The Savills Portfolio

Landscope

15 January 2020

The agricultural industry learnt from the Oxford Farming Conference that despite the delays to Brexit and lack of progress with the key Agriculture and Environment Bills in parliament, the agricultural transition period will not be delayed in England. 

In 2021 both the transition towards public money for public goods and pilot of Environmental Land Management will begin.

The New Year has also seen renewed focus on the linked debates surrounding land use, livestock farming emissions and afforestation, which in turn all form part of the debate about what future farm and environmental schemes should encourage. Henry Dimbleby perhaps summed up the challenges best in his speech about the National Food Strategy at the conference.

FOOD & FARMING

Vision for future: There will be no delay
At the Oxford Farming Conference Defra Secretary of State Theresa Villiers confirmed that the agricultural transition will start in 2021 as planned. It will phase out direct payments with the last being made in 2027, replacing them with payments for delivering public goods. The new approach will see farm support playing a central role in achieving the twin goals of protecting our climate and protecting nature. Ms Villiers said she wanted “our new scheme to deliver value for money as well as boosting sustainable productivity to support farmers in their hugely important task of feeding the nation”. Speaking specifically about Environmental Land Management (ELM) for which the pilot will open in 2021, Ms Villiers emphasised it will be led by individual farmers’ and land managers’ plans of what works for them and not a ‘one-size-fits all’ approach. Meanwhile she was keen to encourage applications for Countryside Stewardship agreements and announced that those who enter into new Countryside Stewardship agreements from 2021 will be able to exit those agreements at agreed points, without penalty, if they have a place in ELM. 

To make the agricultural transition and ELM possible, the Agriculture Bill needs to be passed. Ms Villiers announced it will be reintroduced this month. It will include new provisions to require the Government to conduct a regular review of food security, which addresses some criticism of the Bill’s original draft. It will be accompanied by an updated policy statement setting out what the Government expects from its reformed system, based on public money for public goods. Trees will undoubtedly play a role in this and Ms Villiers confirmed a consultation on the English Tree Strategy will launch in the spring. Legislation is also needed to provide a way for the UK’s governments to administer direct payments to farmers for 2020. This will be achieved by The Direct Payments to Farmers (Legislative Continuity) (DPLC) Bill, which was introduced into Parliament last week.

Bold vision and big questions for the National Food Strategy
In a thought provoking speech at the Oxford Farming Conference, Henry Dimbleby, who is leading on the National Food Strategy, talked about the linkage between food production, health and the environment. He illustrated how across the 20th century we “increased the amount of food available to eat due to the green revolution, we ate more and got heavier. And as we got heavier, we got sick. And as we increased the amount of food we grew on our land, we drove out nature and increased our carbon emissions”. His team has been asked to set out what needs to be done – across all departments of government and in society more broadly – to build a robust food system that provides good affordable food to everyone; restores the environment; maintains our countryside; brings good jobs to our communities – rural and urban; and stops making us sick.

Mr Dimbleby also posed some important questions which are highly relevant at this time due to the net zero plans and current trade negotiation activity.

1.  What is the point of doing the enormous amount of work required to create a net zero farming economy here, if we then just import that carbon from other countries?

2.  The same goes for animal welfare, biodiversity, and environmental pollution. We cannot only consider the externalities of food we produce here but must apply the same standards to food imports.

On a similar theme NFU President Minette Batters urged the Government to commit to introducing a food standards commission that scrutinises future trade deals and safeguards British farming’s place as a global leader in climate-friendly food.

The National Food Strategy is due to publish an interim report in the spring. It will analyse the current system and contain a vision of the kind of food system we might aspire to. It will lead to regional discussion and a Citizens’ Assembly before the final report is published in winter 2020/21.

Agri-TechE and its One Agriculture concept
Agri-Tech East was established to bring together farmers and growers with scientists, technologists and entrepreneurs to create a global agri-tech innovation hub. The organisation has rebranded as Agri-TechE to reflect the success of the organisation, and that its reach has become UK wide and international membership is growing. Its recent REAP conference introduced the concept of “One Agriculture” which recognises that agriculture is a system and productivity improvements also have the potential to be good for animal welfare, human health and that of the planet. Key areas for innovation and improvement are soil health, reducing reliance on synthetic fertilisers and plant protection products, better managing reserves of fresh water and using data effectively to support decision-making.

POLICY

Trade talk
Defra Secretary of State Theresa Villiers told farmers at the Oxford Farming Conference that we “can maintain and indeed enhance UK standards as we negotiate new trading relationships”. She promised the “Government will defend our national interest strongly … and will be prepared to walk away from negotiations if that is in the national interest”. Responding to a question from the floor Ms Villiers assured farmers that the powerful tools of the World Trade Organisation allow us to impose tariffs where we believe products do not meet our high standards; this is not strictly true and it has been suggested the Environment Secretary misspoke.

Looking at the bigger picture, at the first meeting between Prime Minister Boris Johnson and the new EU Commission chief Ursula von der Leyen, Mr Johnson reinforced that the process of negotiating an EU UK free trade deal will not be extended and insisted that striking a deal before the end of December 2020 is possible. Speaking ahead of the talks, Mrs von der Leyen, who hopes the new deal will be based on "zero tariffs, zero quotas, zero dumping", said that it would be "impossible" to reach a comprehensive trade deal by the end of 2020. She has previously warned this could create another cliff-edge situation.

Environmental positions filled
The Labour party has announced Luke Pollard, MP for Plymouth, Sutton and Devonport, as its new Shadow Environment Secretary. Mr Pollard has been an MP since 2017 and was previously the Shadow Minister for Flooding and Coastal Communities. He was one of the first MPs to call for parliament to declare a climate emergency so is likely to take an environment focused stance on issues. Mr Pollard is a keen advocate for animal welfare and rights, and a vocal supporter of the International Fund for Animal Welfare. His family have a farm - he tweeted a picture whilst feeding sheep on Christmas day. Meanwhile, Zac Goldsmith has been offered a lifetime peerage following his defeat at the ballot box. This allows Mr Goldsmith to retain his ministerial position at Defra where he is responsible for forestry, animal welfare and food chain policy. He will continue to attend cabinet meetings.

ENVIRONMENT & NATURAL CAPITAL

Land use change or technology to cut emissions?
The start of the New Year has brought new focus to the role land use can play in reducing agricultural emissions or to go further and offset emissions of other industries. Former chief scientific adviser at Defra Professor Sir Ian Boyd has argued that half the nation’s farmland needs to become woodland or natural habitat to restore wildlife and fight the climate crisis. He said this farmland only produces 20% of our food, which could be replaced with modern ‘vertical farms’ allowing farmers to earn money for sequestering carbon on their land. Writer and activist George Monbiot made a similar argument last week in his Channel 4 documentary “Apocalypse Cow: How Meat Killed the Planet”. His arguments attracted criticism from Tony Juniper, Head of Natural England, who said "billions of animals could be a very good thing, depending on how they are reared. Before farming there were many billions of grazing animals and they shaped ecosystems. More naturalistic farming could mimic some of those ecological effects, e.g. in relation to soil carbon".

Land use change is not the only way to cut emissions. A report for WWF Scotland explores how Scottish Agriculture can play its part in delivering net zero and focuses on the use of established technologies. In an earlier report for WWF Scotland it was calculated that in order for Scotland as a whole to achieve net zero well before 2050, the agriculture sector would have to play its part with a 35% reduction in its emissions. This latest work shows this is possible, concluding that a combination of established techniques could comfortably reduce Scottish farmers’ emissions by 38% over the next 25 years. The techniques used include improved nitrogen fertiliser use, organic manure/slurry storage and use, mechanisation, soil management, cropping systems and management, livestock nutrition, health and breeding, as well as improved farming systems including conservation agriculture, organic farming, pasture-fed livestock production and agroforestry.

National Trust to focus on helping nature thrive – and plant trees
The National Trust will plant 20 million trees over the next ten years as part of its plan to achieve net zero by 2030. The decision will cost £90-£100 million and convert 18,000 hectares of its land to woodland, an area one and a half times the size of Manchester. It will increase woodland cover on its land from 10% to 17%. The trust acknowledges that it cannot achieve this alone, so will need to work with farmers, other partner organisations and government. Work to reduce emissions from its farmed and let estate, and continuing to switch to renewable energy sources, will also play their part in its net zero by 2030 plan. In a speech to mark the Trust’s 125th anniversary Hilary McGrady, the Trust’s Director-General, said “we will be focusing on nature in the decades ahead” due to the climate crisis and a growing disconnect between people and nature. Mrs McGrady argues it is bad for our health and bad for nature because “how connected people feel to nature, predicts how far they will go to care for it”. The Trust will work to rectify this by bringing nature closer to people and people closer to nature. Ecosystems depend on unbroken chains and corridors, so it is mapping where such corridors might be possible and through work with partners, aims to create 20 corridors by 2030.

Scotland: Strengthened grouse moor regulation and monitoring recommended
Rural stakeholders including Scottish Land & Estates and Scottish Countryside Alliance have warned that the recommendations of a government commissioned review “will mean a seismic change for grouse moors across Scotland”. The Grouse Moor Management Review Group, chaired by Professor Alan Werritty was split on the issue of introducing a licensing scheme for the shooting of grouse. As a compromise it recommended that one should be introduced if, within five years there is no marked improvement in the ecological sustainability of grouse moor management, as evidenced by the populations of breeding Golden Eagles, Hen Harriers and Peregrines on or within the vicinity of grouse moors being in favourable condition. Ultimately the group considered the licensing question to be a political decision. The group also recommended that muirburn becomes a licenced activity, legal regulation of mountain hare management should be increased and a voluntary Code of Practice introduced for the use of medicated grit. If these approaches prove unsuccessful the group recommended all three activities should be licenced. In response rural stakeholders have highlighted that Scotland’s raptor persecution laws are the toughest in the UK, and are already due to be strengthened, the sector has willingly embraced change and they argue enhanced training and codes of practice are the best solution to the muirburn, mountain hare management and medicated grit issues. The Scottish Government will give a formal response to the group's recommendations in due course.

Scotland: General licences
Scottish Natural Heritage has confirmed that the terms of the Scottish General Licences, which permit the taking of certain species for a variety of reasons will remain unchanged until 31 March 2020. Changes will be made to the licences from 1 April 2020, the details of which will be announced after further consultation.

PROPERTY & DEVELOPMENT

Planning permission cannot be bought
In an application for consent to build a wind turbine on agricultural land, the developer promised to make an annual community fund donation. This promise was expressly considered by the Council when deciding to grant permission, indeed the annual donation was even made a condition on the planning permission. In a judicial review challenge brought by a local resident, The Supreme Court found that the obligation to make a donation was serving an ulterior motive and did not relate to the development, so it should not have been treated as a “material consideration” in the decision to grant the planning permission. The Supreme Court therefore ruled that the grant of planning permission was invalid.

Scotland: New build homes to be more efficient
New regulations are planned in Scotland which would require all new homes to use renewable or low carbon heating from 2024. Similar rules are planned for non-domestic buildings.

England: New Flood risk maps
The Environment Agency has published updated maps which show the risk of flooding from rivers and sea, and surface water.

BUSINESS & ECONOMY

Broader tastes in 2020
A new report from Bidfresh says caterers should offer a wider range of menu choices to take advantage of changing trends. Seaganism, a plant-based diet inclusive of fish and seafood, and sustainarianism, where the ethical and environmental impact of food is factored into choices, are just two trends caterers should be aware of. Despite significant attention being paid to plant-based diets, traditional animal products such as steak and salmon are all still in demand. Stephen Oswald, Chief Executive of Bidfresh believes that when customers do eat meat, they “expect a premium product with provenance”. All findings point to a more conscientious consumer base in the hospitality and food service sector. Consumers still expect value for money when eating out, but are bringing an increasingly complex set of demands with them. Savills recent Spotlight on Rural Diversification highlighted consumers should be at the heart of every business decision; Bidfresh’s report demonstrates the importance of taking this on board and ensuring that when adding value to food, products and messaging tap into key consumer trends.

Tax exemptions: Where there’s muck there’s brass
At the Oxford Real Farming Conference a report looking into the tax exemptions benefiting UK agriculture was published by People Need Nature. It calculates that the largest single benefit is the industry’s exemption from Business Rates, which it values at £1.02 billion. Overall the charity argues farmland and farm businesses benefit from £2.4 billion of tax exemptions a year.

A budget to boost the north
The Chancellor has announced that the next budget will be on 11 March. The Government has said it will use it to unleash Britain’s potential, deliver on tax promises and level up and spread opportunity across the country. It has been reported that decades-old public spending rules which judge value for money will be ripped up, as the historic focus on boosting overall national economic growth has tended to favour the south. Instead greater importance will be given to improving wellbeing and investing to reduce the productivity gap between the north and south.

OTHER RURAL NEWS

Supercharging full-fibre rollout
Ofcom will supercharge investment in full-fibre broadband by “removing the remaining roadblocks to investment and supporting competition, so companies can build the networks”. Its new five year plan proposes a different strategy for urban and rural areas. In more sparsely-populated rural areas, where there is no prospect of competing networks being built, Ofcom plans to support investment by BT. If BT commits to build fibre in these parts of the country, Ofcom will part deregulate wholesale charges to allow BT to recover costs earlier. It will also allow BT to close the copper network in areas where full-fibre is built; this will reduce maintenance costs and force consumers to migrate to full-fibre lines, helping to improve the business case for investment.

Community pubs funding
New support has been launched to help communities take pubs into their ownership or expand the range of services offered in their pub. The Government is providing £650,000 to More than a Pub, a Plunkett Foundation project, which provides small grants and specialist advice for community groups at the start of their journey to community ownership. Elsewhere, £500,000 has been allocated to Pub is the Hub, which focuses on helping pubs to provide community services in remote and rural areas.

And finally…
Chilli lovers have healthier hearts
People who consumed chilli pepper more than four times a week were found to have a 44% lower chance of dying from coronary heart disease according to a study of nearly 23,000 people. There was also a 60% reduction in the risk of death from a stroke. It is not necessarily the case that the chilli peppers are responsible, as it may be that those who prefer spicy foods have other biological differences which explain their lower risk. The observations are puzzling because in general the chilli lovers were less healthy, more likely to be overweight, diabetic and suffer from high blood pressure. Perhaps the message to take from this is that there is still much we don’t understand about biology and nature.