Local councils and national parks are warning that a lack of skills and funding could threaten nature recovery plans. Whilst in Scotland the government’s new natural capital investment principles aim to ensure investments deliver benefits for communities. The Lump Sum Exit Scheme has been launched in England to help farmers retire and create opportunities for others; and the Environment, Food and Rural Affairs Committee is warning of a labour shortage equivalent to 12% of roles in the food and farming sector.

FOOD & FARMING

Labour shortages in the food and farming sector
The House of Commons’ Environment, Food and Rural Affairs Committee has reported on the impact of the ongoing labour shortages in the food and farming sector. It concluded the sector has been suffering from acute labour shortages due to Brexit and Covid-19. In August 2021, the number of vacancies was estimated to be 500,000 out of 4.1 million roles in the sector, and these labour shortages have threatened national food security, and negatively affected animal welfare and the mental health of those working in the sector. The pig crisis, unharvested crops and disruption to the food supply chain’s just-in-time delivery model are very tangible evidence of the impact of the current labour shortages. In response to the issue, the committee makes a number of recommendations to government. These include ensuring government engages better with the industry, reviews aspects of the Skilled Worker Visa scheme and increases the number of visas available through the Seasonal Workers Pilot scheme, expanding the scheme and making it permanent. The report also calls on the government to develop a long-term labour strategy focused on deploying new technology and investing in better education to reduce the sector’s dependence on overseas labour.

Waitrose committing to grass-fed dairy cows
Waitrose has made a commitment that all the cows supplying the supermarket chain’s own-label milk will be grass-fed for more than half a year. The milk that comes from these cows will be labelled as ‘free-range milk’. The commitment follows research conducted by Waitrose’ dairy farmers in conjunction with behavioural scientists from Scotland’s Rural College, which found spending time outside was one factor which led to improved emotional wellbeing for cows. James Pickering, Waitrose’s senior agricultural manager, said ‘the move to a free-range certification for our dairy cows will help ensure whenever possible that our cows go outside for a minimum of six hours a day, something we know will give shoppers who care about welfare standards real confidence’.

Breeding low-methane cows
British genetics firm Genus Plc, National Milk Records and the Agriculture and Horticulture Development Board are collaborating to help breed cows that produce less methane, by reducing their level of rumen emissions. The project will use a £25 genetic test and a chart known as the EnviroCow Index to grade each female calf by its likely environmental impact. It will take at least three years for the programme to begin to cut methane emissions as it will rely on selective breeding to produce cattle that have a lower methane output.

Land, food, power and sustainability – a rural sector update
The discussion around future land use was already gaining momentum well before the atrocities started in Ukraine. And those events have only magnified the huge challenges we face in order to manage all the demands on our finite land resource. Therefore, Savills Rural spring market update webinar is going to focus on how we balance food production, renewable energy generation, biodiversity and also meet our net zero targets. Our speakers will ask what does this all mean for farmland and rental values and what strategies might landowners and farming businesses adopt in the short to medium term? The webinar is taking place on Wednesday 4th May 2022, 2pm – 3pm. If you would like to join it, please register here.

POLICY

Lump Sum Exit Scheme launches
The much anticipated Lump Sum Exit Scheme has been launched. It provides a one-off opportunity for farmers in England who wish to leave the industry to take their remaining transition period direct payments as a more tax efficient lump sum. The scheme is being administered by the Rural Payments Agency (RPA) and will accept applications until midnight on 30th September 2022. The lump sum amount farmers can receive is based on the average of their BPS claims between 2019, 2020 and 2021, and is subject to a cap, meaning no farmer will receive more than £99,875. The cap will typically affect farmers claiming over 182 hectares (450 acres) of non-Severely Disadvantaged Area (NSDA) and SDA moorland entitlements or 664 hectares (1,640 acres) of moorland. The key rules and eligibility criteria are summarised in our Lump Sum Exit Scheme briefing note.

Prospective applicants can request a lump sum payment forecast statement by contacting the RPA. After applying, in order to comply with the scheme rules farmers must transfer their agricultural land in England (they can keep up to five hectares) or plant it with trees under a woodland creation scheme. They then need to complete an Entitlements and Evidence form to surrender their English BPS entitlements and confirm any land transfers required have been made. This must include a certificate completed by an agricultural valuer or solicitor who has reviewed the evidence and confirms that the scheme rules have been met. If you would like to discuss the Lump Sum Exit Scheme further, please contact Stuart Nicolls.

Tenancy Working Group seek tenant farmers’ views
The Tenancy Working Group was created earlier this year to ensure tenant farmers in England can access and benefit from the new Environmental Land Management (ELM) schemes. The working group chaired by Baroness Kate Rock is currently reviewing existing evidence and engaging with farming organisations. It hopes to take a solutions-based approach to ensure these new support schemes work for tenant farmers. The group is keen to hear directly from tenant farmers, and has launched an online survey to gather views on a range of topics such as access to the three components of ELM and new tree planting schemes. It will take around ten minutes to complete and provide valuable information to inform the group’s recommendations to Defra. An independent review will be published later this year.

ENVIRONMENT & NATURAL CAPITAL

A lack of skills and funding for nature recovery
Councils across England have raised concerns that they may not have the skills needed to ensure biodiversity net gain (BNG) is delivered effectively. Defra’s consultation on BNG closed in early April, and the Local Government Association (LGA), the cross party national membership body for local authorities, published its consultation response, which demands more detail on conservation covenants. It also warns that councils may not have the skills to check that biodiversity improvements have been carried out. Within the proposed policy, local councils are fundamental to reviewing, monitoring and authorising the biodiversity gain created on or offsite. The Royal Town Planning Institute also highlighted a lack of funding for local authorities as a key issue that needs to be addressed. Conservation covenants are one of two tools within the proposed policy that are intended to be central to delivering BNG, but the LGA is concerned that they are ‘completely new and there is little detail…on what they are and how they are expected to work in practice’. The LGA also writes that it fundamentally disagrees with how the BNG credit scheme is set to work.

Alongside this concern over the resourcing and application of BNG, England’s National Parks have warned that without a funding boost they will be unable to meet the ambition of the government’s proposals which are seeking to change how protected landscapes are managed in future. In response to the government’s consultation on the governance of England’s protected landscapes, National Parks England has supported the greater policy ambition but states that within the current context of government funding cuts, adequate resources, in particular public investment, is what will determine the success of the new policy.

A call for tougher regulatory requirements on woodland carbon offsets
The House of Commons Welsh Affairs Committee has called for tighter regulation of companies that purchase farmland as part of carbon offset schemes, as it is concerned of the unintended consequences of ‘planting too many trees, of the wrong type, in the wrong place’. The committee calls for a framework that ensures companies investing in woodland carbon offsets have credible emissions reduction programmes, to make sure they are not offsetting to avoid emissions reduction. Its report says the committee opposes ‘any attempts to game the system' by investing in viable farming land purely in order to offset carbon emissions accrued by companies elsewhere. As well as greenwashing and careless land use change, the report states there is a risk that converting farmland to forestry will impact rural communities in Wales, reducing job opportunities. The Welsh government is considering this issue carefully and is not opposed to carefully planned tree planting, however it does not want tree planting to be prioritised to the detriment of farming businesses. The Welsh government has now set up an expert group to advise ministers on how investment in tree planting can be secured in a way that retains local control and ownership.

PROPERTY & DEVELOPMENT 

Demand for development land to remain high
Savills has launched its latest development land research. It shows that whilst the market for greenfield development land has been at its strongest since the 2008 global financial crisis, new environmental regulations are likely to limit growth over the next five years. Savills Development Land Index shows that land values increased nationally by 8.8% in 2021. Savills is predicting that despite rising build costs and the end of Help to Buy, development land values will rise by 4.4% by 2026, with the appetite for land remaining strong from a variety of developer types.

Effective ban on onshore wind to continue
Curbs on onshore wind developments will remain in place following the release of the government’s Energy Security Strategy. Onshore wind had looked to be regaining favour, however Conservative backbenchers expressed fierce opposition to more wind farms in the countryside, fearing a rebellion from voters. Prior to the release of the strategy, Grant Shapps described the turbines as "eyesores", adding that he personally does not favour "a vast increase" in the number of them.

The Department for Business, Energy and Industrial Strategy has since signalled that only “a limited number” of onshore wind farms will go ahead and it “will be consulting on developing partnerships with a limited number of supportive communities who wish to host new onshore wind infrastructure in return for guaranteed lower energy bills.” For more information on onshore wind prospects see our latest blog.

As for other technologies, it is nuclear that stands to gain the most from the new strategy. Capacity is expected to increase from seven gigawatts to 24GW with the addition of up to eight reactors. The capacity target for offshore wind was also raised from 40GW to 50GW, with current capacity sitting at around 11GW. Surprisingly, and to the ire of environmentalists, North Sea exploration for oil and gas is also likely to be accelerated and fracking has not been explicitly ruled out. Hydrogen also benefits with a pledge to double the UK’s target for hydrogen production to “up to 10GW” by 2030.

There was little mention of energy infrastructure or energy efficiency. Commitments around solar were vague, with the strategy saying the government will “look to increase” the UK’s current 14GW of solar capacity, which “could” grow up to five times by 2035, taking it to 70GW. An earlier, leaked version of the strategy had set firmer goals of 50GW of solar capacity by 2030 and 70GW by 2035.

Business & Economy

Investment principles for Scotland’s natural capital market
The Scottish government has published a set of interim principles to help promote responsible investment in Scotland’s natural assets and develop a socially fairer, high-integrity market. The focus will be on ensuring investment delivers social, environmental and economic benefits rather than focusing mainly on environmental benefits. These interim principles will help inform and develop market rules, including options for enforcement mechanisms for the market, such as regulation. Under these new principles, investment should:

• Support diverse and productive land ownership

• Deliver integrated land use

• Deliver public, private and community benefit

• Demonstrate engagement and collaboration

• Be ethical and values-led

• Be of high environmental integrity

The Scottish government recognises that private investment in Scotland’s natural capital will be critical to enabling the pace and scale of action required to deliver Scotland’s ambitions on addressing climate change and biodiversity loss. Minister for Business, Trade, Tourism and Enterprise Ivan McKee highlighted that “the Green Finance Institute has estimated the investment gap for nature restoration in Scotland at around £20 billion over the next decade”.

Interest from investors is increasing, and a recent report published by the Scottish Land Commission shows there is a more diverse group of stakeholders interested in investing in rural land. This is due to a heightened demand for smaller farms as lifestyle holdings and a growing demand for planting land and forestry from corporate entities and investors interested in carbon and natural capital. The report also confirmed the Scottish rural land market is characterised by high demand but continued low supply, which is resulting in rising values.

OTHER RURAL NEWS

Rural grants
The Welsh government is making £227 million available over the next three years to support the resilience of Wales’ rural economy and natural environment. This is in response to the ending of the EU Rural Development Programme in 2023. Some of the eleven schemes are already open for expressions of interest, further details of them and the upcoming schemes are available here.

In Scotland the next round of the Sustainable Agriculture Capital Grant Scheme will open on 26th April. It will offer funding for low emission slurry spreading equipment, real time inline flow rate and nutrient analysis and slurry store covers. Further details are available here.

And finally…
Potato protein
Potato supplier Branston is investing £6 million in a facility to extract plant protein for use in vegan and vegetarian food from secondary grade potatoes. The Lincolnshire plant will add value to potatoes typically used for ready meals and mash or anaerobic digestion and stock feed. It will provide another alternative to the use of imported soy protein in food products.