The Savills Portfolio

Landscope

11 September 2019

Speaking in a Commons debate the Agriculture Minister George Eustice has revealed that a headage payment and slaughterhouse premium are under consideration to support sheep farmers in the event of a no-deal Brexit, whilst the recent spending round was used to address the historic underfunding of less favoured areas in Scotland and award new funding weighted towards farmers in challenging environments.

Landscope also covers a recent planning appeal which could set a useful precedent for extending the working life of windfarms, and news that the head of the Government’s review of national parks will recommend a fivefold increase in the number of rangers. Such a significant increase in staff for pubic engagement and education would help these areas of countryside provide more public goods.

FOOD & FARMING

No-deal support for sheep farmers
The red meat sector, especially lamb, is exposed to the most risk in the event of a no-deal Brexit. This is due to a high reliance on exports to the EU (especially France) which would face high tariffs (48-76%) and although some imports to the UK would be subject to equal tariff measures, it’s expected the UK will be oversupplied with lamb for some time, leading to depressed market prices. In a House of Commons debate on 3 September, Agriculture Minister George Eustice said “we do not want to reduce the capacity of our flock”, and revealed that the Government is considering two possible support options: “a headage payment on breeding ewes” and a “slaughterhouse premium, which would in effect involve a supplementary top-up payment for lambs at the point of slaughter”. He did not elaborate on the extent of support available, but said “modelling suggests that increased supply in the domestic market could reduce prices by up to 30%”, and put this into context by describing it as “simply going back to levels prior to the referendum result”. This could suggest a more significant fall in market prices would be needed before support is offered.

Turnover of agricultural co-operatives at a three year high
The UK’s 434 agricultural co-operatives turned over £7.9 billion last year, a three year high. Co-operatives are an important tool which UK farmers can use to build market power for negotiating and to process and add value to their produce. The Government also wishes to encourage co-operation within the industry, an enhanced Producer Organisations scheme is planned under the Agriculture Bill. Rural communities also form co-operatives as one way to take community ownership of their pubs. The Co-op Economy report shows that between 2012 and 2019 the number of co-operatively owned pubs has increased five-fold to 180.

Labour’s animal welfare manifesto
Labour has released its animal welfare manifesto following detailed public consultation. It contains 50 proposals covering domestic pets, animals in sport, wild animals, marine life and farming. They include:

•   Appointing an independent Animal Welfare Commissioner

•   Allowing residential tenants to keep pets as a default

•   Banning live exports for slaughter and fattening (with an exemption for the Irish border)

•   Design post-Brexit farm subsidies to reward and encourage both high animal welfare standards and environmental practices

•   Strengthening the Hunting Act

•   Ending the badger cull

•   Launching an independent review into the impacts of driven grouse shooting

•   Tackling livestock worrying in line with the Livestock Worrying Police Working Group’s recommendations.

Europe on high alert as pig disease approaches
EU member states should apply strict biosecurity measures to combat African Swine Fever said Anca Paduraru, EU spokesperson for public health and safety. Though harmless to humans, there is no vaccine for the virus which is often lethal for pigs and has led to the loss of over 100 million pigs in the last year in China. Eastern Europe, particularly Romania, has already seen hundreds of outbreaks. Western Europe has remained relatively free of the disease, with only Belgium reporting one detection in a wild boar in 2018.

Antibiotics resistance is the bigger threat
Antimicrobial resistance could kill us before climate change according to the UK’s chief medical officer. Unless we get on top of the issue, at least 10 million lives a year could be lost to ‘superbugs’ which are not treatable with conventional medicine. Professor Dame Sally Davies warned that some countries outside of the EU use antibiotics in livestock farming “at dramatically high levels” and that the UK “should not be importing beef or other animals from countries where antibiotics have been misused”. She considers growth promotion to be a misuse, “because it leads to problems across the world”. The practice was banned in the EU in 2001 and the USA in 2017, however there are concerns in America that the line between growth promotion and their permitted use for disease prevention is blurred.

Germany to ban glyphosate use
Germany will ban the use of the herbicide glyphosate from 2023 due to concerns its use damages insect populations. The ban will take effect when the current EU approval period for the chemical expires. Bayer’s acquisition of Monsanto, means the leading brand of glyphosate ‘Roundup’ is now owned by a German company.

Minister leaves Defra
Following the resignation from Government of Amber Rudd, the Environment, Food and Rural Affairs Minister Thérèse Coffey has been promoted to become Work and Pensions Secretary. This is her second promotion in two months, having been a Parliamentary Under Secretary of State within Theresa May’s government.

POLICY

Cash boost and fairer funding formula for Scottish farmers
A one off payment of £160 million for Scottish farmers was announced as part of the spending round. This follows the Government acknowledging that a flawed methodology was used for the historic allocation of ‘convergence funding’ between the countries of the UK. Moving forwards over £56 million of new funding has been allocated for farmers until 2022, 63.7% of this will go to Scottish farmers as the direct support budget will be tilted slightly towards those who farm in challenging environments, such as upland areas.

This outcome follows a review led by Lord Bew of Donegore. Looking beyond 2022 he recommended that budget allocation principles for post 2022 funding should recognise the social value of upland farming, the challenges facing those practising it, and the potential for delivering environmental public goods alongside sustainable food production. Finally, he concluded by recommending that Defra and the Treasury should “ensure that funding for agriculture and rural areas more broadly is protected, if not enhanced, given its high benefit-to-cost ratio”. Responding on this point, the Government has said its funding choices will be based on the domestic priorities across the UK and will be affected by the economic environment and the fiscal position; this suggests a protected or long term budget for UK agriculture is unlikely.

No-deal Brexit and food imports
Representatives of the British Retail Consortium, Freight Transport Association and the former director general of HMRC’s Cross Government Border Delivery Group recently appeared before the Exiting the European Union Committee to give evidence about the potential implications of a no-deal Brexit on imports and exports through the Dover/Calais route. The evidence session revealed that the leaked Yellowhammer report contained worse assumptions than the Freight Transport Association is making, but a key concern remains whether truck drivers have the right documentation to operate in the EU following a no-deal Brexit (at present 20% don’t). When asked to comment on Michael Gove's claims that it was “categorically untrue that the supply of fresh food would be affected under a no-deal Brexit”, Andrew Opie, director of food and sustainability at the British Retail Consortium said it had provided clear information to Government on disruptions to imports and exports, which made clear the biggest threats surrounded fresh produce. “He said he could see no basis on which Mr Gove could have made the claim”. When questioned on food prices, Mr Opie said it was “very difficult to predict food prices” but his own view was there would be inflationary pressures.

Consultation on tax reporting
The Office for Tax Simplification has produced two online surveys for those who are landlords or self-employed. The surveys are open until 20 September and seek views on tax reporting, payment arrangements and potential areas for improvement.

ENVIRONMENT & NATURAL CAPITAL

Public concern at all time high
Nine out of 10 adults in England are concerned about threats to the environment. Natural England’s “Monitor of Engagement with the Natural Environment” (MENE) is the world’s largest scientific study of its kind. Nearly two-thirds are specifically worried about biodiversity loss, an increase from less than half of those surveyed in 2014/15. Despite concerns, only 34% said they intend to make lifestyle changes to protect the environment, whilst 54% said they were not likely to make any changes at all. The Government’s outgoing chief environment scientist Professor Sir Ian Boyd recently warned that the public have little idea of the scale of the challenge from the so-called Net Zero emissions target, and that we must shift away from consuming.

Cons outweigh pros of climate change
Any advantages for European agriculture from global warming will be outweighed by losses caused by extreme events and environmental stresses. Advantages include longer growing seasons and an increase in the range of crops viable in northern Europe. Despite this, the European Environment Agency research estimates the impacts of climate change could reduce EU agricultural income by up to 16% by 2050. Scientific developments have a part to play in mitigating the impacts of climate change, for instance scientists at Heriot-Watt University have identified a gene responsible for drought resistance in barley which, it is believed, could help future-proof the cereals industry to increasingly dry conditions

PROPERTY & DEVELOPMENT

Wind farm ruling sets precedent
A government planning inspector has upheld an appeal to keep Kirkby Moor wind farm operational until 2027, despite South Lakeland District Council’s initial refusal. Council planning officer Michael Hoar said it set an “interesting precedent” for extending the working lives of wind farms, and hinged on a technicality. New wind farms need the backing of the local community but the re-powering of existing wind farms does not. Some questioned whether simply extending the operational lifetime of a wind turbine really counted as re-powering. The Kirkby Moor development was one of the UK’s first wind farms and came online in 1993. Please contact Andrew Fido if you would like to discuss wind turbine planning permissions.

Drive for greater connectivity
Bigger and taller phone masts could be built under expanded permitted development rights to speed up the roll out of 5G networks. Ministers want to relax rules so that masts up to 50 metres tall can be built to improve mobile phone coverage in rural areas. Current rules allow masts 25 metres high. 5G technology offers mobile speeds 10 to 20 times faster than previous generations. Digital Secretary Nicky Morgan has opened the plans for consultation until 4 November.

Ms Morgan has also launched a £30 million, UK wide competition to pioneer 5G testbeds. The Rural Connected Communities competition is part of a £200 million fund dedicated to 5G development. Up to 10 rural locations will be selected to run trials. 5G is already being trialled in Shropshire to use drones and tractors for soil analysis and targeted crop spraying. It is also being used in the Orkney Islands to improve the efficiency of wind farms.

Also in Scotland, remote islanders in the Outer Hebrides now have ultrafast broadband. All of Grimsay’s 113 households and 220 households on the neighbouring island of Great Bernera have been connected. The project required 90km of new cable and provides a 1Gbps connection speed, 18.5 times faster than the UK average of 54Mbps. An Openreach spokesman said “if we can bring full fibre broadband to a scattered community like Grimsay, then it can be done anywhere”.

Discount for buying local
According to reports in The Times, first-time buyers could get a discount of up to 20% on new homes in the area where they grew up. Housing Secretary Robert Jenrick said “I want young people… to be able to stay in their communities”. He identified problem areas such as those with a high proportion of second homes, but said the policy could be applied nationally and costs would be borne by developers.

BUSINESS & ECONOMY

Budget increase for Defra
Defra was awarded a 3.3% increase in its budget by the recent spending review, as the Chancellor Sajid Javid announced the end of austerity. £432 million has been allocated to the department to fund Brexit preparation, including £20 million for developing a replacement for the CAP in England. More than £30 million will be made available to improve air quality as well as another £30 million for terrestrial and marine biodiversity measures. The Government will also maintain the commitment to provide the same cash total in funds for farm support until the end of this Parliament and will confirm the amount in the future. Originally interpreted as a guarantee until 2022, an early general election looks increasingly likely; farmers representatives will no doubt be lobbying for the commitment to be repeated or extended in new manifestos.

Labour: Force landlords to sell
Labour will look to help millions of private tenants buy their rented homes for a “reasonable price” says Shadow Chancellor John McDonnell. He said he wished to tackle the growing buy-to-let market and problem landlords who want to make a “fast buck” at the expense of the tenants. The National Landlord’s Association (NLA) accused Labour of threatening to “punish” all landlords “for the sins of the few”. Chris Norris, director of NLA policy and practice said “to suggest that private landlords should be selling their properties to their tenants at a below market rate arbitrarily set by politicians is ludicrous”.

Consider succession planning
A new guide published by the Scottish Land Commission outlines the ways in which an agricultural tenancy can be passed on to another person. It covers lifetime assignation, bequeathing a tenancy and intestate transfers when there is no will.

OTHER RURAL NEWS

National Parks need more rangers
Julian Glover who is the head of the Government’s review of national parks and Areas of Outstanding Natural Beauty (AONB), will recommend that 800 US-style rangers should be recruited to welcome and guide visitors. His team has taken inspiration from the parks service in the US and suggests that commercial sponsorship could fund this fivefold increase in the number of rangers. Figures from Natural England’s recent Monitor of Engagement with the Natural Environment survey highlight the benefits of visiting the natural environment; 90% of respondents said their last visit made them feel “refreshed and revitalised” while 88% said it made them feel “calm and relaxed”. It did however show inequality in opportunities to engage; children from the most deprived areas are 20% less likely to spend time outside, than those in affluent areas. 70% of children from white backgrounds spend time outside once a week compared to 56% of children from BAME backgrounds. It seems likely society would benefit from investments in the education, accessibility and guidance available in national parks and AONBs.

And finally…
Loch Ness Monster revealed
The Loch Ness Monster may be a giant eel scientists say. Suggestions that the Monster could be a catfish, a wandering Greenland shark or even a prehistoric reptile called a plesiosaur were all discounted. European eels migrate over 3,000 miles from the Sargasso Sea near the Bahamas to spawn and lay eggs in the loch. Researchers said their data does not reveal the potential size of the eels but also said “we can't discount the possibility that there may be giant eels in Loch Ness”. The New Zealand researchers tried to catalogue all living species in the loch by extracting DNA from water samples. They hoped interest in the Loch Ness legend would raise the profile of environmental DNA research.