The power of influence in UK agriculture

Opinion

It’s hard to get away from so-called influencers these days. Like it or not many of our decisions are probably based around their carefully curated messages on social media, in the press and via advertising, some so subtle we may not even know we are being influenced.

At a personal level many of these decisions don’t have major ramifications, but when it comes to creating government policy who wields the influence can have profound implications for entire industries and society as whole. Our report below on the scrapping of poorly thought-out nutrient neutrality rules (handily badged by the government as a Brexit bonus) shows the power of housebuilders over politicians scrambling for votes in the run up to a general election. In this case environmentalists were on the losing side, but there is growing concern that in certain aspects of policymaking the influence of green lobby groups is taking precedence over science. As discussed below, heather burning and gene-editing in livestock are two such topics. Both are mightily controversial, but both are too important to be driven by emotion alone. 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 inbox.

Andrew Shirley, Head of Rural Research; Mark Topliff, Rural Research Associate.

In this week's update:
• Commodity markets – Beef boost, milling wheat win
• Heather burning – Not all bad, say academics
• International news – Indian vulture catastrophe
• Organics – Soil Association launches fertiliser petition
• Gene editing – Government livestock lethargy lambasted
• Out and about – Sabbatical thoughts
• Nutrient neutrality – Government ditches requirements
• Calf housing – Grant application dates announced
• Commons – Technical issue means paper-based SFI applications
• Peatlands – Funding for restoration
• SFI – Application window delayed
• Australia – Tasmanian coastal opportunity
• Development land – market tumbles
• The Rural Report – Watch the videos
• Country houses – Prices weaken
• Land values – Price growth slows

Commodity markets

Beef boost, milling wheat win

Most of the farm-gate commodities that we track look set to enter autumn on an upwards trajectory with red diesel also heading in the right direction. After a less-than-sizzling summer, the beef market is showing signs of recovery as demand picks up and processors look to secure more animals. Meanwhile, quality concerns following a rain-affected harvest have pushed up the milling wheat premium to almost 70p/tonne over feed. This time last year it was just 43p/tonne. AS

Talking points

Heather burning – Not all bad, say academics

The debate around the burning of heather has become too emotional with evidence around its benefits, such as reducing the risk of wildfires, ignored, according to the latest policy statement from the Future Landscapes Forum, which is made up of scientists and management practitioners.

The statement pulls no punches: “We have growing concerns that the public and policy debate about managing heather moorland is neither properly informed nor evidence based. Indeed, there seems to be a concerted effort to derail an evidence-based approach and sound future policy by certain influential organisations and individuals who ignore or distort evidence, often present unevidenced arguments, or deploy arguments based on selective elements of scientific papers and reports that support their position. Such arguments are often reductive, lack context and are presented wrongly as the scientific consensus.

“We believe that debate and, increasingly, decisions about upland management have become polarised and overly focused on a single issue: driven grouse shooting. Our view is that this focus is wrong and dangerous. Our concerns are not related to habitat management for grouse; indeed, we would be making this position statement if grouse and grouse shooting, did not exist.” AS

International news – Indian vulture catastrophe

The catastrophic impact of DDT sprays on bird populations as highlighted by Rachel Carson’s seminal book Silent Spring is widely acknowledged, but the use of agricultural chemicals is even today killing not just birds, but also ultimately humans. It has been well documented that Diclofenac, a cattle anti-inflammatory, was behind the decimation of India’s vulture population, but a new study I spied in The Economist reveals the knock-on effect on the country’s public health. Despite their gory habits and ugly appearance, the hyper-efficient scavenging habits of India’s vultures performed an important service by mitigating the potential for millions of rotting animal carcasses, often those of sacred cows, to spread diseases and contaminate drinking water. Without the vultures, researchers from Warwick University and the University of Chicago have now estimated that human mortality levels increased by up to 4% in districts once populated by the birds, equating to hundreds of thousands of deaths. It’s a salutary lesson that food chains need to be looked at in their entirety when assessing the impact of agricultural inputs. AS

Organics – Soil Association launches fertiliser petition

Talking of inputs, the Soil Association is calling on the government to set targets for a reduction in the amount of fossil fuel-based fertilisers used by farmers and ramp up support for alternative farming systems. To mark “Organic September” it has set up a petition that it hopes will illustrate the amount of public support for such a move. Without reducing its reliance on artificial fertilisers, the organisation says it will be impossible for the UK to hit its net zero targets. However, with food security high on the political agenda further restrictions on the use of fertilisers would be controversial. Please contact our Agri-Consultancy team if you are interested in reducing your fertiliser usage. AS

Gene editing – Government lambasted

Following the introduction of the Genetic Technology (Precision Breeding) Act earlier this year there has been a robust debate about the threats and opportunities that gene-editing could offer. So far, the debate has largely been around crops, but an opinion piece from a member of the Science for Sustainable Agriculture group that caught my eye ups the ante. Author Dr Craig Lewis criticises the government, which he claims is being erroneously influenced by animal welfare groups, for not doing enough to tap into the potential of gene-editing to help tackle increasingly prevalent epidemics of livestock and poultry diseases like avian influenza and African swine Fever.  As a result, Dr Lewis says ministers are needlessly delaying the implementation of the Precision Breeding Act in Farmed animals, possibly until 2026 or beyond. It’s a really controversial subject, but one that governments need to get their heads around given the economic, social and welfare impacts of such disease outbreaks. AS

Out and about – Sabbatical thoughts

In the last Rural Update I compiled before heading off to Sweden on sabbatical I mused that I’d be spending four weeks in a hammock catching up on my reading list. Sadly, the weather in Scandinavia was no better than in the UK, so there wasn’t much sun lounging. But amidst reading tweets from umpteen climate change sceptics claiming that a rainy summer reliably scotches the concept of man-made climate change, I did find some answers to the question I’d also posed as to why farming is something that is so hard to give up even when everything is stacked against you. Rooted by Sarah Langford was one of the books (a personally signed copy from Groundswell no less) I did manage to read. Aside from explaining how “regenerative farming can save the world” it beautifully, often movingly, but never self-pityingly, tells the story of Sarah’s own journey and that of a series of farmers, explaining their deep connection with the land they farm and how they are triumphing, often against all the odds. It’s well worth a read. AS

Need to know

Hedgerows – Defra consultation closing soon

Defra’s hedgerow consultation will end on 20 September 2023 and is seeking views on the best way to maintain and improve existing protections. Hedgerows are a common landscape feature and an important environmental element for many parts of the country. Defra has been consulting on getting the right level of protection for English hedgerows as cross-compliance is removed. It also contains questions about buffer strips and cutting dates. Apparently, they have had around 2,000 views so far.

Hedgerows are seen as having a plethora of environmental benefits, including being significant carbon sinks. The government aims to create or restore 30,000 miles of hedgerows by 2037 and 45,000 miles of hedgerows by 2050. It would like to return English hedgerow lengths back to 10% above their 1984 peak of 360,000 miles. MT

Nutrient neutrality – Government ditches homebuilding requirements

Last week, minister Michael Gove announced that the government would table an amendment to the Levelling Up and Regeneration Bill that would remove the need for new developments to show nutrient neutrality (NN) in their plans. NN is the concept of offsetting nutrient (phosphate and nitrate) discharges created by new developments to prevent water quality levels from worsening. The government argues that the discharges from housing developments are very small, and the current planning rules are blocking the building of 100,000 homes. The onus will shift to the water companies and agricultural businesses to reduce nutrient levels in particular water catchment areas.

The strategic change means the pressure will ramp up on farming businesses. Farmers and landowners can expect to see more on-farm inspections of facilities and practices. Knight Frank's research estimates that around 8,500 to 9,000 farms are in the nutrient neutrality areas. The announcement has also likely pulled the rug from under the private market and the potential opportunities this brought to those willing to offer land or make changes to their businesses to help offset nutrient discharges from developments.

However, to counter the 'stick', the 'carrot' will come in the form of extra funding for grants to purchase equipment that handles slurry, for example—providing an increased opportunity to introduce new or upgrade existing ageing equipment or facilities. Water quality options will also be added to Defra's Environmental Land Management schemes that will pay farmers and land managers to implement nutrient reduction measures.

Despite this, environmental charities like the RSPB and the CEO of the Office for Environmental Protection have questioned the government’s commitment to reducing water pollution.

If you would like to know more about the announcement, we have a briefing note available by email. Please contact me if you wish to receive a copy. MT

Calf housing – Grant application dates announced

The dates for applying for the Calf Housing for Health and Welfare Grant in England have been announced. The online checker is now available until 22 November 2023, and the full application deadline is 30 April 2025.

A maximum grant of £500,000 as 40% of the total project cost is significant funding to help improve calf welfare, such as social contact and the ambient environment, as part of the government's Farming Transformation Fund. Excitingly, the grant can be used to fund 25% of rooftop solar PV panels and supporting equipment, one of the few grants to help with renewable infrastructure. Another option could include funding an A-frame building to house dairy calves from birth to weaning.

Considerable planning and collection of supporting evidence is needed for the final grant application, so Knight Frank advises that clients start their projects as soon as possible. Henry Clemons, Knight Frank's grant guru and our Agri-consultancy team are well-placed to consult on all aspects of these projects. MT

Commons – Technical issue means paper-based SFI applications

Technical issues mean that English common land farmers will need to submit their Sustainable Farming Incentive applications on paper, reports Farmers Weekly. Apparently, the Rural Payments Agency (RPA) has built a new IT system to process payments, but it currently does not have the functionality to handle common land applications. The RPA says that it won't be incorporated until "early" 2024. In the meantime, the RPA will be posting out maps to applicants later this year and working with them to provide bespoke support.

Defra said: "Commons associations understandably have more complex considerations related to their context." It added: "[The RPA will] process their applications as quickly as possible, just as we have always done with the Countryside Stewardship and other relevant schemes." But commoner associations have expressed their disappointment that common land has been left until last in the roll-out of environmental schemes again, and this will be another barrier to entry. MT

Peatlands – Funding for restoration

The government has pledged £16 million in funding to restore thousands of hectares of peatlands across England. The funding will support 12 large-scale projects, including the Great North Bog in the North of England, Dorset Heaths, the Lincolnshire Fens, and upland peatland in the Forest of Bowland in Cumbria. Peatlands, which cover 10% of the UK's land area, are in a degraded state, with 87% of England's peatlands affected. Peatlands serve as natural carbon sinks and are essential for climate mitigation efforts. This initiative is part of Defra’s plans to restore 35,000 hectares of peatland in England by the end of the current parliamentary term.

Even in their degraded state, these peatlands store more than half of the UK's terrestrial carbon. Furthermore, they provide natural flood defences and water filtration. Restoring these peatlands is crucial for meeting the UK's legally binding climate and nature targets. Environment Minister Rebecca Pow emphasized the urgency of action to prevent further carbon emissions from peatlands. The £16 million funding, part of a larger £50 million commitment, is expected to drive collaboration and accelerate peatland restoration efforts nationwide. Additionally, the government has already confirmed a ban on peat-containing products like bagged compost, set to take effect in 2024. MT

SFI – Application window delayed

Defra has confirmed that farmers can sign up for the Sustainable Farming Incentive (SFI) from 18 September 2023. The SFI window was due to open in August, but the government has delayed it by a month. The SFI pays farmers for taking actions that support food production, farm productivity and resilience, whilst protecting and enhancing environment. There are 23 actions on offer under the 2023 scheme, including on soil health, moorland, hedgerows, integrated pest management, farmland wildlife, buffer strips, and low input grassland.

Meanwhile, the application window for 2024 Countryside Stewardship Mid Tier agreements has been extended until Friday 15 September. Farmers are able to be in SFI and Countryside Stewardship at the same time, as long as the actions are compatible, and they are not being paid for the same action twice. You can read my note on how to make the most of the SFI. MT

On the market

Australia – Tasty Tasmanian coastal opportunity

My Tasmanian colleague Rob Dixon is selling an exciting grazing and agri-tourism opportunity in north-east Tasmania. Musselroe Bay extends to 1,400 hectares including 900 hectares of arable land that has been leased previously for the running of a breeding cattle herd. “This presents the ultimate blank canvas for the purchaser to develop a new paddock plan for the farm and undertake development,” says Rob. The farm has extensive water rights, an all-weather airstrip and planning consent for an 18-hole golf course and accommodation. Contact Rob by September 12th with expressions of interest. Current market reaction suggests a price of around Au$5,000/ha. AS

Our Latest Property Research

Development land – market tumbles 

The outlook for the UK economy weighed on the residential development land market in the second quarter of this year, leading to a slowdown in activity and a decline in land prices across the board, according to the latest instalment of Knight Frank’s Residential Development Land Index.

My research colleague Oliver Knight says: “We’ve noted previously how the economics of developing new homes in England is challenging. A slower sales market, issues related to nutrient neutrality, biodiversity net gain, higher build costs and local plan failures have all forced housebuilders to rein in construction expectations. The result? Downward pressure on land values.”

Average greenfield land prices fell by 6% on the quarter, taking the annual decline to almost 15%. Prices for brownfield land showed a similar trajectory, dropping 6% on a quarterly basis and 18% annually. AS

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. AS

Country houses – Prices weaken

Country house prices came under pressure in the second quarter of the year, as the ‘escape to the country’ trend reset, and buyers re-calculated their budgets due to higher borrowing costs.

The average price of a property fell 2.6% in the second quarter, according to the Knight Frank Prime Country House Index (PCHI), compiled by my colleague Chris Druce. It was the largest quarterly fall since the global financial crisis in Q2 2008. It follows a decline of 0.5% in Q1.

It left country house prices down 4.2% since their peak in June 2022, although the average property is still worth 15% more than before the pandemic, which supported a surge in prices as people upgraded their homes and took advantage of a period of stamp duty savings.

Download the full report or contact Chris for more information. AS

Farmland values – Price growth slows

According to the latest instalment of the Knight Frank Farmland Index, the average value of bare agricultural land in England and Wales rose during the second quarter of the year at the slowest rate since March 2021. Prices increased by just over 1% to £8,845/acre. Annual growth at 8% also slipped into single figures for the first time since the final three months of 2021.

Farmland, however, has outperformed the FTSE 100 equities index, gold, prime central London houses and mainstream house prices over three and 12-month periods. Over five years, only gold has seen stronger capital appreciation.

For more data and insight, please read the full report. AS