Rock Review, Solar stymied, Win wine
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
What a week. Just as I thought quite enough had happened in the past seven days, up pings the news that Prime Minister Liz Truss has ditched her Chancellor Kwasi Kwarteng. Breaking faith with Mr Kwarteng, despite backing him 100% the day before, was just one of a series of government policy U-turns. The biggie was backtracking on the proposed reversal of Richie Sunak’s hike in Corporation Tax, but the ban on no-fault evictions is also back on track, and the current Defra minister is now saying that solar farms will no longer be allowed on Grade 3b farmland, despite his predecessor confirming just weeks ago (in another U-turn) that this wasn’t the case. I’m off for some holiday so who knows what will have happened by the time I get back in a couple of weeks. In the meantime, I recommend you read the Rock Review’s recommendations for improving the tenanted farming sector as it contains some sensible observations for Defra to consider. If you’re a farm or estate owner you might also want to consider taking our new Staff Salary Survey. There’s the chance to win two cases of wine.
Do get in touch if we can help you navigate through these interesting times
Andrew Shirley, Head of Rural Research
In this week’s update:
• Commodity markets – Fuel rise gathers pace
• Agricultural tenancies – Rock Report released
• Residential tenancies – No-fault eviction ban confirmed
• Countryhouse market – Growth set to slow
• Renewable energy – Wot no solar?
• Farm innovation – Defra announces glasshouse cash
• Staff salaries – Take our survey and win wine
• International news – US eating British lamb
Commodity markets – Fuel rise gathers pace
An issue at a French oil refinery has added to the upwards pressure on fuel prices with the cost of red diesel up another 6% last week. The slide in the value of sterling and cut in production by the oil cartel Opec had already pushed prices higher. China’s weaker economic outlook and ongoing Covid-19 lockdowns is helping to mitigate further rises. For further insight on commodity markets in light of the war in Ukraine please check out The Rural Report.
Agricultural tenancies – Rock Report released
Defra has just released the far-reaching findings of the Rock Review, a report it commissioned to look at how “to provide better support to tenant farmers and tenancies as the government seeks to drive growth and sustainability across the farming sector and rural communities”.
Chaired by Baroness Kate Rock, the Tenancy Working Group makes 70 detailed recommendations that include ensuring Defra designs all environmental and productivity schemes to be accessible and open to tenant farmers, starting from the basic principle that tenants should not need landlord consent to enter tenanted land into schemes and landlords should not be allowed to enter tenanted land into schemes unilaterally. Planting trees should be made easier for tenants, while a complete overhaul of tenancy legislation is called for. A review of tax policy to help deliver the above is also critical, the review says.
“The long-awaited Rock Review underlines the importance that the tenanted sector will play in creating a sustainable farming future,” points out Rachel Patch of our Rural Consultancy team. “The key will be intelligent collaboration between landlord and tenant to take advantage of the new environmental income streams at this pivotal time for UK agriculture,” Rachel adds.
Residential tenancies – No-fault eviction ban confirmed
After speculation that the government was considering backtracking on its manifesto commitment to ban no-fault evictions, Liz Truss confirmed in Prime Minister’s Questions that this wasn’t the case and that the legislation would be enacted as part of the Renters Reform Bill due out next year.
Countryhouse market – Growth set to slow
After a buoyant couple of years the UK’ countryhouse market is set to lose some ground, according to the latest research from my research colleague Chris Druce. The value of the Knight Frank Prime Countryhouse Index fell fractionally in the third quarter of the year, although annual growth is still expected to hit a healthy 7%. However, global and domestic economic woes mean prices are forecast to contract by 8% in 2023 and 2024 before bouncing back in 2025.
Renewable energy – Wot no solar?
Prime minister Liz Truss made her opposition to solar farms on agricultural land clear during her leadership campaign. Now it is rumoured that Ranil Jayawardena, her newly appointed Defra minister, is considering effectively blocking the construction of new solar farms by expanding the definition of what is known as “best and most versatile” (BMV) farmland to include land classed as 3b. Planning consent for solar farms is generally not granted on land considered as BMV. I thought it would be interesting to ask our GIS team what this could mean by mapping all areas of England that would fall under the expanded area of BMV land as well as designated areas like AONBs and those at most risk of flooding. As you can see there isn’t much left – about 12% of England. However, my renewable energy colleagues are pretty sceptical that parliament would agree to the change given how badly the UK needs to reduce its reliance on imported fossil fuels. Could a U-turn on a U-turn on U-turn be on its way?
Farm innovation – Defra announces glasshouse cash
Keen to burnish his agri-innovation credentials, Mr Jayawardena has just announced an extra £12.5 million will be available through the Farming Innovation Programme to boost investment in automation and robotics and increase home-grown fruit and vegetable production. Speaking from a glasshouse in the Netherlands, the Defra minister noted that only 25% of the cucumbers consumed in the UK are produced here and just 17% of tomatoes. Higher energy costs, however, mean glasshouse businesses are struggling to stay afloat.
Staff salaries – Take our survey and win wine
In an inflationary world setting the right salaries is crucial to retain and motivate staff. If you are a rural business, taking part in the 2022 instalment of the Knight Frank Estate Staff Salary Survey will not only allow you to benchmark your staff’s wages, but you’ll also have the chance to win two cases of Chapel Down English wine.
International news – US eating British lamb
Americans will tucking into British sheep meat for the first time in over two decades after a consignment of Welsh lamb was dispatched across the Atlantic last week. The Small Ruminant Rule that banned British and EU lamb imports was rescinded by the US Government earlier this year. Trade estimates report that the move could be worth £37 million to the UK livestock sector over the next five years.
Photo by Andreas Gücklhorn on Unsplash