own plans to introduce change to their own businesses.”
Mark Bridgeman CLA chairman adds: “News of another delay to the Environment Bill is hugely unhelpful for the rural sector. There is once again significant uncertainty over how and when government’s flagship environmental plans can be delivered – with land managers across the country left in limbo.
“Farmers and landowners want to deliver positive environmental benefits on the land they manage, helping to reverse biodiversity decline and combat climate change. But many are relying on a move to the payments for public goods system, which is linked to key parts of the Environment Bill, including local nature recovery networks.”
Please contact Tom if you would like advice on the future direction of your farming business.
Moorland – Bog-burning ban introduced
The government, as anticipated, has just announced that it plans to ban the burning of heather and other vegetation on protected blanket bog habitats, which it describes as “England’s national rainforests”.
The new regulations will prevent the burning of any specified vegetation on areas of deep peat (over 40cm depth) on a Site of Special Scientific Interest that is also a Special Area of Conservation or a Special Protection Area unless a licence has been granted or the land is steep or rocky.
There will be specific circumstances where the ban does not apply, such as on steep land or where scree makes up half the land area.
In addition, the Secretary of State may also issue licences for the burning of heather on blanket bog for the purposes of wildfire prevention, for a conservation purpose or where land is inaccessible to cutting or mowing machinery.
Environment Secretary George Eustice said: “Our peatlands have great potential as a natural store of carbon, as well as protecting habitats, providing a haven for rare wildlife and being a natural provider of water regulation.
“We want to work with land owners to restore the natural hydrology of many of these sites through our new agricultural policy to support our ambitions for the environment. The burning of heather on these sites makes it more difficult to restore their natural hydrology which is why we are taking this step.”
Read the government’s full statement
International news – Indian farmers revolt
In a major and violent escalation of ongoing protests over new agriculture laws, thousands of Indian farmers broke through police barricades and stormed the historic Red Fort in New Delhi on Tuesday. At least one protester died in the chaos, while the government shut down internet services in parts of the capital.
Farmers and the government are still deadlocked over new laws that liberalise agriculture markets in ways that farmers fear will undercut their livelihoods. The government has offered to suspend implementation for 18 months, but farmers’ unions are pushing for a complete repeal. Given that some 60% of India's population works in agriculture, the standoff has become a major political test for the government of Prime Minister Narendra Modi's ruling BJP party.