Over a year since the agricultural transition plan for England was set out, Defra’s latest survey shows that almost four in 10 farmers still do not understand its vision for the future of farming. With wheat prices elevated and currently at historic highs due to the tragic events in Ukraine, the challenge of securing participation in the Environmental Land Management schemes becomes even greater, yet these schemes are an integral part of the net zero strategy.

It is understood that Michael Gove is going to scrap plans for a standalone planning bill in England and the growth zone concept which it was due to contain. This would have given outline planning permission to zoned areas but attracted criticism for reducing scrutiny and public involvement in the planning process.

FOOD & FARMING

Ukraine invasion affects wheat prices
Shockwaves from the war in Ukraine are reverberating around the world, not least through the global supply of wheat and oilseeds. Russia and Ukraine are two of the world’s key producers of wheat, together accounting for close to a third of total global exports. Market prices have spiked just days into the conflict, with UK wheat futures for the May 2022 contract already hitting historical highs (in excess of £265 per tonne) and seem set to continue to rise at the time of writing.

The reasons for disruption are twofold. Firstly, Ukrainian ports are currently closed and Ukraine’s Maritime Administration said they will remain closed until the Russian invasion ends. Ukraine had already exported 18.5 million tonnes of wheat this season, however there are now questions around the additional five million tonnes that were expected to be exported. Secondly, the raft of sanctions imposed upon Russia, as well as the dumping of Russian assets, will hamper Russia’s ability to do business and export produce. In particular, its exclusion from the SWIFT banking platform will curb its ability to conduct international financial transactions and force importers, exporters and banks to find new ways to transmit payment instructions.

In the short term, nations in the Middle East and North African region look to be the most significantly affected, being the most heavily reliant on imports. The major global wheat importers are increasing their moisture level requirement for one year, to April 2023. This is from 13.0% to 13.5% and looks to reduce reliance on specific origins. Egypt’s state buyer, GASC, cancelled a tender on Thursday due to a lack of offers. GASC usually buys heavily from the Black Sea.

If the conflict continues, those shockwaves are likely to be felt into 2022/23, with spring planting of wheat in Russia and maize planting in Ukraine due to begin in April. Prior to the invasion, the Ukrainian State Statistics Service’s winter wheat plantings forecast was already down 5.3% on the year. Historically, these predictions are revised upwards, but this now seems unlikely. In anticipation of continued disruption, prices for the UK November 2022 contract have also gained and were trading as high as £238 per tonne at the start of March. Already minimal stocks in wheat exporting countries renders the long-term outlook even more uncertain.

Animal Health and Welfare Pathway
Environment Secretary George Eustice used his speech at the National Farmers Union conference to outline his vision for internationally competitive livestock sectors. The government will support the sectors in tackling key health and welfare challenges, which will in turn improve their performance. The Animal Health and Welfare Pathway will offer farmers funding for:

• An Annual Health and Welfare Review with their chosen vet

• Animal Health and Welfare Grants for investments in equipment, technology and infrastructure

• Disease eradication and control programmes

• Payment by results for ongoing costs.

The exact details of the pathway are still yet to be defined. Consultations have been opened for each sector to seek suggestions for items that could be supported via capital grants to improve health and welfare. Annual health and welfare reviews as well as welfare grants are expected to be launched this year.

More farmers don’t understand Defra’s vision
Almost four in 10 farmers do not understand Defra’s vision for the future of farming according to its latest Farmer Opinion Tracker survey. This is an increase from a third in the survey undertaken two years previously in September 2019. Only 7% of the farmers surveyed said they fully understood Defra’s vision. Perhaps more significantly over two-thirds (68%) of farmers are “not at all confident” that changes to schemes and regulations will lead to a successful future in farming.

This uncertainty is compounded by the problem of farmers’ dependency on government schemes: most farmers believe that Defra paying for environmental outcomes will be very (67%) or moderately (18%) important to their business in the future. Farmers on 64% of holdings believe they will need to make changes to their business in the next 3-5 years. This is an increase from 54% in October 2020. In the majority of cases these farmers are planning to diversify their business outside agriculture. Nearly a third (32%) will stay farming but increase productivity and farmers on 30% of holdings will stay farming and grow their business.

POLICY

National Test Programme to begin transforming agriculture in Scotland
The Scottish government has released information and timelines for its future vision for Scottish agriculture. It intends to support farming and food production in Scotland, in order to enable the country to become a global leader in sustainable and regenerative agriculture. The vision for Scottish agriculture was announced in 2021, and through the Agriculture Reform Implementation Oversight Board and stakeholder co-development, the Scottish government is now creating its new agricultural legislation and framework, which should be in place by 2026. Consultation on a new Agricultural Bill will start in summer 2022.

As part of its policy design process, the Scottish government has announced a National Test Programme for spring 2022, which will address two themes. Firstly, it will encourage farmers to improve their knowledge of current environmental performance and efficiency. Support will incentivise businesses to adopt measures that will create a baseline of information and understanding in sustainable agriculture. Secondly, it will design, and test the tools, support and process necessary to reward rural land managers for climate and biodiversity outcomes. This will create an understanding of how new conditions could be applied to future support and ensure delivery of environmental outcomes in a way that supports sustainable businesses. The test programme will begin in 2022, with the aim that the new measures will eventually become a requirement for accessing support. Increasing the conditionality of rural payments is a key mechanism the Scottish government is intending to use to ensure Scotland becomes the global leader in sustainable farming.

Improving farming regulation
Around 150 pieces of legislation currently form the ‘regulatory baseline for agriculture’. At the moment, farmers who receive direct payments must meet cross compliance standards in order to receive those payments. Though payments will be delinked in 2024, rules that form the regulatory baseline will continue to apply as most are already part of UK domestic law. Understandably, the legislation is not easy to understand or navigate, so from 2024 an improved regulatory baseline will replace cross compliance. It is intended that this will be evidence based, simplified, proportionate and take a supporting and enabling approach. Areas which are most important to meet environmental commitments and deliver the goals of the animal health and welfare will be prioritised.

Changes to pig slaughter scheme
The government's Slaughter Incentive Payment Scheme (SIPS) has been changed. There is no longer a requirement for pig meat from pigs slaughtered during a SIPS 2022 shift to be exported or go into the private storage aid scheme. The change means pig meat can now be sold on the domestic market at higher prices and that the payment rate for eligible pigs has increased from £3 to £10 per pig. Pig producers have welcomed the changes as a 'much-needed boost' for the troubled sector, which has had to endure the impact of the pandemic, difficult access to CO2 supplies, a shortage of labour and the loss of access to the Chinese market. This has led to a growing number of pigs backing up on farm, impacting the capacity of processors to slaughter and process pigs. Rob Mutimer, chairman of the National Pig Association, said the changes “should encourage processors to put on these extra kills and, in turn, speed up progress in reducing the backlog”. It is anticipated the scheme will close on 31 March, or earlier if the limit of 100,000 pigs slaughtered is reached.

ENVIRONMENT & NATURAL CAPITAL

Calls for improved access to natural spaces
More than 60 organisations have called for improved access to natural spaces to be included as part of the Levelling Up agenda. Organisations including Friends of the Earth, Greenpeace, WWF UK and the Wildlife Trusts have formed the “Nature for Everyone” campaign and petitioned the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, for three important steps to level up access to nature:

• Make equitable access to a high-quality natural environment a key measure of success

• Establish a legal duty in forthcoming planning legislation to ensure equitable access to wildlife-rich green and blue spaces

• Fund improvements in access to nature, including extending the Levelling Up Fund, Department for Levelling Up, Housing & Communities place-based funds, and national infrastructure investment funds to green infrastructure projects.

The coalition argues that increasing access to nature would offer increased physical and mental health benefits, including £200 billion in NHS savings, while creating 40,000 jobs and access to nature-rich spaces for 3,500 deprived communities. As well as aiding citizens, the organisations say the commitment would help meet government targets to protect 30% of land for nature by 2030 and halt the decline in species by 2030.

The Levelling Up White Paper was published in early February but was quickly criticised for a lack of focus on nature and climate. The paper was headlined by commitments to close economic discrepancies between and within regions, with a focus on educational discrepancies and differences in healthcare and crime rates, as well as access to things like high-speed internet and quality housing.

Private money is not tainted
The author of a major review into how England's national landscapes are run has said he is not "scared" by significant private sector investment to help fund their management. Julian Glover’s 2019 Landscapes Review led to the launch of a consultation on proposals to reform how England’s National Parks and Areas of Outstanding Natural Beauty (AONBs) are managed. One of those proposals was to harness more commercial opportunities. In response, Mr Glover has said “I don't believe that the state holds a guard on morality, I think that good institutions can exist, partly supported by the state, almost outside the state too, and do some of the best things in our country”. He added “I don't think we should treat private money as somehow tainted or secondary”.

Green Heat Network Fund opens
Homes and businesses in England can apply for a share of £288 million to support projects with a low carbon heat source. The Green Heat Network Fund will be open for the next three years and support technologies such as heat pumps, solar power and geothermal energy as a central heating source. In rural, off-gas-grid areas, at least 100 dwellings must be connected to the central source to qualify for funding. The Green Heat Network Fund (GHNF) is the successor scheme to the government’s Heat Networks Investment Project (HNIP) which has funded more than 20 heat network projects, including a community-led project in Cambridgeshire, which could be a model for other rural communities. Up to 300 properties could give up their oil boilers and be connected to a heat network created by the Swaffham Prior Heat Network project which was awarded £3.2 million by the NHIP. Applications for the GHNF will open on 14 March.

PROPERTY & DEVELOPMENT 

Planning Bill scrapped
Michael Gove has reportedly told backbench Conservative MPs that the government has scrapped plans for a standalone planning bill in England. Instead, he intends to “tidy up the planning system” via levelling up legislation. The original planning white paper met with strong opposition from some planning campaigners and Conservative backbenchers over its proposal for 'growth' areas; areas where the adoption of a local plan would confer outline planning permission. Backbenchers argued the proposals would mean less elected councillor scrutiny over individual planning applications and less public involvement in the planning process. It is now believed the growth zone concept has been scrapped.

Mr Gove apparently told 45 Conservative MPs at a private meeting last week "that he had decided not to proceed with a major separate piece of planning legislation to put the reforms into law. Instead, more limited changes to planning rules will be incorporated as part of a Levelling Up and Regeneration Bill, which will be set out in the Queen's Speech in the spring”. Mr Gove also indicated that “some of the most radical proposals that were in the white paper will now no longer find their way into the Bill”. According to one MP present, “we still need assurances that other problematic elements of those proposals will be scrapped too. And we need changes to the current system of housing targets which are creating intolerable pressure for over-development”.

Business & Economy

Developing slurry grants
While the nutrient value of slurry is well known, financial barriers and complex regulations often prevent farmers from utilising it to its full potential. Slurry grants are currently being developed to remove the financial barriers in England and are expected to be announced later in the year. The government is changing its approach to funding these projects: there will no longer be a dedicated slurry investment scheme, instead a new slurry infrastructure theme will be offered under the Farming Investment Fund from Autumn 2022. 

Some funding is already available for slurry management, such as through the Farming Equipment and Technology Fund and a new offer for slurry acidification projects, under the Improving Farm Productivity strand of the Farming Transformation Fund. The government accepts there were gaps in its offer, which the new scheme intends to rectify, including significant grant contributions towards covered slurry store construction projects, to enable farmers to achieve six months storage capacity. All livestock farmers in England with an existing slurry store are likely to be eligible to apply and applications will be opened annually. In the event of excess applications in the first round, the projects which deliver the most for the environment are likely to be prioritised.

Grants issued for farming tech
Farmers have recently been told the outcome of their grant applications for the Farming Equipment and Technology Fund (FETF). Defra received 5,624 applications for round one of the new fund, worth a total of £53.5 million, which was three times the budget available. In response to the high interest, the government has decided to increase the budget available. As a result, 4,376 applications (78%) have been awarded grant funding agreements, totalling over £48.5 million. Farmers have until 31 October 2022 to buy and install the relevant items and submit their claim for payment.

The FETF provides investment towards specific items of equipment which will improve productivity and efficiency for farming, horticultural and forestry businesses. It offers grants between £2,000 and £25,000. A second round is expected later this year. Unsuccessful applicants may apply again. If you would like to discuss grant funding opportunities, please contact Georgina Sweeting.

OTHER RURAL NEWS

And finally…
Asparagus arrives early
British asparagus will arrive on supermarket shelves eight weeks earlier than the traditional start of the season on 23 April. At this time of year, asparagus is usually imported from Peru and Mexico, which are among the world’s biggest exporters of the crop. An unusually mild winter is partly responsible for the early arrival, however the use of coir, a coconut fibre which warms up more quickly than soil, polytunnels, and early varieties will reduce the need to fly the crop in from overseas. Asparagus can grow up to 10cm a day with the right conditions, but consumers will still have to wait until April before British supply becomes widespread.