Welsh support, Farmland rise, China land grab
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
3 minutes to read
Andrew Shirley, Head of Rural Research
It’s difficult to applaud a farm support scheme when we don’t even know how much it is going to pay, but at first glance the Welsh Government’s Sustainable Farming Scheme proposals look a little bit more farmer-friendly than some had feared. Unlike Defra’s offering to England’s farmers, the Welsh government is prepared to commit support to the sector beyond the current parliamentary term. Whether this will encourage heads to be buried in the sand for longer is debatable, but given that many Welsh producers are nowhere near profitable without support payments it seems a sensible policy.
In this week’s update:
• Commodity markets – Prices fall as combines roll
• Farm support – Wales reveals post-Brexit policy
• The Rural Report 2022 – Watch this year’s launch webinar
• Farmland values – Prices rise further
• Overseas news – US vexed over China farm purchase
Commodity markets – Prices fall as combines roll
With the first combines of harvest 2022 already rolling in parts of the UK, oilseed and cereal prices continue to fall, shedding much of the gains made since Russia’s invasion of Ukraine earlier this year sent markets skyward. Prices still remain comfortably above year-ago levels, but some arable farmers will nonetheless be wishing they’d sold a few more tonnes of their crops forward. Others may well be thinking that the optimism regarding the reopening of Ukraine’s Black Sea ports is misplaced and another spike is around the corner for those with the storage capacity to wait and see.
Farm support – Wales reveals post-Brexit policy
The Welsh government has at last revealed initial details of its post-Brexit plans for replacing the EU’s Common Agricultural Policy system of farm support payments.
No payment rates have been provided yet for the country’s Sustainable Farming Scheme (SFS), but it will be split into three tiers: Universal, Optional and Collaborative. All claimants will need to deliver the Universal requirements, which include ensuring 10% of their land has tree cover and not leaving land bare during the winter.
The Optional level will provide top-up payments for those wanting to undertake further environmental enhancements, while the Collaborative tier, as its name suggests, is for larger-scale projects across multiple land holdings.
Concerns over the ability of some farms to deliver all of the Universal requirements have been raised, but farmers have welcomed the commitment from the Welsh government to introduce a transition period whereby stability payments will continue to be a feature of SFS throughout and beyond the current Senedd term.
More details will be announced in 2023 after a period of industry consultation and economic modelling.
For advice on Welsh landownership issues please contact Edward Holloway.
The Rural Report 2022 – Watch this year’s launch webinar
The launch webinar for this year’s edition of The Rural Report is now available to watch on demand. Please head to the report’s dedicated website where you can also request a copy of the report. Highlights include an interview with Jake Fiennes whose new book Land Healer has just been published.
Farmland values – Prices rise further (if you could get a chart of Annabelle to include here that would be cool)
An ongoing lack of supply and continued strong demand has pushed the average value of agricultural land in the UK back over £8,000/acre for the first time since 2015, according to the Q2 instalment of the Knight Frank Farmland Index. For more insight and analysis please download the full report.
Overseas news – US vexed over China farm purchase
About 35 million acres of US farmland are owned by overseas entities, according to the USDA. Of these, about 75% are in the hands of Canadian and European businesses, but Congress is most concerned about the 200,000 acres, around 0.05% of foreign-owned land, controlled by Chinese businesses. The latest purchase to raise hackles is a 300-acre farm in North Dakota, 12 miles from an airbase, bought by Chinese food manufacturer Fufeng Group. However, advocacy groups like the National Family Farm Coalition argue that the larger threat to national security is actually corporate capture of US land resources, whether those corporations are US or foreign-owned.
Photo by Joseph Reeder on Unsplash