Free trade deals, free Brexit advice, saving the Barrier Reef

The COP26 talks are now underway in Glasgow and despite agriculture being given no specific voice at the climate change conference you can be sure farming will come in for plenty of stick for its contribution to greenhouse gas emissions. Farmers will rightly be asked to play their role in mitigating climate change, but that request needs to be set against two considerations. Firstly that the data used to quantify the scale of the issue is accurate and takes into account the carbon sequestration delivered by farming, not just the outputs. And second that in having risen to the challenge, the UK’s farmers are not then penalised by having to compete with cheaper overseas imports produced to lower standards. As I note below, the formation of a new trade commission came too late to scrutinise a major free-trade deal with New Zealand, but it needs to have sufficient teeth to deal with future agreements, including potentially one with the US.

Do get in touch if we can help in any way
Andrew Shirley, Head of Rural Research

In this week’s update:

• Commodity markets – Rocketing input costs take shine off arable boom
• Politics – Rural budget blues
• Trade deals 1 – New commission to monitor free trade deals
• Trade deals 2 – New Zealand free trade deal vexes farmers
• Post-Brexit agriculture – Free strategic advice for farms and estates
• Residential property – Country houses market on a roll
• The Rural Report – Sign up to watch our ground-breaking video
• Overseas news – Credits scheme pays farmers to save Barrier Reef

Commodity markets – Rocketing input costs take shine off arable boom

After a sudden drop in the summer feed wheat values are back over £200/tonne while the oilseed rape market heads higher and higher. Good news for those with crops to sell now, but the parallel rise of input prices will take the shine off the bottom line and has worrying implications for next year’s harvest. According to the latest Aginflation Index produced by buying group Anglia Farmers the value of a basket of inputs rose 22% over the 12 months to the end of Q3. Fuel was up almost 80% and fertiliser by over 50%. Looking forward, oilseed rape prices on the Paris futures market are £108/tonne lower for November 2022.

Politics – Rural budget blues

Rishi Sunak’s budget last week was labelled a missed opportunity by rural organisations such as the CLA and Tenant Farmers’ Association after the Chancellor failed to introduce any measures that would help level up the rural economy, ease the countryside’s affordable housing crisis or revitalise the tenanted farming sector.

Rural businesses, however, will benefit from some of Mr Sunak’s much-touted munificence, which included freezing fuel duty, a one-year 50% business rates discount for retail, leisure and hospitality businesses, and business rates exemptions and reliefs in England for eligible green technologies that help to decarbonise non-domestic buildings.

An increase of £625 million for the Nature for Climate Fund was also confirmed, as was an extension of the upgraded £1 million annual investment allowance until March 2023. It had been due to fall back to its previous level of £200,000 from January 2022.

Read our full budget coverage

Trade deals 1 – New commission to monitor free trade deals

The government has responded to calls for more oversight of free trade deals that could affect UK farming businesses by setting up a permanent Trade and Agriculture Commission (TAC).

TAC’s advice will inform a government report that will be laid before parliament ahead of the ratification of any new free trade agreement and following the signature stage.

Photo by Martin Bisof on Unsplash

Trade deals 2 – New Zealand free trade deal vexes farmers

But the formation of TAC comes just too late to scrutinise a new free trade deal that has just been agreed with New Zealand. Farming organisations across the UK have slammed the deal that will allow in significantly higher levels of tariff-free Kiwi lamb and beef imports – not necessarily produced to the standards demanded of farmers here - over the next 15 years, before tariffs are scrapped altogether.

Post-Brexit agriculture – Free strategic advice for farms and estates

My colleagues in our Agri-Consultancy team are now able to provide you with advice fully funded by Defra’s Future Farming resilience Fund to help your business cope with the post-Brexit transition away from area-based support.

Harry Huddart, one of our agricultural consultants, explains: “DEFRA’s Farm Business Review Service is a great way for farmers to access free advice and support to start their journey through the agricultural transition period. By looking at how the business will be impacted by the removal of BPS and benchmarking farms performance we can help towards making the farm business more resilient for the future.”

Please email the team to find out more about accessing the free advice.

Residential property – Country houses market on a roll

According to the latest instalment of our Country house Index, compiled by my colleague Chris Druce, the price of rural des res’s is growing at the fastest pace in seven years. In the three months to September average price growth was 2.1%, which pushed the annual rate of growth to almost 11% - the highest level since the first quarter of 2007.

The Rural Report – Sign up to watch our ground-breaking video

This year’s edition of The Rural Report, our unique publication for rural landowners and their advisors, launched last month with a video highlighting some of its key content around the topic of ESG. If you missed it, you can sign up to watch on demand at your leisure. It was a lot of fun making it and includes a thought provoking interview on diversity, with Wilfred Emmanuel-Jones AKA The Black Farmer. I think you’ll find it both entertaining and informative.

Sign up to watch The Rural Report launch video

Overseas news – Credits scheme pays farmers to save Barrier Reef

The purchase of 18,000 reef credits by the Queensland government has given a big boost in confidence to the Reef Credit Scheme, which aims to reduce the amount of water pollution from farming business. Water pollution is the second biggest threat to the iconic Barrier Reef after climate change. Farmers are awarded credits for cutting the amount of nitrogen runoff produced by their businesses. Each credit was reportedly worth around A$45 (£25).

Photo by Giorgia Doglioni on Unsplash