On its own this will not be sufficient to fund a retirement, but Defra hopes that combining it with income from dispersal sales, pensions and tenancy surrender payments, it could help farmers retire and in turn open up opportunities for new entrants. It is likely to appeal most to Agricultural Holdings Act tenants, which could release ideal units for new entrants although housing is potentially a key issue for both outgoing and incoming tenants.

Defra has also published its plans for peatlands and trees which will steer significant peatland restoration and afforestation activity under schemes such as Environmental Land Management to achieve national emissions reductions targets. In Scotland a cabinet shakeup following the return of the SNP to Holyrood has seen new ministerial roles created with a clear focus on delivering the Scottish government’s net zero ambitions.

FOOD & FARMING

2,000 sign up to help pilot the Sustainable Farming Incentive
Over 2,000 farmers representing a diverse range of farm types and regions are interested in helping to pilot the Sustainable Farming Incentive (SFI) scheme. The SFI is the entry level scheme within Defra’s Environmental Land Management (ELM) concept. It is the first of the three new environmental schemes to be piloted and co-designed. Those selected to take part in the pilot have now been contacted by Defra and will be asked to prepare applications ahead of the first pilot agreements going live in October 2021. Participants will take part in a range of activities and rapidly feedback on their experience of all aspects of the scheme.

Defra says that the scheme will be fully tested and user friendly ready for its launch in 2024. However, industry stakeholders are concerned that the SFI development is being rushed and that ambitions for the scheme appear to be reducing. At a recent Environment Food and Rural Affairs Committee evidence session, concerns were raised that farmers need to have more detail on the schemes sooner, and that the SFI may just be treated as a tick box exercise with limited ability to incentivise farmers to farm sustainably. The Tenant Farmers Association recently surveyed 200 tenant farmers and found their principal concern to be accessibility to the ELM scheme: over three quarters thought that the needs of the tenanted sector had not been fully considered within the scheme design; nearly a quarter thought it was likely their landlord would require them to join an ELM scheme, whilst 61% were considering their options independently and 5% said that neither they nor their landlord were interested in applying.

The Prince of Wales backs small-scale farming
The Prince of Wales has written an opinion piece for the Guardian newspaper advocating small-scale family farms as being pivotal to a sustainable farming future. In response to the policy shift that is facing the rural sector in the UK, and the transition to new devolved policy, Prince Charles is calling for the contribution of the small-scale family farmer to be properly recognised, as adaptable, resilient and hardworking. He is adamant that smaller farmers must not be forgotten in the transition to a sustainable future. In his piece, Prince Charles cited that more than 110,000 smaller family farms have already been lost since 1990.

In order to support small scale farms, Prince Charles believes family farmers must be supported to gain the tools and confidence to meet the rapid transition to regenerative farming systems. He suggests a cooperative framework to bring smaller farms together, referencing the success of European cooperatives and believes that the combination of better technology, more communication and growing consumer preferences for slower food” makes a powerful platform from which to promote a global cooperative of small-scale family farms committed to producing food based on the principles set out in his Terra Carta (a charter for nature, people and planet that focuses on producing healthy nutritious food that enhances nature and the wellbeing of rural communities and consumers). Within the context of Defra’s Lump Sum Exit Scheme and Australian trade deal talks, Prince Charles’ call to not forget about smaller, family farmers is timely.

New measures to eradicate bovine tuberculosis announced
Defra has announced new plans within its ambition to eradicate bovine tuberculosis in England by 2038. Within the strategy the key proposals include:

• Work on a badger vaccination, increased cattle testing and the development of a cattle vaccine to be accelerated

• Licensing of new intensive badger culls are set to end after 2022 following a significant reduction in the disease

• Existing cull licenses could be cut short after two years, down from five years, where supported by sufficient scientific evidence

• New schemes will be launched to roll out badger vaccination across the country.

As part of the government’s efforts to vaccinate more badgers it will invest in the training of vaccinators. A five-year badger vaccination programme in East Sussex has also been awarded £2.27 million to enable farmers to deploy vaccinations over an area of 250 square kilometres. The results of this trial will help develop plans for deploying future vaccination schemes at scale across England.

POLICY

Lump Sum Exit Scheme proposal released
On 19 May, Defra released its much-awaited proposals for the Lump Sum Exit Scheme, which will be offered as a one off opportunity to farmers in 2022. The scheme has been promoted by Defra as a way to address the ‘twin challenges’ of assisting farmers to retire, whilst also giving those who want to enter the industry access to land. In his announcement, Environment Secretary George Eustice explained “the amount of land we have is fixed. It is only by assisting people to exit the industry with dignity that we can help others fulfil their dream”.

The proposed lump sum payment will be 2.35x a reference amount (which is likely to be the average of a farmer’s 2018, 2019 and 2020 Basic Payment Scheme (BPS) claims). The claimant’s BPS entitlements would be cancelled (including those transferred by landlords) and owner occupiers would need to either rent out (five year FBT minimum), sell or transfer their land by gift. Tenants would need to surrender their tenancy (an AHA retirement succession would count as a ‘surrender’). For more detailed information and analysis of the proposals please see our briefing note. The consultation runs until 11 August 2021 and we are interested to know your thoughts on the proposed scheme via our 3 minute survey.

Defra launches Peat and Tree Action Plans
Defra has launched two new plans designed to help England reach several of its environmental objectives. The England Peat Action Plan is clear that significant changes to the management of peatland and increased restoration activity is required to reverse its decline and get peatland to make a significant contribution towards emissions reduction targets. In the lowlands, management will focus on retaining the soil for as long as possible if restoration is not appropriate. In the uplands, restoration and ongoing maintenance costs will be supported. Funding will come from a range of sources including the Nature for Climate Peatland Grant Scheme, ELM, Farming in Protected Landscapes Programme and private finance, for example from water companies. The voluntary Peatland Code will be improved and used to underpin the validation and verification of tradeable carbon credits. For more detailed information on the action plan see our briefing note.

The England Trees Action Plan provides a long-term vision for trees and woodlands in England. It brings together many of the commitments government has already made around tree planting and protection. It confirms the government’s ambition to triple the current tree planting rate in England, so that the UK hits its 30,000 hectares of woodland creation per year and that a new England Woodland Creation scheme will be launched soon. From 2024 the ELM Sustainable Farming Incentive, Local Nature Recovery and Landscape Recovery schemes will be the main mechanisms for publicly funded woodland creation. The plan endorses new concepts such as Woodland Creation Partnerships, which will be used to allow stakeholders to collaborate and to secure private finance, and it also proposes changes to planning protections and regulation around tree planting and felling. For more detailed information on the action plan see our briefing note. If you would like to discuss woodland creation please contact Andy Greathead.

ENVIRONMENT & NATURAL CAPITAL

Globally defining, legally-binding species target announced for England
The Environment Secretary, George Eustice, has outlined ambitious plans to protect and restore nature to combat the climate and biodiversity crises. Within his announcement, the headline action was the introduction of a new ‘world-leading’ legally-binding species target for 2030 which is intended to halt the decline of nature. This target has been touted as the net zero equivalent for biodiversity and will be added into the Environment Bill. The exact metrics and extent of the target will be decided upon after the Convention on Biological Diversity Conference of the Parties in October 2021.

To support the delivery of the target, Natural England will establish a species reintroductions task force. The taskforce will consider the reintroduction of declining and lost species to England, for example wildcat, pine marten, dormice and corncrakes. This action will be part of the Nature Recovery Network and will bring together experts, landowners and NGOs to develop project partnerships. These announcements signal a substantial step forward for England in its approach to tackling biodiversity loss, and it is unsurprising therefore that Defra is to increase Natural England’s budget by 47% this financial year, to £198 million. The budget marks a second consecutive annual boost in funds for Natural England, however these increases come after more than a decade of cuts. It is encouraging to see government putting its money where its mouth is and taking not just the climate, but also the biodiversity crisis, seriously.

Nature corridors in vogue
Within the England Trees Action Plan, an initiative called ‘Woodlands for Water’ has been proposed to incentivise the establishment of woodlands for the benefit of watercourses and nature recovery. There are 242,262 km of watercourses in England which form a natural corridor network across the country, providing an ideal framework for tree planting and nature restoration. The Telegraph has reported that landowners could be publicly funded to change riverbank management to help rewild beavers across Britain. It is described as a radical plan to prevent farmers from farming all the way to the river’s edge, to instead plant trees and let shrubs grow to form a nature recovery network of riverside woodlands that span the length of the country. A strategy of using waterways as nature corridors has also been followed in Scotland through the Scottish Wildlife Trust’s Riverwoods project. Nature corridors exemplify ‘bigger better and more joined up’ conservation and can generate multiple benefits and opportunities, however putting the concept into practice will require significant collaboration and coordination.

The National Trust forges ahead with environmental partnerships
Over the next four years, the National Trust will use a £4 million gift from HSBC UK to plant two million trees. This will create 2,000 hectares of woodland with the potential to sequester 1.25 million tonnes of carbon. The woodland creation will be focused near to urban areas so that they can provide recreational benefits to society too. The £4 million gift is the biggest environmental donation that the National Trust has ever received, and it is part of HSBC’s climate solutions partnership which aims to unlock barriers to finance and help scale up companies and projects that tackle climate change.

The National Trust has also partnered with the University of Exeter to conduct science-based research that will help inform land use decision making. The research will explore how both organisations can respond and adapt to environmental and cultural change, whilst also supporting wildlife and improving societal wellbeing. It will focus on how to reverse declines in nature and adapt to climate change, managing change in multifunctional landscapes and how to engage people in conservation.

Fourth Woodland Carbon Guarantee auction dates released
The fourth Woodland Carbon Guarantee auction will take place online between 26 July and 1 August and has £10 million of funding available. Farmers and land managers who want to put their woodland creation scheme into the auction are encouraged to apply for the scheme by 9 July. The Guarantee provides land managers with woodland creation projects the option to sell their captured carbon as Woodland Carbon Units (accredited under the Woodland Carbon Code) to the government for a guaranteed price every five or 10 years up until 2055/56. If the carbon price proves more attractive, successful bidders can sell their carbon to the private offsetting market at any point. There were 30 successful bidders in the third auction last November and these projects will create 615 hectares of new woodland. For more detail on the scheme see our briefing note. If you would like to discuss entering a project please contact Mike Chapman.

PROPERTY & DEVELOPMENT

New AHA suitability test and landlord’s consent process
Regulations have been laid before Parliament which will establish a new dispute resolution process relating to restrictive tenancy terms and also update suitability test criteria for successions under the Agricultural Holdings Act 1986 (AHA) in England. The new dispute resolution process applies to a tenant’s request for landlord’s consent to an activity that is restricted by the terms of their tenancy agreement, or to a variation of the terms so that the tenant can apply for new financial assistance schemes delivered under the Agriculture Act 2020 or meet a statutory obligation. It allows the tenant to refer their request to arbitration (or third party determination in some cases) if they are unable to secure their landlord’s consent or agreement to a variation in tenancy terms. The new process has prescribed notice conditions and response periods to which both parties must adhere and it comes into force on 21 June 2021. In determining an application the arbitrator (or third party) is instructed to have regard to all relevant matters which include the landlord’s reversionary interest in the holding and the settled objectives of the landlord and tenant. This appears to offer protection against land use change which affects the value of the property.

The regulations also set out the new criteria which the First-tier Tribunal (Property Chamber) Agricultural Land and Drainage Chamber must apply when determining whether an applicant is a suitable person to succeed to a AHA tenancy agreement following the death or retirement of the tenant. An update had been sought by the industry as it was felt that the existing criteria did not adequately test business management skills or reflect the environmental skills and care that modern agriculture requires. The introduction of the test is delayed until 1 September 2024 to give potential applicants the opportunity to develop the required skills and attributes. The regulations are available here.

Rural alternative asset market opportunities
Ultra-low interest rates as well as new macro trends such as sustainability and technology mean traditional approaches to investment may no longer be enough to achieve investment goals. Our latest Market in Minutes on Rural Alternative Assets sets out a high-level guide to four alternative, land-based asset classes; farmland, renewable energy, forestry and vertical farming. These alternative assets will, of course, diversify a portfolio, but could also enhance returns beyond what is currently offered by traditional investment strategies while helping to meet broader ESG objectives. For each, we have looked at reasons to invest, things to be aware of when investing and top tips to make the most of the opportunity.

Business & Economy

Australia trade talks spark concern
UK farmers and stakeholders within the rural industry are increasingly voicing concern over the government’s proposals for a free trade deal with Australia. The post Brexit trade deal between the UK and Australia will be one of the UK’s first moves as ‘Global Britain’, and it is reported that Trade Secretary Liz Truss is keen to secure a zero-tariff trade agreement with Australia before this month’s G7 summit in Cornwall. The NFU and Sustain have warned of the irreversible damage that a ‘bad deal’ could cause, with fears of the UK market being flooded with cheaper, less environmentally sustainable food that is produced to lower animal welfare standards. However, Ms Truss has once again promised that the government will protect British farmers from overseas importers using ‘unfair practices’ to undercut them in the domestic market. This trade deal is seen as a critical stepping stone to joining the Trans Pacific Partnership trade group and as the first agreement that the UK is negotiating completely independent of the EU, it is a key indicator of future trade deals and policy.

OTHER RURAL NEWS

Shake up in the Scottish cabinet
Following the Scottish election at the start of May and the return of the SNP to Holyrood, First Minister Nicola Sturgeon has made changes to her cabinet. Ms Sturgeon has removed the role of Cabinet Secretary for Environment, Climate Change and Land Reform, and has introduced new ministerial roles to cover net zero and a socially just transition from fossil fuels. Michael Matheson, MSP for Falkirk West has been handed the new title of Cabinet Secretary for Net Zero, Energy and Transport. Mairi McAllen has been appointed Minister for Environment, Biodiversity and Land Reform. She was previously a special advisor to the First Minister on environment, climate change, land reform and renewable energy policy. Richard Lochhead has been appointed as Minister for Just Transition, Employment and Fair Work.

Fergus Ewing has been replaced as Rural Economy Secretary by Mairi Gougeon who is the MSP for Angus North and Mearns. She served as junior Rural Affairs and Natural Environment Minister from mid-2018 to the end of last year, having entered the Scottish parliament in 2016. There has been criticism that there is no ‘minister for nature’ but it is clear that with COP26 on the horizon, Nicola Sturgeon is placing Scotland at the forefront of climate governance and action. This new collection of relatively fresh Ministers has no small task ahead of them in defining the future of Scotland’s rural sector over the next five years.

And finally…
A sticky situation
Eddie, a 28 year old grey horse was found wedged in an elderberry bush near Sudbury, Suffolk. Firefighters were called to help him escape, by cutting away branches and using specialist animal rescue equipment. The good news is Eddie remains unscathed by the experience.