The Rural Update: Focus on food
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
9 minutes to read
Viewpoint
A slip of the tongue or a frustrated admission that Defra is controlled by the Treasury rather than its own ministers?
However you interpret it, the suggestion from Farming Minister Daniel Zeichner at last week’s Norfolk Farming Conference that agriculture is low on the pecking order of the government’s priorities went down like a lead balloon. Prime Minister Keir Starmer was subsequently forced to publicly reiterate his support for the industry.
It’s hard to countenance that food security isn’t a priority for policymakers, but when compared to their appetite for changing planning laws to “build, baby, build”, there seems a marked lack of enthusiasm to encourage farmers to “grow, baby, grow”.
With farmers in revolt over Inheritance Tax, the UK’s glasshouse sector suffering from a lack of investment and innovation, and upland farmers earning less than those on the minimum wage, perhaps Mr Zeichner was just being brutally honest.
Sign up to receive this newsletter and other Knight Frank research directly in your inbox
Commodity markets
Chinese wheat imports down
The US Department of Agriculture’s (USDA) latest World Supply and Demand Estimates report, released last week, failed to rally wheat markets. Despite the report’s predicted increase in global demand this year (+1.83 million tonnes) outstripping a small hike in forecast production (+55,000 tonnes), a sharp drop (-2.5 million tonnes) in the amount of wheat China is expected to import dampened trader sentiment.
US farmers lament aid cuts
Donald Trump’s decision to curtail many of the US Agency for International Development’s (USAID) activities could hit the country’s arable farmers, industry lobby groups have warned. USAID buys millions of tonnes of grain each year from US producers as part of its Food for Peace programme. Sorghum farmers are particularly concerned because of the limited domestic market. Up to 500,000 tonnes of grain destined for humanitarian assistance are already at risk of spoiling, according to a report from USAID’s Office of Inspector General. A bill is currently in committee that would transfer the Food for Peace programme from USAID to the USDA.
The headline
Upland farm income crisis
Farmers in the English uplands are working for significantly less than the national minimum wage, with the disparity set to widen over the next few years, according to new findings from Julia Aglionby of the University of Cumbria.
Rising beef and lamb prices have not been sufficient to offset the accelerated drop in the Basic Payment Scheme and the failure of Defra’s Environmental Land Management schemes (ELMs) to provide adequate support for upland farmers, particularly those grazing on commons, points out Professor Aglionby.
Her current modelling, based on the best available data and subject to change, estimates that average livestock farm incomes, allowing for unpaid family labour, could plummet from a three-year average of almost £31,000 between 2021 and 2024 to below £18,000 for the 27/28 farming year.
For the current financial year, this means farmers are effectively paying themselves £8.33/hour compared to the minimum wage of £11.44/hour. By 27/28, the average hourly rate will be just £7.18, while the minimum wage will have risen to £12.95.
“Upland farmers who relied on government promises to adequately pay them for improving the natural environment and tackling climate change have been short-changed,” says Professor Aglionby, who is also a Commissioner of the Food, Farming & Countryside Commission.
News in brief
Scottish agri-eco support extended
Farmers and crofters in Scotland will be able to continue to access payments to carry out soil analysis, carbon audits, and animal health and welfare interventions for an extra year, the Scottish government has just announced. The Preparing for Sustainable Farming payments were originally due to end next month (March), but activities performed during 2025 will continue to be funded, and claims will be accepted up until the end of February 2026.
NI IHT hit revealed
As an estimated 1,400 tractors converged on the streets of London last week in the latest round of the battle to convince the Labour government to rethink its controversial Inheritance Tax (IHT) changes, modelling from the Northern Irish Rural Valuers Association has revealed that as many as 420 farmers in the province could be hit by IHT every year. When the reforms to the Agricultural Property Relief regime were announced as part of the Autumn Budget, the Treasury claimed only 500 businesses across the whole country would be affected annually.
New town sites submitted
The government has said 100 potential locations where a new generation of new towns could be built have been submitted from across all English regions. The exact locations have not been revealed, but most proposals are to extend existing towns or cities alongside a "smaller number" of new standalone settlements, the government says. Making the announcement, Keir Starmer said construction on a number of the new towns would start before the next general election.
Wolves to cut UK carbon
Establishing a population of just 167 wolves in the Scottish Highlands could help slash carbon emissions, according to a report from researchers at the University of Leeds published yesterday in the Ecological Solutions and Evidence journal. The academics claim that by controlling sapling-hungry red deer populations, the wolves would facilitate enough extra tree growth to account for 5% of the UK’s total woodland carbon removal targets. Based on current carbon prices, this would make each wolf worth over £150,000.
New trees not carbon panacea
Meanwhile, however, new research from the James Hutton Institute has revealed that naturally regenerated woodland on heather moorland ecosystems may not be delivering as much carbon capture as anticipated. The study showed that over 25 years, the same amount of soil carbon was lost as was sequestered by colonising saplings established via seed fall from parent trees.
Solar scheme nature boost
But a study by the RSPB and Cambridge University released last week did contain some good news for advocates of renewable energy. It claimed that the overall population of birds and species numbers were higher on solar farms “managed for nature” than on surrounding arable farmland. Those who worry that more solar farms could be a threat to the UK’s food security will note that the research was conducted on the East Anglian Fens, home to some of the UK’s most productive soils.
Trump farming team in place
The key players set to deliver Donald Trump’s ambitious interlinked food, farming and health policies, which some claim are already being undermined by cuts to regulation and government spending, are now in place after Brooke Rollins’ nomination as Agriculture Secretary was comfortably confirmed last week by the US Senate. Nineteen Democrats voted for her in a rare show of bipartisan support. The President’s controversial Health Secretary nominee Robert F Kennedy Jr was also confirmed, albeit by a much tighter margin after veteran Republican senator Mitch McConnell voted against him. McConnell, a childhood polio victim, was unhappy with Kennedy’s vaccine scepticism.
Glasshouse support lamented
More government support for the protected-cropping sector could deliver a significant boost to the UK’s food self-sufficiency and security by encouraging more investment and innovation. A recent study by the Greenhouse Innovation Consortium revealed that an estimated 70% of the UK’s glasshouses are over 40 years old. The fruit and vegetable sector is the country’s food security weak link, with barely 50% of the vegetables eaten in the UK grown domestically.
Avian flu update
Due to further outbreaks, Defra has extended the avian influenza prevention zone (AIPZ) housing measures to cover Herefordshire, Worcestershire, Cheshire, Merseyside and Lancashire in addition to the East Riding of Yorkshire, City of Kingston Upon Hull, Lincolnshire, Norfolk, Suffolk, Shropshire, York and North Yorkshire.
Win wine with salary survey
The 2025 Knight Frank Estate Staff Salary Survey provides an invaluable benchmark for estate owners on current staff salaries. Please note that the survey is anonymous, but participants can choose to opt in to a prize draw for two cases of Chapel Down English wine. To take part and find out more, please click here.
Property of the week
North Yorks rural business opportunity
Carlshead Farm at Sicklinghall, near Wetherby, offers a wealth of opportunities. As well as 502 acres of Grade 2 and 3 land, the property includes Carlshead Business Centre, which provides a modern workspace in a range of converted traditional farm buildings. Available as a separate lot if required, Carlston Hill Farm includes a three-bedroom farmhouse, an educational facility and a large range of modern and traditional farm buildings that make it an ideal setting for community projects or therapeutic farming. A pair of cottages is also lotted separately. The guide for the whole is £8.3 million. Please contact Claire Whitfield for more details.
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.