Scottish farming, Beavers, Natural capital
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
6 minutes to read
This week’s update feels a bit like a chronical of plagues – from Avian flu, to biblical-level flooding in Pakistan to spiralling gas prices (and I didn’t even touch on the foot-and-mouth outbreak in Indonesia that is sending shivers of fear down the backs of Australian livestock producers). All to some extent are manmade and all will have economic consequences that will be virtually impossible to quantify. It’s interesting, therefore, that the wonks at the ONS are beavering away at new methodologies to more accurately calculate not just the value of natural capital, but also quantify the contribution of those who have managed to degrade it. It could be a wake up call for polluters. Farmers just need to make sure they are on the right side of the accounts.
Do get in touch if we can help in any way
Andrew Shirley, Head of Rural Research
In this week’s update:
• Commodity markets – Fertiliser and CO2 fears
• Scotland – Future farming strategy released
• Natural capital – Accounting gaps to be filled
• Farm labour – Defra study quantifies shortfall
• Sustainable Farming Incentive – New application details
• Beavers – Management guidance released
• Avian flu – Advice for farmers and landowners
• Overseas news – Food security in focus
Commodity markets – Fertiliser and CO2 fears
Access to fertiliser for next season’s crops as well as the availability of CO2 for the meat processing sector is a growing concern following the announcement that UK manufacturer CF Fertilisers will no longer be producing its own ammonia, of which CO2 is a by-product, at its plant in Billingham. Because of spiralling gas costs, the firm, which accounts for 40% of UK CO2 production, says it will import the ammonia needed to make fertiliser.
CO2 is used to stun animals pre-slaughter and also in packaging and greenhouses. Ammonium nitrate prices, which have already surged to over £800/t, would need to double based on the current gas prices that have forced manufacturers across Europe to halt or reduce production.
Scotland – Future farming consultation released
The Scottish government is asking for opinions on its new post-Brexit farming roadmap. Responses to the consultation, published last week, will help shape the country’s Agriculture Bill that is due out in 2023.
Unlike England’s new farming strategy, Scotland’s blueprint has been created, perhaps with a post-independence dream of re-joining the EU in mind, to broadly mirror the ongoing evolution of Europe’s Common Agricultural Policy.
This means that direct area-based payments payable to all active farmers will still remain part of the proposed four-tiered support mix, even though using the food and farming sector to help hit Scotland’s 2045 net zero target is a key driver of the strategy.
From a landlord’s perspectives some of the most interesting parts of the consultation revolve around proposed changes to tenancy legislation. These include giving ministers the power to amend the list of diversified activities tenants are allowed to conduct, adding new tenants improvements that should be taken into account at end-of-tenancy (waygo) discussions and introducing a new formula for rent reviews.
Although, as pointed out by many industry stakeholders, there is a distinct lack of the kind of details that farmers crave, the sweep of the proposals are very broad including even a consideration of agricultural wages.
The consultation is open until 21 November
Natural capital – Accounting gaps to be filled
Natural capital is the buzzword of the moment, from its increasing influence over government targets and policies to corporate ESG and CSR agendas, not to mention as the basis for a growing number of investment funds. The slight issue is that it’s quite hard to quantify, particularly at a local level, which makes it difficult to assess the impact, either positive or negative, of specific actions. To help remedy this, the ONS has just announced its roadmap for delivering more granular natural capital accounting. By 2025, for example, the number crunchers there hope to be able to produce first estimates of the costs of water pollution linked to the economic sectors producing them. While this may seem one for the wonks among us, it is clear that a greater ability to measure natural capital will provide a greater justification to make somebody pay for any declines.
Hopefully, it will also mean a greater incentive to reward landowners who can create more of it.
Farm labour – Defra study quantifies seasonal shortfall
The government’s latest Labour in Horticulture report reveals that 45% of businesses requiring seasonal labour reported a shortfall in the second quarter of the year. The study, established in 2018 to track the impact of Brexit on seasonal labour supplies, identified an average deficit of 114 “person days” compared with 84 during the same period in 2018.
Sustainable Farming Incentive – New application details
Defra has just published updated guidance for the Sustainable Farming Incentive. Farmers who have land in a Countryside Stewardship and Environmental Stewardship agreement, but not on common land, can now apply to join the SFI online directly by signing into the Rural Payments service, rather than by invitation. If you have an queries about what grant schemes would work for you please get in touch as we have a new expert joining our team this week.
Beavers – Management guidance released
Following the announcement last month that it will be illegal to kill, injure, sell or transport beavers, or damage their homes from 1 October, the government has just released new management guidance for landowners hosting the dam-building rodents on their farms or estates. Certain management activities will be possible without a licence, but some can only be carried out with a licence. Those convicted of unlicenced activities could receive a six-month prison sentence or an unlimited fine. However, you do not need a licence to modify or remove a dam if it’s less than two weeks old or to modify or remove a day rest.
Avian flu – Advice for farmers and landowners
Defra and the Welsh Government have just released practical guidance to support land managers, the public and ornithological and environmental organisations in their response to the growing threat of avian influenza to wild birds. The ‘Mitigation Strategy for Avian Influenza in Wild Birds in England and Wales’ includes advice for land managers on how to make natural areas safe for the public, for example by adding signage warning visitors of the risk of avian influenza and what they can do to protect themselves, as well as having contingency plans in place to allow them to quickly respond to outbreaks.
Overseas news – Food security in focus
A couple of newspaper articles from either side of the political spectrum relating to food security caught my eye this week. One was in the Republican-leaning Washington Examiner lauding California’s move to ban foreign ownership (for that read Chinese) of the state’s farmland from the beginning of 2023. The other was an opinion piece in The Guardian lamenting the lack of global action on climate change that it says was behind the catastrophic floods that are decimating some of Pakistan’s most productive farmland and displacing millions of people. It’s a vicious circle. Climate change will see more richer nations looking to “off-shore” their food security, and more countries subsequently looking to restrict ownership. Meanwhile, without concerted action, the world’s poorest will continue to suffer the most.
Photo by Piotr Musioł on Unsplash