UK rural property: Holding the government to account

Opinion

They say politicians never keep their promises, but last week Prime Minister Rishi Sunak did at least honour his pledge to host a farming summit at 10 Downing Street, albeit under a fair bit of pressure from the NFU. As discussed below, the great and the good from the world of food and farming and, of course, Kaleb from Clarkson’s Farm, listened to Mr Sunak pledge to support the rural economy with an eye-catching list of initiatives. If they are all delivered that would be fantastic, but keeping the pressure on the government once the celebrity photo ops have faded from memory will be crucial. Talking is great, delivery is something else 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 email here

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

In this week's update:

• Commodity markets – Black Sea wheat flows, dairy farmers leave
• Policy – Number 10 holds farm-to-fork summit
• Rural Prosperity Fund – Don’t miss out
• Out and about – Bridging the rural/urban divide
• Out and about – BSI kickstarts nature investment standards project
• Rental reform – No fault evictions banned
• Landscape recovery – Round 2 applications invited
• Water – Innovative new storage project revealed
• Farmland Index – Prices rise in quarter 1
• The Wealth Report – 2023 edition out now
• Farmland Index – Agri-land 2022's top-performing asset
• On the market – Surrey regen farm to rent

Commodity markets

Black Sea wheat flows, dairy farmers leave

Feed wheat prices could come under further pressure after Russia agreed to extend the Black Sea grain corridor for at least another two months to July 18th. Speculation that Russia might not renew the deal, which allows boats access to Ukrainian and Russian ports, had provided some temporary support to a market that has dropped almost £150/tonne over the past 12 months. Since the corridor was agreed in July 2022 around 30 million tonnes of grains and oilseeds have been exported. Meanwhile, 350 British dairy farmers, around 5% of the total, have left the industry since October, according to AHDB. Rising input costs and falling milk prices are to blame, says the organisation. Despite the drop, production remains steady, for now. AS

Talking points

Policy – Number 10 holds farm-to-fork summit

Defra has announced a long list of initiatives to support the food and farming sector. The package of measures coincided with Prime Minister Rishi Sunak’s Farm-to-Fork summit held at 10 Downing Street last week and attended by the movers and shakers from the farming world. At the event Mr Sunak set out six principles that he said would ensure British farming is at the heart of British trade:

1) Putting agriculture up front. Our trade deals will always consider the full impacts and opportunities of those trade agreements for our domestic agricultural sector.

2) Protecting sensitive sectors. We are prepared to do what is right to protect particularly sensitive sectors, including in Free Trade Agreements, and, where appropriate, through permanent quotas.

3) Prioritising new export opportunities. Our trade negotiations will deliver new export opportunities for UK food and drink producers to sell more of our world-class produce around the world.

4) Protecting UK food standards. There will be no chlorine-washed chicken and no hormone-treated beef on the UK market. Not now, not ever.

5) Upholding UK production standards. We will safeguard our ability to maintain high environmental, animal welfare and food standards in new trade agreements.

6) Removing market access barriers. We will ensure UK farmers and producers can access new markets by removing barriers outside of Free Trade Agreements

Some of the specific measures included the provision of 45,000 seasonal worker visas next year, with an additional 10,000 available if needed; a review into the planning barriers that make it difficult for farmers to diversify; £30 million of extra funding for research into crop gene-editing and more cash to promote British food overseas AS

Rural Prosperity Fund – Don’t miss out

Farms and estates hoping to apply for a slice of the government’s £110 million Rural Prosperity Fund should get their skates on. According to one contact who helps choose which projects should receive funding the pot is emptying quickly with most applications coming from charities and small rural businesses rather than the farming sector. Some local authorities have already been accused of trying to spend all their allocated funding on rural infrastructure projects, rather than distributing it to the intended claimants. Please contact our grants specialist Henry Clemons for advice on how to apply AS

Out and about – Bridging the rural/urban divide

CLA London Branch meetings often have fascinating speakers and last week’s, which I attended, was no exception. The journalist and farmer Anna Jones, whose book Divided (soon out in paperback) examines why rural and urban communities don’t seem to understand each other, highlighted the amazing work her charity Just Farmers has been doing to train farmers how to engage with the media and tell their stories in a way that grabs the attention of journalists. In our world of social media echo chambers it is hard to emphasise the importance of being able to steer public debate AS

Out and about – BSI kickstarts nature investment standards project

One of the more interesting announcements from the government’s Nature Markets Framework document back in March, was a collaborative project with the British Standards Institute (BSI). I listened in to a webinar last week hosted by the BSI on what the project will involve in order to create a much-needed standardised process for nature-based markets. This will be a crucial part of the nature markets puzzle so that they operate with high integrity, but also are scalable. We were told that the aims of the project will apply to the whole of the UK, balance rigour with flexibility, no unwarranted complexity and cost, and speed of delivery, although on the latter it might take until March 2026 to have a full set of standards. Many farms and estates will follow this project with much interest given the flurry of new offsetting and carbon credit schemes that are now being touted around MT

Need to know

Rental reform – No fault evictions banned

Section 21 ‘no fault’ evictions will be abolished and landlords will have a more comprehensive possession grounds if the Renters (Reform) Bill passes into law. The government introduced the bill on 17 May 2023 in what is the biggest shake-up to the private rental sector in decades. A major facet of the Bill outlines a move to a simpler tenancy structure based on periodic rather than fixed terms. The new regime would apply to every new tenancy created after a ‘commencement date’. Regulations will set this, and the date for implementation is currently unknown. Landlords could find this creates more uncertainty around how long their tenants will rent their properties, which may cause problems for rural landlords who favour long term occupation. There are protections for the housing of agricultural workers, which was lobbied for by the CAAV and CLA, as notice can be given to existing market tenants if those properties are needed to provide accommodation for agricultural workers.

Jess Waddington of our Rural Consultancy team says: “This bill will affect all rural landlords, but despite the headlines in the press, rural landlords shouldn’t react rashly by considering selling off their rental housing portfolio. The successful implementation of this bill is reliant on transparent, quick and improved court systems so that the amended discretionary repossession grounds can be realised by landlords. With 11 million tenants in England, we could see the court delays having a significant impact. I would advise waiting to see how the bill translates into law before considering how it will impact you specifically” MT

For more advice and for an understanding of how this bill might impact you, please contact Jess Waddington and read our more in-depth article here. 

Landscape recovery – Round 2 applications invited

Following on from the launch of Landscape Recovery Scheme last year, Defra has just announced a second round of the programme that will allow farmers and land managers in England to bid for a share of £15 million that will provide initial development funding for 25 projects of at least 500 hectares.

The projects will be selected based on their environmental and social impact, value for money and suitability for the scheme. In addition, a food production criterion has been introduced that will be used to ensure prospective projects take food production into consideration and mitigate any negative impacts on this where possible.

Henry Clemons, our grants guru, says: “Landscape recovery if managed correctly could be the most exciting programme for a generation, with regards to environmental gain and preservation of diverse habitats for protection of wildlife and species and to create and allow endangered species to re-establish and hopefully flourish. The scheme through encouraging collaboration should improve more diverse landscapes and facilitate more significant habitat creation than any previous scheme.” AS

Water – Innovative new storage project revealed

Farmers could soon be reimbursed for creating water storage ponds or water “batteries” as part of an innovative drought-prevention project that will receive funding from Ofwat’s Innovation Fund. With droughts affecting the UK for much of last summer, the project, from Westcountry Rivers Trust and South West Water, will not only contribute to better hydrated wetlands, woodlands and fields, but can help farms manage water demand through dry weather, as well as boost aquatic biodiversity.

The initiative will work with farmers to create stores of water – both in soil “sponges” as well as lakes and ponds – that can be “re-charged” through wet weather, then drawn on through ever-more common dry seasons, to the benefit of either the farmers themselves, or local communities. These water “batteries” could form the basis of a smart water grid, improving the resilience of the water supply in the wake of climate change – in the same way solar batteries in homes store excess electricity that can be sold back to the National Grid MT

Win wine and beer – Take our Rural Sentiment Survey

If you have five minutes to spare, why not share your opinions about the opportunities and challenges facing your rural business by taking our latest Rural Sentiment Survey. All respondents who complete the survey will have the chance to win a case of Chapel Down English wine and a case of beer from the Gritchie Brewery AS

Take the survey

Knight Frank Research

Farmland Index – Prices rise in quarter 1

Agricultural land proved resilient in the first three months of 2023. While residential property values weakened, the average price of bare farmland rose by 2%, edging closer to £9,000/acre, according to the Knight Frank Farmland Index. The hike takes the annual rise to 11%, reinforcing farmland's reputation as a good hedge against inflation. Read the full report for more data and insight

You can also listen to the latest edition of our Intelligence Talks podcast where I discuss biodiversity net gain and nutrient neutrality schemes with my Rural Consultancy colleague Isabel Swift AS

The Wealth Report – 2023 edition is out now

Knight Frank's leading piece of thought leadership on property and wealth trends was launched recently and includes an interview by me with one of Scotland's pioneering rewilders, as well as some thoughts on why farmland could be one of this year's most in-demand property investments. Download your copy to find out more AS

On the market

Surrey opportunity - Regen farm to rent

Our Horsham office is letting a 126-acre Grade 3 grass farm near Reigate, Surrey. Kinnersley Manor Farm comes with a three-bedroomed house, 30,000 sq ft of buildings, including a milking parlour, and is available to rent on a six-year Farm Business Tenancy. The landlord, Surrey County Council, requires the farm to be managed regeneratively. For more information please contact Isabel Swift AS