The Rural Update: Protecting the environment needs farmers
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
10 minutes to read
Viewpoint
The latest downbeat assessment of the government’s progress towards meeting its environmental targets makes for tough reading. Although much of the blame for the lack of momentum rests with the previous government, many of the targets being monitored are legally binding, so it’s down to Defra’s Steve Reed and his ministerial colleagues in other departments to get things back on track.
That won’t necessarily be easy with departmental budgets set to be cut in the imminent spending review and the government pursuing a growth agenda. Building 1.5 million new houses and installing swathes of new energy infrastructure, for example, bring numerous environmental concerns.
Another potential issue is that one of the report’s key recommendations is for “more government engagement with farmers and landowners.” Given that the government remains unwilling to listen to farmers’ concerns about the changes to Inheritance Tax reliefs, that engagement might be hard to come by.
Commodity markets
OSR hike may not last
Oilseed Rape is trading at the strongest levels seen for a while, but this may not be sustainable, according to trader Frontier. The firm’s latest update said: “European crop conditions for the upcoming harvest are generally positive, and the combined crop from the EU and UK for the 2025 harvest is expected to exceed 19 million tonnes if current conditions hold. Commercial funds have also recently been active in the soybean market on the buying side, which can cause sharp short-term price fluctuations.”
Oil markets await Trump effect
Crude oil markets, which had been on the rise following Joe Biden’s further sanctions on Russian oil, remained flat in the run-up to Donald Trump’s inauguration yesterday. Traders are waiting to see if the new President signs any executive orders that could have an impact on global markets. There is speculation that he could lift sanctions on Russian oil in exchange for Vladimir Putin agreeing quickly to a ceasefire with Ukraine. Brokering a Black Sea ceasefire in double-quick time was one of Trump’s pre-election pledges.
Milk stronger than expected
As reported in Farmers Weekly, the outlook for milk prices looks better than at the end of 2024 when wholesale prices had started to slip, according to speakers at the recent Semex dairy conference. Michael Masters of cheesemaker Barbers said cheese markets were stronger than futures markets might suggest, while sector analyst Chris Walkland predicted average milk prices for the first half of 2025 should exceed 40p/litre.
The headline
Government set to miss environmental targets
The Labour government has a lot to do if it wants to meet the country’s environmental targets, according to a new report from the Office for Environmental Protection (OEP). The report, published last week, provides an assessment of progress towards legally binding commitments, including those in the statutory Environmental Improvement Plan.
The OEP concludes that while there have been some areas of improvement, very substantial challenges remain with less progress being made overall compared to the previous 12 months. It says the government is still largely off track to achieve obligations endorsed by Parliament to significantly improve the natural environment and warns that unless things change materially, key targets, such as the 30 by 30 target for land and sea, will not be met.
“Although there are signs that the downward trend in species abundance is slowing, wider biodiversity trends continue to get worse as does the marine environment,” states the report.
One of the report’s eight key recommendations for action is to get nature-friendly farming right, with greater government engagement with farmers and landowners being key to improving the environment at scale.
Although the OEP’s report covers the period 1 April 2023 to 31 March 2024, before Labour came to power, it warns that the current administration should not neglect the environment in pursuit of economic growth.
News in brief
Baroness batters IHT reforms
Minette Batters, the previous President of the NFU, used her maiden speech in the House of Lords to highlight the government’s lack of industry consultation regarding its recent and highly controversial changes to the Agricultural and Business Property Relief regimes. From 2026, farmers could be forced to pay 20% Inheritance Tax on the value of their businesses. Baroness Batters said: “The line given by officials is that the UK is a wealthy nation and can afford to import its food. The increases in farm taxes proposed in the Budget are a symptom of this all too often desk-based advice to ministers. On this issue, I urge the government to listen to my successor, Tom Bradshaw, to pause and to consult with the industry.”
IHT reform slammed by retailers and councils
Meanwhile, criticism of the government’s Inheritance Tax changes has widened. Several supermarkets, including Asda and Morrisons, no doubt keen to avoid farmer blockades of their stores, have lent their voices to the campaign urging the government to rethink its Inheritance Tax reforms. At least 30 councils across the country, some in constituencies with new Labour MPs, have also officially attacked the changes.
Beavers blocked?
The government has denied media reports that it is blocking plans to legalise the release of beavers in England. The Guardian claims that Number 10 scotched the programme, which Natural England spent years creating, despite it already being approved by Defra Minister Steve Reed, because officials view it as a “Tory legacy”. However, writing on LinkedIn, John Varley, Chief Executive of the Clinton Devon Estates, said it was too late as so many beavers were already breeding in the wild. “If the policy is now not to release into the wild will someone from Defra get in touch to arrange to collect ours please before they colonise further parts of rural England.”
Defra fights fishermen
Despite its apparent unwillingness to continue with the previous government’s beaver release plans, Defra Minister Steve Reed has decided to continue to appeal a landmark pollution case, which was brought against the government in 2023 by a group of Yorkshire anglers. Fish Legal, acting on behalf of the Pickering Fishery Association, challenged the government on the River Basin Management Plan for the Humber district. The courts ruled that the government and Environment Agency (EA) had failed in their legal duties. The appeal was held last week. The government claimed it was unrealistic for it to have detailed plans for cleaning up every stretch of river in the country. A ruling could take several months.
Glyphosate resistance worries
The first case of glyphosate resistance has been detected in the UK. Italian ryegrass on a farm in Kent was shown by researchers at ADAS to have survived an application of the commonly used weedkilling chemical. Although some environmentalists, who have long campaigned against the use of the herbicide, may welcome the news, glyphosate application is often a key part of low or no-tillage regenerative farming strategies. Controlling blackgrass, especially on heavier soils, can be particularly difficult without its use. Experts are calling for farmers to diversify their weed control strategies.
Gun licence hike
Several weeks ago, we revealed that the government was planning significant hikes to the cost of gun licencing in a bid to cover the full cost of the licencing regime for local police forces. The costs have now been released. A shotgun certificate will cost £194 (+144%), while renewing a shotgun certificate will set you back £126 (+157%). The changes take effect from 5 February. The National Police Chiefs’ Council advises that most forces accept renewals up to four months before the expiry date.
Mixed milk messages
A glass of milk a day can help ward off bowel cancer, according to research conducted by Oxford University and funded by Cancer Research UK. The study of 500,000 women, one of the biggest ever, showed that an extra 300mg of calcium can cut the risk of developing bowel cancer by 17%. Meanwhile, Gloucester County Council has angered local dairy farmers by urging its residents to switch from milk to non-dairy alternatives derived from oats or almonds. The call is part of the council’s Swaps in Seconds campaign, which is aimed at helping people reduce their personal carbon footprints. A group of environmentalists, including Chris Packham, has also called on the government to stop the AHDB’s Let’s Eat Balanced campaign, which promotes the healthy consumption of meat and dairy products.
FMD German meat ban
Following last week’s news that Foot and Mouth disease (FMD) had broken out in Germany, the UK government has banned the commercial import of cattle, pigs, sheep, deer, buffaloes and their products such as meat and dairy from the country. Personal imports of unpackaged meat, meat products, milk and dairy products, certain composite products and animal by-products of pigs from the EU, EFTA states, Faroe Islands and Greenland, plus packaged products from Germany are also banned. However, the Association of Independent Meat Suppliers has called for a ban on all personal imports.
Oxygen KF podcast now available
The full Shoot Room Sessions podcast discussion between Rich Stockdale, founder of Oxygen Conservation, and Knight Frank’s Head of Rural Consultancy, James Farrell, is now available to watch. In episode 90 of the Sessions, now sponsored by Knight Frank, James offers his insights on transitioning traditional farming practices, the importance of functional markets and fair compensation for environmental stewardship. He also reflects on his passion for collaboration, team culture, and innovation.
Property of the week
Nature-based income opportunity
Investors, conservation groups or private individuals searching for a sizeable block of land delivering a healthy income from nature-based solutions will want to look at Far Ralia in Scotland’s Cairngorms National Park. The guide price is £12m.
The 3,668-acre property offers one of the largest quantified carbon sequestration opportunities in the UK, with a tree-planting programme opportunity of close to 1.5 million trees. There is also a significant area of peatland offering further opportunities. Please contact Georgie Veal for more information.
Property markets
Country houses Q4 2024 – Market weakens
The price of houses in rural areas slipped by 0.3% in the final quarter of 2024, according to the latest results from the Knight Frank Prime Country House Index. Overall, values fell by 0.9% during the year. Demand for homes in the countryside has continued to fall since the Covid-19 pandemic, points out Head of UK Residential Research Tom Bill. Exchanges in 2024 were down 20% on the five-year average, he says. However, prices are expected to rebound by almost 18% over the next five years, Tom predicts.
Farmland Q4 2024 – Prices resilient
The farmland market edged up slightly during 2024, according to the latest results from the Knight Frank Farmland Index, which tracks the value of bare agricultural land in England and Wales. Average values started the year at £9,152/acre and, heading into 2025, stood at £9,164/acre, a slight rise of 0.1%. Given the challenges that the farming industry has faced over the past 12 months, this shows the inherent resilience of agricultural land as a multi-functional asset class. Prices, however, did dip in Q4 after Inheritance Tax reforms on farmland were announced as part of the Autumn Budget. For more insight and data please download the full report.
Development land Q3 – Greenfield sites up
The average value of greenfield land values in England rose 3% in the third quarter of 2024, according to the latest instalment of our Residential Development Land Index. However, brownfield and prime central London prices stayed flat due to thin activity, with some market participants taking a “wait-and-see” approach ahead of the Budget, says the report’s author, Anna Ward. Housebuilders are also sceptical that it will be possible to deliver the 1.5 million new homes pledged by Labour over the next five years. Download the full report for more insight and data.