The Savills Portfolio

Landscope

29 August 2019

Whilst cereal farmers are generally reporting above average yields, brassica producers are warning that crop damage caused by heavy summer rains will affect cauliflower supplies into September and could lead to Brussel sprout supply issues at Christmas. 

There have been further warnings about the potential impact of a no-deal Brexit on the agriculture industry, which the Government has rebutted as it has committed to provide additional sector specific support if it becomes necessary. Finally a recent prosecution relating to the felling of protected trees, highlights the importance of thorough checks before commissioning tree work.

FOOD & FARMING

Wet weather causes cauliflower crisis
The UK is facing a shortage of brassicas after heavy rain damaged crops in Lincolnshire. Supplies of cauliflowers, broccoli and cabbages are expected to be low into early September. Young crops were also lost so there could be a shortage of Brussel sprouts at Christmas. The situation has been aggravated by a reduction in the area being planted due to poor returns over the last few years. Crops in Europe have been affected by extreme temperatures so securing alternative supplies is difficult.

Improved weather last week allowed the UK cereal harvest to resume. In Scotland a warm spring and early summer provided ideal growing conditions but recent rainfall was preventing machinery from entering fields and causing quality to decline. UK November feed wheat futures have dropped to a contract low of £133.50 per tonne due to sterling strengthening and the expectation that both UK and World supplies will be high. 

Have your say on the future of food
Insight and inspiration to help transform our food system has been requested by Government, anyone is welcome to feed in ideas, “no idea is too big or small to be considered” the Government says. Our food system is being reviewed for the first time in 75 years in order to ensure it enhances the environment and is resilient to the challenges posed by climate change. The role of food in public heath will also be examined and should lead to more joined up policy in future. It will also cover innovation and technology, and analyse what is already working well. With that in mind, customers, farmers and academics are all encouraged to submit a response. 

Beef battles BBC bias
The BBC has been accused of ‘vegan bias’ by misrepresenting recommendations from the IPCC’s Climate Change and Land Use report, after it proclaimed a “plant-based diet can fight climate change”. Farming groups were quick to point out that the report argued no such thing and in fact endorsed grass-based livestock systems. NFU president Minette Batters said many farmers were feeling “isolated and terrorised” because of the media’s “deeply flawed approach to tackling climate change”. The issue follows recent criticism of the corporation’s coverage of Brexit’s potential effect on the farming industry, which saw Countryfile and the BBC accused of scaremongering. The BBC has since taken a special look at agriculture as part of its ‘Focus on Farming series’. Throughout last week, it covered issues affecting farming such as climate change, Brexit, alternative diets and farm safety. Friday’s Radio 4 PM programme included an interview (starts at 45:30) with Savills Head of Rural Research Emily Norton.

Agriculture reduces pollution incidents
Agriculture was the only sector to cause fewer pollution incidents in 2018/2019 than in 2017/2018, with a 6% decrease. At 59, the total number of incidents was also lower than any other sector. Dairy and livestock farming caused the most incidents (31), followed by intensive farming (22), arable and horticulture (5). The dry weather in 2018 is believed to have played a part, because farmers were able to enter the winter with empty slurry stores. There were no incidents as a result of full slurry stores, though one involved a leak from a new slurry store. The majority of incidents related to dirty water systems. 

RPA overpaid 1,000 farmers
Around 1,000 farmers have been overpaid by the Rural Payments Agency (RPA). In total £5 million has been paid out due to a system error making unintended agri-environment agreement payments. The Agency is now in the process of contacting affected farmers and plans to recover the money by reducing their future support payments.

Floating farm produces milk
The world’s first floating dairy farm is now producing more than 600 litres of milk a day. Located in the port of Rotterdam, it is home to a herd of 32 Meuse Rhine Issel cows which are milked robotically and have free access to a neighbouring field using a gangplank. They are fed a mixture of spent grains from nearby breweries and cut grass from golf courses and parkland. On a lower tier of the floating farm, milk is processed into bottles and yogurt is manufactured. Whilst rain is collected from the roof to provide a fresh water supply. Slurry and urine is reduced to dry fertiliser, minerals and clean water; the water drains into the river.

POLICY

No-deal predictions shake industry
According to research for the BBC by the Andersons Centre, a no-deal Brexit would reduce total income from farming by 18%, a loss of some £850 million. Even with a deal, a 3% reduction in profitability is forecast compared to the 2016-2018 average. Sheep meat is predicted to be hit the hardest, facing losses of up to 31%. Cereals and beef outputs are also predicted to fall. Yet output values for horticulture, pigs and poultry are expected to increase, provided there is enough labour available for these sectors. The research also predicted that dairy would be badly affected, particularly in Northern Ireland

A separate report by former NFU chief economist, Séan Rickard warns that half of farms could go out of business by the mid-2020s due to a no-deal Brexit. This is because “the combination of the removal of support payments – only a proportion will be made up by enhanced environmental payments – and an adverse trading environment will render the majority of farm businesses unviable”. It was written for the newly formed Farmers for a People’s Vote group who publicised its launch by herding sheep down Whitehall. In response Defra said that it “does not recognise any of the figures” and described them as “entirely speculative”. It reemphasised that “in the unlikely instance further support is needed, it has been clear that the Government will not hesitate to intervene to provide direct support for some sectors”.

The CLA and TFA addressed a letter to the Prime Minister Boris Johnson and Michael Gove who is leading preparations for a no-deal Brexit. In it, the organisations welcomed “the Government’s recognition that the domestic agricultural sector will need support” if no agreement is struck. They also emphasise that “leaving the European Union with a deal would be the best outcome”. They outlined three policies which they believed would be required as a minimum to mitigate the impact of a no-deal exit:

•Maintaining and developing market access

•Responding swiftly to market disturbance

•Enabling longer term profitability in a no-deal context.

Preparing Wales for Brexit
The Welsh Government is running a survey to find out how it can best prepare Welsh businesses for the UK’s planned exit from the European Union on 31 October 2019.

British standards going unchecked
New analysis shows that staff cuts due to austerity have reduced the volume of inspections and prosecutions made by public bodies. Food product sampling and testing by local authorities fell by 44% between 2009/10 and 2016/17 whilst air pollution checks fell by 37% and the number of frontline health and safety inspectors reduced by 27%. Prosecutions by the Environment Agency have also fallen by 80% over the same period, this is despite serious pollution incidents being a weekly occurrence. The analysis comes from Unchecked.uk, a new campaign led by the Ecology Trust which brings together twenty organisations. Emma Rose, founder of the campaign, said it was launched “to show that vital protections can no longer be taken for granted”.

Labour party calls for grouse shooting review
The Labour party called for a review of grouse shooting as the season opened on the Glorious Twelfth. The review, Labour says, would consider alternatives such as simulated shooting and wildlife tourism. Labour claims driven grouse shooting causes “substantial environmental damage”, due to draining, drying and burning the land to prepare it for shooting. The party argues this exacerbates climate change by reducing the capacity of the land to absorb carbon, while also affecting wildlife. A demand for a review has been included in the party’s Animal Welfare Manifesto.  

ENVIRONMENT & NATURAL CAPITAL

Natural pesticide in development
The University of Sheffield and Syngenta are collaborating to develop a natural pesticide which does not harm pollinators. New control approaches are needed to enhance agricultural production and improve the sustainability of agriculture. This latest approach centres on the RNA molecule found within an insects cells, and its role in protein production. The biocontrol creates double stranded RNA which prevents the production of critical proteins in target pests, ultimately killing them. As this is a genetic approach to control, it can be highly selective and avoid harming other organisms. The researchers say producing the biocontrol in sufficient quantities will be a key challenge.

‘Toothless’ Environment Agency bares teeth
The Environment Agency (EA) has bitten back at an article in The Times in which the Agency was called “toothless”. The article accuses the EA of allowing farmers to pollute rivers by not enforcing new legislation which requires farmers to take measures to prevent manure, fertiliser and soil getting into watercourses. The Times also pointed out that the EA was being run on a tight budget and that “the agency only has the equivalent of eight full-time staff to inspect England’s 212,000 farms”.

Emma Howard Boyd, Chair of the EA, responded by saying “we can and do take enforcement action, up to and including prosecution, against those who cause serious pollution incidents”. Ms Howard Boyd acknowledged that the new legislation had not been enforced but said “we think that was the right approach” and added “all good regulators seek first to work with those they regulate through support and guidance, and only use enforcement when necessary”.

NFU calls for increased bioethanol use
The NFU has repeated its call for the proportion of bioethanol allowed within petrol to be increased so that farmers can increase their contribution towards the country’s net zero greenhouse gas ambition. Petrol currently contains 5% bioethanol but by introducing E10 which contains 10%, emissions would be reduced to the tune of removing 700,000 cars from the road. 95% of petrol cars on the road are warrantied to run on the E10 fuel mix. By-products of UK E10 production can also replace imports of animal feed. The union believes a secure market for British wheat would mean farmers are less vulnerable to volatile commodity markets. The British wheat harvest can supply enough for both public consumption and the UK biofuel industry the NFU says. At present one of the UK’s bioethanol plants is closed and the other operates intermittently at a reduced capacity due to the lack of demand.

Water industry pursues net zero
The UK’s nine major water companies have committed to plant 11 million trees across 6,000 hectares in England by 2030 as they aim to be carbon neutral by 2030. They will also restore existing woodland and improve habitats which store carbon such as wetlands. The trees will be planted on land owned by the water companies, local authorities, the National Trust, Wildlife Trusts and the RSPB. The Woodland Trust has agreed to help identify sites and manage the planting programme.

White-tailed eagles return
White-tailed eagles (sea eagles) will return to southern Britain after being hunted to extinction by the start of the 20th Century. The species was reintroduced into Scotland in the 1970's where there are now 130 breeding pairs. They are estimated to contribute £5 million a year to the local economy. Six eaglets will be taken from Scotland under special licence and released on the Isle of Wight with hopes of mirroring the success of the reintroduction scheme in Scotland. Over the five-year reintroduction programme, up to 60 eagles will be released in the south. The birds will be fitted with satellite tags and are expected to disperse across southern England and go on to breed in the wild.

Hedgerow survey launched
Farmers who take part in the Great British Hedgerow Survey will be rewarded with instant feedback on the health of their hedges and tailored management advice to improve them. The survey by the People’s Trust for Endangered Species is open to all landowners and farmers. The results will help build a picture of the health of Britain’s 475,000km of hedges.

PROPERTY & DEVELOPMENT

Developer guilty over redwood felling
A developer, his business and an arboriculture contractor have been found guilty of breaching a Tree Preservation Order in Swansea. The trees illegally felled included a 200 year old giant Redwood tree, they had been protected when planning permission for the development was granted. The developer maintains that the fellings were not intentional and were due to a communications failure; sentencing is expected in late September. 

BUSINESS & ECONOMY

UK must accept US standards for deal
US food standards must be accepted as part of any trade deal with the UK according to Zippy Duvall, the head of the American Farm Bureau. Mr Duvall said US farmers were keen to trade with their British “friends” and fears over practices such as chlorine washing and GM crops were not “science-based”. John Bolton, Donald Trump’s national security advisor, said the US could strike trade deals with the UK on a “sector-by-sector basis” to speed up the process. However when asked if he could foresee a deal that did not include agriculture, Farm lobby head Mr Duvall said it would be seen as a betrayal by US farmers.

Minette Batters, NFU president, simply asked “are we going to hold our nerve or are we going to be sacrificed?” She was concerned that, although farmers would like to see EU standards enshrined in UK law after Brexit, such an approach had “not been agreed” by the Government. She said “there is a huge difference in opinion in what’s needed in a US-UK trade deal” and requested “assurance from the prime minister”. 

Trade and the environment
The International Trade Committee has launched an inquiry into the relationship between trade and the environment. The committee believes trade can have both positive and negative impacts on the environment and will explore how the Government can support positive environmental outcomes through trade policy. Submissions are being invited until 1 October 2019. This is a key question for the agricultural industry because at present the environmental impact of imported goods is not widely considered. For example if the UK’s journey towards net zero carbon emissions leads to an increase in production costs it would be a perverse outcome if the higher cost of production in the UK led to increased imports of food with a larger carbon footprint. 

OTHER RURAL NEWS

And finally…
Loch Ness Monster theory is plausible
Scientists say they have identified a plausible theory to explain sightings of the legendary Loch Ness Monster. The international team took 250 water samples at various depths throughout the loch and analysed the DNA within them. Some 500 million DNA sequences were compared to existing databases. New Zealand's University of Otago has led the work and will unveil the results next month at an event by the loch.