The Rural Update: Discussing the future of food and farming
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
8 minutes to read
Viewpoint
Defra was busy last week talking to the country’s largest landowners and biggest food businesses about ways to protect the environment and “restore pride” in British food (see News in Brief). Listening is always good, but much of this work has already been done via the Dasgupta Review and Henry Dimbleby’s National Food Strategy, both government-commissioned. The voices of farmers, smaller estates and food businesses also need to be heard. If asked, they might venture that ramping up inheritance tax on rural businesses and closing environmental grant schemes with no notice, not to mention a planning system that holds back entrepreneurship, might not be the best way to win over the hearts and minds of the countryside.
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Commodity markets
Oil outlook uncertain
Although American airstrikes on Yemen’s Houthi rebels have had a limited impact on oil values, traders are avoiding taking large positions in crude markets due to uncertainty regarding the direction of prices. Factors that could put pressure on prices include increased Russian production if the ceasefire negotiations with Ukraine progress positively and the US lifts some sanctions. But the latest round of US sanctions on Iran could have the opposite effect, as could output cuts by some OPEC+ members.
Milling premium plunge
This time last year, farmers with milling wheat to sell could expect a premium of over £60/tonne above feed wheat. Now they will barely receive £20/tonne more. A poor 2024 harvest meant wheat imports into the UK have risen by 55%, which has put pressure on prices.
The headline
Planning delays revealed
Issues with the planning system are often considered the biggest barrier holding back rural businesses, according to the results of the annual Knight Frank Rural Sentiment Survey.
Now, new research from the CLA reveals the extent of the problem. Using Freedom of Information requests, the lobby group approached 38 councils in England where over half the population lives in rural areas.
The findings from the 35 councils that responded include: Eight councils exceeded the government’s target time to issue decisions in 2023, with delays stretching from weeks to years; fourteen councils are sitting on applications from before 2020, with some dating back to 2007; several councils are approving less than 50% of projects.
News in brief
Landowners tapped for nature boost
Defra is hoping that the combined heft, insight and experience of England’s biggest landowners will help it deliver its ambitious environmental goals and statutory targets. The National Estate for Nature, which held its inaugural meeting last week, is made up of public and private landowners, utilities and NGOs that between them own 10% of England’s land. Minister Steve Reed said: “Landowners must go further and faster to restore our natural world”.
New Western Forest announced
One of the government’s most ambitious targets is to significantly increase the UK’s tree cover. Last week, it announced the location of one of the three new national forests that the Labour Party committed to planting as part of its election manifesto. Stretching from the Cotswolds to the Mendips, the Western Forest will see 20 million trees planted creating at least 2,500 hectares of new woodland.
Carbon credit boost?
Proponents of carbon credits are hoping that the proposed changes to the Science-based Targets initiative (SBTi) will provide a boost to the voluntary credits market, such as the Woodland Carbon Code. SBTi currently requires businesses to neutralise any residual emissions that remain at their targeted net-zero year. This means there is little incentive to buy credits before that date. A new draft, however, encourages businesses to take responsibility for residual emissions along the transition to net zero.
Environmental indicators slide
Less positive are the findings of the latest England Biodiversity Indicators report. Over the short term, 38% of the indicators, which were designed to assess the progress of the delivery of Biodiversity 2020: A strategy for England’s wildlife and ecosystem services, have deteriorated, compared with 21% that have improved. Over the longer term, 32% of the indicators, which track things like the populations of butterflies, bats and birds, as well as the condition of protected areas, have deteriorated.
Food strategy announced
Another talking shop has also just been announced with the formation of the Food Strategy Advisory Board. Chaired by Farming Minister Daniel Zeichner, the board, which comprises members from across the food chain, including just one farmer, will “restore pride in British food by ensuring a food system that backs British food, grows the economy, feeds the nation, nourishes individuals, and protects the planet, now and in the future”.
Badenoch retreats from net zero
Talking of the food chain and environmental targets, there could be less pressure on the farming industry to hit net zero if the Conservatives win the next general election. Party leader Kemi Badenoch has ditched the Tories' commitment to the UK’s current 2050 target for hitting net zero, claiming a more pragmatic approach is required.
Soil plastic pollution
However, one issue that looks unlikely to go away soon is the ongoing pollution of agricultural land with microplastics. A new study from the James Hutton Institute reveals an increase of up to 1,450% in the level of microplastics found within soil samples after just four years of sewage sludge application. The study also found that the number of microplastics – pieces of plastic smaller than 5mm – in the soil remained relatively unchanged 22 years after application.
Pesticide plan
Meanwhile, in terms of pollution, Defra has just released its first significant pesticide initiative in more than a decade. The UK Pesticides National Action Plan sets out how all four UK governments will support farmers, growers, and other land managers to voluntarily increase their use of nature-friendly farming techniques and embrace alternative measures to reduce the potential harm from pesticides by 10% by 2030, while controlling pests and pesticide resistance effectively.
Dartmoor land use
The government has also published the terms of reference for the Dartmoor Land Use Management Group, which has been tasked with reinforcing the National Park’s existing governance by promoting cooperation and collaboration between key stakeholders and government arm’s length bodies with a focus on land management. Farmers say not enough emphasis has been placed on the viability of the upland area’s agricultural businesses.
Farmer fairness bill introduced
In a bid to make life a little easier for farmers, Orkney and Shetland Lib Dem MP Alistair Carmichael, who also chairs the House of Commons Environment, Food and Rural Affairs Committee, launched the Food Supply Chain Fairness Bill last week. The Private Members’ Bill, which has cross-party support and introduces a range of provisions to get fairer prices for farmers and food producers across the UK, will get its second reading on 20 June.
Second-home council tax
Another group of property owners may well be wishing there was an MP to look out for them. As of April, 75% of local authorities will be applying a discretionary 100% premium to council tax bills for second-home owners, according to data compiled by Sky News. The cash generated by the extra tax is intended to help councils address a shortage of housing for local communities.
Property of the week
Organic Sussex sale
This week’s property is brand new to the market and offers a fantastic opportunity for anybody looking for a nature-friendly farming option in the south of England. Tulleys Wells Farm, near Lewes, East Sussex, is a ringfenced 232-acre grassland farm that is home to an organic beef herd and is entered into a mid-tier environmental land management scheme. The seven-bed farmhouse dates back to 1735 and there is a range of livestock and equestrian buildings. For further information and a price guide please contact Will Oakes of our Farms & Estates team.
Discover more of the farms and estates on the market with Knight Frank
Property markets
Development land Q4 2024 – Housing delivery down
Only 2% of the 50 housebuilders recently surveyed by Knight Frank believe that the sector will deliver the 300,000 new homes that the government is targeting for 2025. The gloomy prognosis is contained in the latest instalment of our Residential Development Land Index report, compiled by researcher Anna Ward, which reveals that the price of green and brownfield development land remained flat in the final quarter of the year, despite Labour’s ambitious housebuilding targets and planning reforms. Download the full report for more insight and data.
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.