The Rural Update: Boosting soil and climate resilience
Your weekly dose of news, views and insight from Knight Frank on the world of farming, food and landownership.
9 minutes to read
Viewpoint
Our Rural Consultancy team was out in force at last week’s Groundswell event, which has gone from strength to strength since it was first held in 2016. Often blessed by sunny weather and playing host to some of agriculture’s most passionate and inspirational champions, who this year included Dakota rancher Gabe Brown and the Prince of Wales, it can be hard not to get swept away by the collective enthusiasm for the resurgence of regenerative agriculture. It is certainly true that looking after your soils is the key to long-term resilience for most farming businesses, especially given the increasing frequency of drought or floods. Unlike the organic sector, though, it’s worth noting that there are few premium prices currently available for regeneratively farmed products and, as the figures from farm business consultant Andersons revealed at the show illustrate, regen producers are far from immune to drops in farm support payments and commodity prices.
Mark Topliff, who was one of our team who attended the event, notes: “If Groundswell reaffirms anything, it’s that there is a hardcore of land managers who believe regen agriculture is the only way forward for the industry. But many remain sceptical. However, there is no doubt that elements of regen agriculture are applicable to any farming business, whether that is adding organic matter to arable soils or changing grazing practices. For farming to be more sustainable long term, it will need some of these approaches to be widely adopted.”
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Commodity markets
Milk firm
Farmgate milk prices seem to be holding firm, despite a sharp hike in production. Average daily output levels hit almost 37 million litres towards the end of June, a year-on-year jump of close to 7%, according to the latest AHDB figures. Most milk buyers, however, have maintained their July milk price at current levels. A new report from Rabobank suggests global dairy markets could come under pressure in the second half of the year, but low production in mainland Europe could insulate UK producers somewhat.
The headline
Royal regen approval
The Prince of Wales made a surprise speech at last week’s Groundswell event, arguably the world’s premier regenerative farming show.
Prince William, who introduced US rancher Gabe Brown, considered by many to be the godfather of the modern regenerative movement, said: “Let this festival be not just a celebration of innovation but a rallying call, for regenerative farming is not a fringe alternative. It must be a foundation stone for British agriculture to help us rebuild the health of our nation.”
Also attending the show, Defra Minister Steve Reed, expressed his support for regenerative agriculture, but controversially told journalists that some of the UK’s less productive farms, which are most reliant on support payments, should be taken out of agricultural production completely.
As reported in The Guardian, Mr Reed said the government’s proposed land use framework “envisions taking some of the least productive land out of food production, but supporting the more productive land to increase production”.
Regen profit pinch
New figures released by farm business consultant Andersons at Groundswell reveal that a lack of price support for regeneratively farmed products means the sector is still vulnerable to swings in commodity prices and cuts in government support payments.
The margin from farming activities this year on the firm’s 600-hectare model regenerative farm is predicted to fall into the red by £95/ha. What’s left of the Basic Payment Scheme (BPS) and Sustainable Farming Incentive will help ensure a total business surplus of £56/ha. For 2026, the firm forecasts a farming margin of £9/ha and business surplus of £149/ha.
However, over the longer term, consultant Amelia Rome said that using regenerative farming practices would make soils more resilient to increasingly volatile weather conditions. But there is still likely to be further industry consolidation, warned her colleague Sebastian Graff-Baker.
News in brief
Capital grants rekindled
Given the above, it’s welcome news that Defra’s Capital Grants offer, which was suspended earlier this year, has just reopened with £150 million of funding up for grabs. Grants are available for 78 items under six categories: air quality; water quality; natural flood management (capped at £25,000 each); boundaries, trees and orchards (capped at £35,000); assessments; and improvements. Four new items are available under this round of the offer: assess woodland, create a wildfire checklist, repair stone walls, and host educational access visits. For help with grant applications please contact Mark Topliff.
SFI applications reopen
Applications for the 2024 round of the Sustainable Farming Incentive (SFI), which was also controversially closed in March, reopened yesterday (7 July). However, applications are largely limited to those farmers who were in the process of making an application when the scheme was shuttered with no warning.
Last chance for tech grants
Anybody thinking of applying to the Farming Equipment and Technology Fund has until midday on 10 July to submit their applications. Grants of up to £25,000 are available for each of three themes: productivity, slurry management, and animal health and welfare. The grants cover 40% to 50% of the cost of eligible items, which include direct drills and cattle crushes.
Climate costs
The results of a survey of 300 farmers across the UK, conducted by the Climate Intelligence Unit, reveal the scale of the climate issues the farming industry is facing. Almost 90% of producers have seen their productivity hit by extreme weather conditions in recent years. Almost 85% recorded a drop in arable or livestock yields, with 75% saying this had reduced their incomes. Meanwhile, a new report from the United Nations highlights the global impact of drought. In Spain, water availability dropped by 12% between 1980 and 2023, while 90% of the land in Turkey is at risk of desertification.
Farmer optimism slumps
Climate-related problems might help explain why only 13% of farmers feel optimistic about agriculture’s future, according to the results of law firm Tees’ inaugural Annual Farming Survey. However, it’s not just the weather - 80% of the respondents say their businesses will be affected by the government’s inheritance tax reforms, while 84% claim that current compliance issues make running a farm difficult. Over 90% are involved on some kind of environmental scheme.
Onshore wind roadmap
As part of its bid to help combat climate change, and hot on the heels of its solar strategy (see below), the government has just published its new roadmap for ramping up onshore wind capacity. The construction of new turbines has stalled over the past decade following a de facto ban by the previous Conservative administration. Key measures in the 40-plus-point plan include putting onshore wind on an equal footing with offshore wind and nuclear projects for infrastructure approvals, and repowering ageing turbines to extend clean energy generation.
Give me sunshine
The government has also issued its new solar roadmap, which sets out how sunshine will help the UK hit its target of generating 95% of its electricity from fossil-free sources by 2030. The ambition will require 45GW of new solar capacity to be installed and operational within the next five years. The roadmap includes 70 actions, including more upfront support to encourage domestic solar installations. Meanwhile, the UK’s largest solar farm at Cleve Hill in Kent is now operating at full capacity. At peak output, the 373MW site, which was the first solar farm to be granted planning consent under the Nationally Important Infrastructure Project regime, has provided 0.7% of the UK’s electricity needs.
Grey belt planning
Planning geeks might be interested to know that Medway council’s proposed new local plan includes the first review of Green Belt policy that identifies areas of previously developed land, which is now widely termed as grey belt. Knight Frank research found 11,000 such sites across the country with the potential for 200,000 new homes.
EA inspection jump
The number of on-farm pollution inspections carried out by the Environment Agency (EA) is set to jump by 50%, according to Defra. It says the extra visits will enable the EA to offer more guidance to farmers, strengthen links with supply chains and farm networks, make better use of technology like remote sensing, and take stronger action against serious or ongoing pollution.
Argentina Scotch boost
Scotch whisky has become the first international product to gain legal protection in Argentina as a Geographical Indication (GI). This will help combat counterfeiting by ensuring products labelled as Scotch whisky are genuine and meet strict production standards. GI products account for approximately 25% of all UK food and drink exports, with an estimated annual value of over £6 billion.
The Rural Report SS 25 – Out now
The Spring Summer 2025 edition of The Rural Report, Knight Frank’s flagship publication for rural businesses, which looks in more detail at many of the issues discussed in The Rural Update, is out now. The new report includes the latest news, research and insights from Knight Frank’s rural property experts, as well as thought-provoking contributions from some of Britain’s most iconic estates.
Available online and in print, you can click here to access the full report.
Properties of the week
East Sussex opportunities
Tulleys Wells Farm at Offham, near Lewes, offers several interesting opportunities for anybody looking to move to this lovely part of the country. The seven-bed house, believed to date from 1735, would make a charming rural residence, while the adjacent traditional Sussex Barn has great potential as an event, leisure or storage space. Almost 21,000 sq ft of modern agricultural buildings are suitable for livestock and arable agriculture, or possible conversion to alternative uses. The farm’s 222 acres of Grade 2/3 pasture have been home to an organic beef herd since 2012 and are enrolled in the mid-tier environmental stewardship scheme with a focus on enhancing biodiversity and improving soil and water quality. The guide for the whole is £5 million. Please contact Will Oakes for more information.
Historic Kent estate home to rent
For anybody looking to sample estate living without making a long-term commitment, Knight Frank’s Rural Consultancy team in Kent has an intriguing option on offer. Newhouse at Mersham, near Ashford, which was once home to The Countess Mountbatten of Burma and Lord Brabourne, is part of the idyllic 2,700-acre Hatch Park Estate. Now available to rent, the nine-bed period property costs £7,995 a month. For more information, please contact the team’s Katie Bundle.
Discover more of the farms and estates on the market with Knight Frank
Property markets
Development land Q1 2025 – Market falls
The value of greenfield development land fell by 2% in the first quarter of the year. Urban brownfield sites, however, lost 5% of their value over the same period, according to the Knight Frank Residential Development Index.
Farmland Q1 2025 – Values resilient
The Knight Frank Farmland Index, which tracks the average price of bare agricultural land across England and Wales, showed a marginal drop of 1% in the first quarter of 2025 to £9,072/acre. This follows a similar small decline in the final three months of 2024, bringing the annual fall to just 1.9%.
Country houses Q1 2025 – Mixed picture
The average price of desirable homes in the countryside slipped by just 0.3% in the first quarter of the year, according to the Knight Frank Prime Country House Index. Over the past 12 months, values have fallen by 1.6%.