The Rural Update: Boost farm incomes and biodiversity
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership
6 minutes to read
Viewpoint
It’s time to join the dots. Numbers out this week make it clear how farm incomes in parts of England are perilously reliant on subsidies. A report from Natural England highlights the value of the UK’s natural capital but laments how little notice politicians are taking of its decline.
Meanwhile, the government is trumpeting the £24 billion of so-called green investment it expects its vaunted Investment Summit to yield this week. Sadly, none of this windfall appears destined for the parts of the countryside where it could arguably do the most to help restore nature.
As farmers and landowners brace themselves for a cost-cutting budget later this month, the government should recognise that by creating a coherent’ framework to attract investment into the nature-based solutions that rural landowners are perfectly placed to deliver, it could solve the twin dilemmas of declining biodiversity and farm profitability.
Commodity markets
Geopolitical worries push grains and fuel
The upward shift of wheat and oilseed prices, driven by speculative traders, continues as tension in the Middle East and Black Sea ratchets up. Russian missile strikes on two Ukrainian ports, including Odessa, resulted in damage to grain-carrying vessels last week. Oil prices also nudged up further, but OPEC seems to have lost its battle to cap output with even Saudi Arabia set to pump more crude in the near term.
Regional agri incomes fall
Defra has just published its 2023 total income from farming (TIFF) figures for the English regions. As shown below, they don’t make especially pretty viewing. Incomes fell in all regions, but most significantly in upland areas. The continued reliance on subsidies in the uplands is also a cause for concern as the Basic Payment Scheme (BPS) is set to be cut completely by 2028. Please contact Simon Britton for advice on improving your bottom line.
Policymakers must value nature
A new report from Natural England (NE) says the government and the private sector must put the environment at the heart of decision-making. The State of Natural Capital Report for England 2024 makes the point that the value of the UK’s natural wealth has been conservatively estimated at £1.5 trillion, but policymakers are acting as if they are “oblivious” to the accelerating decline of key ecosystems, says NE’s Chairman Tony Juniper. The report’s recommendations include:
• Applying enhanced nature assessments to policy developments
• Mandating nature-related financial disclosures from large businesses and financiers
• Further action to promote blended private-public finance for ecosystem restoration
• Including natural capital as a measure of national wealth
News in brief
Employment Rights Bill
Rural employers need to be aware of the Employment Rights Bill that was introduced to parliament last week. One of Labour’s flagship policies, the bill states that flexible working should be the norm where practical, puts an end to zero-hours contracts unless employees want to remain on them, offers protection from dismissal from day one of employment and also makes bereavement and parental leave mandatory from day one.
Methane fuel saving
A new study from the University of East Anglia has estimated that methane emissions from the UK’s dairy farms could be five times higher than previously thought. By capturing this methane and turning it into fuel, researchers reckon the dairy sector could save £400 million each year - £52,500 for an average-sized farm. For advice on grants to improve slurry management and storage please contact Henry Clemons.
Biofuel land use
Solar farms are the bête noir of food security campaigners, so it was interesting to read a statistic in the latest edition of Farmers Weekly concerning the amount of land given over to growing crops for bioenergy production. While around 3,500 hectares of land are solely dedicated to solar panels, 133,000 hectares of UK farmland were used to grow crops used to produce energy not food in 2023.
Nature at tipping point
The size of the world’s wildlife populations has plummeted by 73% on average over the past 50 years, according to the WWF’s latest Living Planet Report. In Latin America and the Caribbean, the drop is over 90%. The report says the decline is so serious that some of the world’s most important ecological habitats, such as the Amazon Basin, are on the verge of a tipping point from which it will be impossible to recover.
The Rural Report – Out now
The latest edition of The Rural Report, our flagship publication for farm and estate owners, looks at the numerous opportunities and challenges arising in the countryside following the election of a new government. Find out more or request a copy.
Bluetongue update
You can find the latest updates on the spread of the disease and what measures stock farmers are being advised to take here.
Research
Country houses Q3 – Market waits for budget
Discretionary buyers are holding back from a new country house purchase until they find out what Labour’s first budget at the end of the month holds. Offers from potential buyers were down 10% in the three months to August, according to the latest results from the Knight Frank Prime Country House Index. However, the slide in average values has slowed with prices dropping by just 1.2% in the 12 months to the end of September - the lowest annual fall since Q1 2023 - points out Head of UK Residential Research Tom Bill. He predicts a total average price slide of 2% this year, dependent on the outcome of the budget.
Farmland Q3 – Prices flatline
The farmland market in England and Wales is also on budget alert, judging by the latest results from the Knight Frank Farmland Index. Average values for bare land nudged up by just 0.2% in the third quarter of the year to £9,351/acre. This was the smallest increase for several years. For more insight and data please download the full report.
Development land - Market stays flat
The value of greenfield development sites remained static in the second quarter of the year, according to the latest results of the Knight Frank Residential Development Land Index. Over the past 12 months the index is down 2%. According to Anna Ward, who compiles the index, developers have welcomed Labour’s commitment to reinstate local housing targets and recruit more planning officers. But with interest rates failing to shift and build costs increasing, homebuilders still face significant headwinds, she adds. Download the full report for more insight and data.
Property of the week
Lincs arable unit for sale
This week’s property is a productive 309-acre arable unit at Hardwick, near Lincoln. A significant chunk of the Grade 3 soils at Manor Farm are serviced by underground irrigation offering a range of cropping options including onions, carrots, peas, sugar beet and potatoes. There is a four-bed Victorian farmhouse and a range of buildings including a 1,500-tonne grain store. There are also fishing rights on the Fossdyke Canal. Please contact Georgie Veale for more information.