The Savills Portfolio

Landscope

4 November 2020

To address concerns that UK agriculture could be undermined by future free trade deals the government has conceded to pressure and given the Trade and Agriculture Commission a permanent role in the scrutiny process of proposed trade deals. 

This means farmers will gain a stronger voice in UK trade policy and should clear the path for the Agriculture Bill to become law. Defra has also elaborated on its plans for the Nature Recovery Network which will bringing together partners, legislation and funding, to help restore and enhance the natural environment. The network is likely to be a focus for environmental investment and could help link landowners with private sector partners that wish to fund habitat restoration activities. Scotland’s ambitious plans for high-speed rural broadband have received a welcome boost with confirmation that businesses and homeowners can claim funding from both the UK and Scottish government voucher schemes.

FOOD & FARMING

Time to Plan Campaign
The Farming Community Network (FCN) has found that some of the most common issues presenting to its helpline are farmers struggling with their mental health. Cases of stress, anxiety and depression are often associated with a lack of medium and long-term planning for the future of farming businesses. The FCN has therefore launched a new project in England and Wales in order to help farmers plan for the future.

FCN’s Time To Plan project aims to raise awareness about the importance of forward planning and encourages farmers to prepare for change from both personal and business perspectives. As part of the project, FCN will be running an awareness campaign from October 2020 to March 2021. Each month, content will be created in partnership with other organisations focusing on different themes, including managing through change successfully, planning for the unexpected, diversification, the new post-Brexit support regime, succession planning and retirement, and wellbeing and safety. In the longer term, FCN will be developing a ‘Planning Toolkit’ to help farming families take positive steps to prepare for the future.

New identity protections for British food and drink
The government has set out new rules and logos to guarantee the authenticity and origin of British produce. Products such as Stilton cheese, Scotch whisky, Welsh lamb and Melton Mowbray pork pies will carry new logos in order to protect regional and traditional foods, and help shoppers buy in confidence. The new Geographical Indications (GI) schemes will replace the current EU schemes on 1 January 2021. Registered producers of British food, drink and agricultural GI products that are required to use the logos will have until 1 January 2024 to update their packaging. GIs are highly valued products, representing around a quarter of UK food and drink exports by value, which equated to approximately £6 billion in 2019.

The UK government is also working to expand the number of GI protections through future Free Trade Agreements. The UK-Japan Comprehensive Economic Partnership Agreement will offer new protection for more UK goods, increasing GIs from seven under the terms of the EU-Japan deal to potentially over 70 under the new agreement, which would lead to improved recognition of key UK brands in the Japanese market.

Scotland: Suckler Beef Climate Group final report
The Suckler Beef Climate Group released its final report on the emissions of suckler beef systems. Key findings include that suckler beef systems are responsible for more than a third of Scottish agricultural emissions. 75% of these emissions come from methane from livestock, 12% from the anaerobic decomposition of manure and 14% from nitrous oxide associated with nutrient management. Carbon dioxide emissions are less relevant in suckler beef systems, and largely depend on the machinery used on farm.

The report suggests that in order to effectively reduce greenhouse gas emissions from suckler beef systems, mitigation actions should focus on enteric fermentation and manure management, along with soil and nutrient management. The greatest gains can be made by focusing on breeding females. Breeding cows and heifers within the Scottish suckler beef herd contribute more than half of the total emissions associated with the beef sector, therefore this is where efficiency gains will have the biggest impact on reducing sector emissions. Possible actions include targeted genetic selection and lowering the number of unproductive replacement heifers.

Welsh soil under threat?
The Welsh government has released a 2019 report into Welsh soil policy. It concludes that most soils in Wales are at a low risk of degradation under current agricultural management because the dominant land use is permanent grassland that has not been ploughed for over five years. The main threat to grassland soil under the current land use is soil compaction as a result of heavy machinery and intensively managed grazing livestock.

However, there are risks to Welsh grassland soils. Land use change combined with climate change pose a risk due to their associated changes in soil moisture regimes. Climate change could increase the risks from soil erosion, soil compaction and the soil organic matter loss. The report also identified that there are a number of challenges associated with regulating soil, specifically the establishment of baselines and target values for soil properties. As highlighted in this blog, these are key issues to resolve in order to be able to move forwards with many of the potential revenue earning outcomes linked to soil health. The report concludes that policies to enhance soil organic matter content should aid climate change mitigation and increase the sustainability of agricultural systems.

 

Covid-19

Young Londoners yearn for the countryside
A survey, commissioned by the CLA, found that 55% of 18-34 year olds are more likely to move to the countryside as a result of Covid-19. The survey questioned more than 1,000 Londoners of different ages. Cheaper housing was a key pull factor for those debating whether to move out of the city; other pull factors included better air quality, being closer to family, community, and the availability of outdoor space.

Of those polled across all demographics, the Covid-19 pandemic has made 44% of people more likely to consider moving to the countryside, versus only 9% saying the contrary. Over a quarter said they envisaged working entirely from home in the future.

The CLA calculates that the rural economy is 16% less productive than the national average. 25% of the rural population are aged 65 and above, compared with 17% of the urban population. An influx of younger people to the countryside may reverse the ‘brain drain’ of the aging rural population and stimulate new growth, helping to close this rural urban productivity gap. The CLA argues that for the rural economy to capitalise on this trend, the government will need to invest in the countryside’s infrastructure, with broadband and affordable housing being two of the key requirements, as set out in the CLA’s Rural Powerhouse Campaign.

Furlough scheme extended in England
In order to support businesses across England during the second lockdown, the Chancellor has announced that the furlough scheme will be extended and remain open until December. This will protect jobs by ensuring that employees receive 80% of their current salary for hours not worked, up to a maximum of £2,500. Under the extended scheme, the cost for employers of retaining workers will be reduced compared to the current scheme. Business premises forced to close in England are to receive grants worth up to £3,000 per month under the Local Restrictions Support Grant. Also £1.1bn is being given to local authorities, distributed on the basis of £20 per head, for one-off payments to enable them to support businesses more broadly. More information on the support is available here.

Scotland: Additional business support
Scotland’s First Minister has announced additional funding for businesses affected by the temporary Covid-19 restrictions. The Covid-19 Restrictions Fund will now provide one-off grants of up to £4,310 to businesses required to close by regulations. For businesses that may remain open but are directly impacted by the restrictions, the maximum hardship fund grant will increase to £2,155. Additionally to help firms meet the 20% employer’s contribution that they are required to pay under the current UK government furlough scheme, grants of £1,650 will be available to firms that are required to close. These one-off grants are for the period until 2 November and will be replaced by a new system of business support designed to suit the five level approach that Scotland has now adopted.

 

POLICY

Farmers gain a stronger voice in UK trade policy
Government has announced that the Trade and Agriculture Commission (TAC) is going to be extended and placed on a full statutory footing, giving farmers a stronger voice in UK trade policy. For all future free trade deals the TAC will be asked to produce a report on the impact of the deal on animal welfare and agriculture. Its report will be laid before Parliament before the start of each deal’s 21 day scrutiny period. In the meantime, the TAC is continuing with its existing work and will publish an interim report shortly and a final report in February 2021. This will cover the trade policies that the government should adopt to secure opportunities for UK farmers, to ensure that animal welfare, food production and environmental standards are not undermined, and to identify new export opportunities.

Putting the TAC on a statutory footing is the government’s concession to pressure from the public, industry stakeholders and House of Lords, and is intended to move the Agriculture Bill out of the ‘ping pong’ stage of debate. Following the rejection of its previous amendments, the Lords has voted to add two alternative clauses linked to food standards and trade standards; these differ from the original clause added for import standards, instead focusing on the concept of equivalence, but ultimately raise the same issue. These amendments are due to be considered in the House of Commons on 4 November, where the government plans to use its majority to reject them and to confirm its proposal to put the TAC on a statutory footing instead.

Scotland: The future of farming policy
Scotland’s interim Agriculture Retained EU Law and Data Act ensures stability and security for Scotland’s farming sector, by allowing the Common Agricultural Policy derived schemes to continue in Scotland beyond 2020, as well as retaining the ability to make improvements to them following Brexit. However, the Act does not set out the future direction of post-CAP Scottish rural support policy, or completely reform existing policy. This work is instead being undertaken by the Farming and Food Production Future Policy Group (FFP-FPG).

In the latest update (October 2020) from the FFP-FPG, Fergus Ewing explained that as well as the Suckler Beef Climate Group, he intends to set up similar farmer-led expert groups to advise on policy development. These groups will focus on arable, dairy and hill farming. The Suckler Beef Climate Group reported back to the FFP-FPG that a future scheme must be flexible and able to deliver environmental outcomes that provide value for money to the farmer and taxpayer, benefitting the local economy and incentivising upskilling. Mr Ewing noted that Covid-19 has impacted Scottish business, in particular exports, but support for local produce has increased too. A food and drink recovery plan is proposed, in order to develop actions to safeguard jobs within the rural sector in Scotland. For a full update on Scottish rural policy see our guidance note.

UK and Japan sign free trade agreement
The UK has signed an economic partnership agreement with Japan, which is the UK’s first major trade deal as an independent trading nation. The deal is specific to both economies and goes beyond the existing EU deal, with benefits for digital and data, financial services, food and drink and creative industries. It is expected to boost trade between the UK and Japan by over £15 billion. The deal is seen as an important step towards joining the Comprehensive Trans-Pacific Partnership, one of the world’s biggest free trade areas, covering 13% of the global economy. It remains the government’s ambition to secure free trade agreements with countries covering 80% of UK trade by 2022.

 

ENVIRONMENT & NATURAL CAPITAL

What is the Nature Recovery Network?
Defra and Natural England are bringing together partners, legislation and funding to create the Nature Recovery Network (NRN), and meet a commitment within the government’s 25 Year Environment Plan. The three core aims of the NRN are to combat biodiversity loss, climate change and increase society’s wellbeing. This will be done through enhancing sites designated for nature conservation, creating new wildlife-rich habitats, improving the resilience of landscapes to climate change through nature-based solutions such as carbon sequestration and flood risk management, and connecting more people with nature.

It is intended that through the NRN, by 2042 75% of protected sites on land will be restored to favourable condition, and that 500,000 hectares of additional wildlife-rich habitat will be created or restored outside of protected sites. The Environment Bill will underpin the NRN and introduce Local Nature Recovery Strategies which will be pivotal in setting up the NRN. Maps and data will be used to prioritise areas for nature restoration and work will be undertaken through partnerships, involving government, land managers, businesses, communities and NGOs. The NRN Delivery Partnership (overseen by Natural England, Defra, the Environment Agency and Forestry Commission) has been set up by the government to support partnership working. Natural England will encourage partners to pledge support in various way - providing land for nature recovery, financial investment or advice and time. Those interested in becoming a partner should contact Natural England’s Partnership delivery team.

The £25 million Nature Recovery Fund, alongside the £640 million Nature for Climate Fund will support the development of the NRN. £40 million has been allocated to be spent now from the Green Recovery Challenge Fund, as part of the Green Recovery from Covid-19. The NRN objectives will also be achieved through ELM and Countryside Stewardship.

Environment Bill update
The Environment Bill has made limited progress since first entering parliament over a year ago and triggering widespread discussion about the opportunity that mandatory biodiversity net gain presents for the rural sector. It is now moving forward; Committee Stage debates started in the House of Commons on 3 November and will conclude by 1 December 2020. The government has tabled amendments to the Bill to enable Species Conservation Strategies and Protected Site Strategies. Under these strategies broader scale approaches to the protection of species and designated sites will become possible so that delays to development are reduced. For further information see our Environment Bill briefing note.

The Big Climate Fightback
The Woodland Trust has launched ‘The Big Climate Fightback’ in which it is asking the public to join its ‘climate change army’ and plant trees. The campaign is aiming to plant 50 million trees over the next five years in order to help hit the government’s 2050 net zero emissions target.

Review of gamebird releases near protected sites
The Secretary of State has decided to put in place an interim licensing regime for 2021 releases of common pheasant and red legged partridge within European protected sites and a 500m buffer zone around the sites. The interim licensing regime will be accompanied by additional measures aimed at improving the evidence base about the impact of the release of these species on individual European protected sites. This will include improving the Animal Plant and Health Agency poultry register, Natural England prioritising the review of gamebird related consents, and measures to enhance its monitoring of protected sites. Defra admits that introducing the new licensing regime in time for 2021 releases will be challenging but it believes it will be possible. The promised early consultation will be crucial for shoots as their chick or poult orders are placed much earlier in the year. It is estimated that 25% of keepers could be affected. Click here for further information.

 

PROPERTY & DEVELOPMENT

Broadband boost for Scotland
A new collaboration between the Scottish and UK governments will see voucher funding joined up, which will make more funding available to subsidise the costs of building gigabit-capable broadband networks in hard-to-reach areas of Scotland. The voucher schemes target areas where the cost of building new broadband infrastructure is not commercially viable. Combining the UK voucher scheme with the Scottish voucher scheme expands the funding available for broadband installation to £8,500 for SMEs and up to £6,500 for homes. This investment will make rural places more attractive for flexible working and make digital living easier. Ministers are now urging businesses and communities to apply to future-proof their internet connections and maximise the opportunities that technological advances bring.

 

OTHER RURAL NEWS

And finally…
Beavers return to Cumbria after 400 years
The release of a male and female beaver onto a private estate in Cumbria marks the return of the species to the area for the first time in 400 years. The Cumbria Beaver Group has released the two adult beavers into a 27 acre enclosure at Lowther Estate near Penrith, for a five-year scientific trial. The trial will monitor the beavers and gather data on their impact in an upland environment, specifically on a stream in a farmed landscape.