The Savills Portfolio

Landscope

9 May 2019

Defra Secretary Michael Gove has taken over the responsibility for the issuing of general licences for pest bird control following the turmoil caused by the short notice withdrawal by Natural England. 

This is a further blow to the body, where concerns have been raised already about under-resourcing due to austerity cuts and the secondment of staff to other departments due to Brexit.

In the 2019 edition of Savills Impacts we look at how to feed the nine billion world population: what would the global impact be if China’s population adopted Western levels of protein consumption?

FOOD & FARMING

Savills Impacts: Feeding the nine billion
The 2019 edition of Impacts looks at the disruptive factors shaping the world. Savills Natural Forces focuses on how agriculture’s thirst for water and changing diets will affect production and consumption. A comparison of different protein sources showed insects had an environmental impact of only 0.3% of that of beef. Poultry came in at 19% so the trend of declining red meat and increasing white meat consumption in the West has reduced greenhouse-gas emissions by an amount equivalent to taking almost 600,000 passenger vehicles off the road. The environmental benefits of Western ‘flexitarianism’ may however be eclipsed according to Savills research; if the growing Chinese population adopt Western levels of protein consumption, it would be the equivalent of an extra 158 million cars on the road.

British wine is booming
British wine drinkers downed 6% more English and Welsh fizz than in 2017. Four million bottles were purchased from UK producers in 2018. That makes home-grown sparkling wine more popular than imports from Australia, the USA and Germany. Italian Prosecco was the runaway favourite with 117 million bottles sold. French Champagne was far behind in second place, selling 24 million bottles, closely followed by Spanish Cava which sold over 23 million bottles.

According to Savills research, the future looks good for the UK wine industry. Domestic production is projected to reach 8-10 million bottles per year within the next 10 years. It is expected this will be fuelled in part by exports increasing from 5% of production to 25% by 2025. Demand is currently exceeding supply and the area under vine has tripled since 2000 in an effort to catch up. With future success predicted but turbulent external conditions, growing grapes and producing wine is considered an attractive diversification idea for landowners looking to reduce their reliance on commodity markets and mitigate risk.

9,000 game birds released
Animal rights activists say they will “dismantle the shooting industry, farm by farm, shoot by shoot”. The Animal Liberation Front claimed it had released 9,000 pheasants from a hatchery in Suffolk as part of that campaign. It said “with game farms being targeted across the country, many shoots may well go out of business this year”. Police said fencing, netting and a water pipe were cut during the incident. Tim Bonner, chief executive of the Countryside Alliance said “many of [the pheasants] will die as a result of these thoughtless and ignorant acts” and demanded the attacks be “investigated and the perpetrators brought to justice”.

National Trust to create orchards
68 new orchards will be planted by the National Trust by 2025 to boost the number of wildlife-rich areas. Since 1950 around 60% of small traditional orchards in England have disappeared. The Trust presently cares for around 200. The initiative is part of a wider ambition to create 25,000 hectares of habitat, but orchards are being given particular importance. David Bullock, the head of species and habitat conservation at the charity, said orchards “can become a home for birds such as the lesser spotted woodpecker, bats and mistletoe moth”. He added “orchards are also vital for people…and are places of beauty”. 

POLICY

Gove takes control of general licences
The first of the new general licences for controlling birds to be published by Natural England allows control to prevent serious damage to livestock by carrion crows. Natural England’s interim chief executive Marian Spain said “this new licence should give peace of mind to landowners who need to shoot to control certain wildlife that they can do so within the law”. She added “this is not a ban on control, it is a change to the licences that allow control to take place”. Despite this the British Association for Shooting and Conservation (BACS) has said the new licence is “shoddy and hurried” and “not fit for purpose”. General licences allowing control of Canada geese to preserve public health and safety and wood pigeon for preventing serious damage to crops have since been published.

Due to the scale of interest and concern that has been generated by Natural England’s decision to revoke the general licences with just 36 hours’ notice, Defra Secretary Michael Gove has taken over the relevant licensing function from Natural England for the time being. A call for evidence has been launched and will run until 13 May; Defra would like views from concerned parties about the withdrawal and a clear understanding of the implications for the protection of wild birds, and the impacts on crops, livestock, wildlife, disease, human health and safety and wider nature conservation efforts. Following the call for evidence the Secretary of State intends to take a week to consider the evidence gathered and decide a course of action. A separate review of general licences will take place later in the year and there will be a further opportunity to submit evidence and views at that point.

Environmental body will leave regulation gap
The Office for Environmental Protection (OEP) needs greater independence and sharper teeth according to the Environment, Food and Rural Affairs (EFRA) Committee, which has now concluded its inquiry into the draft Environment (Principles and Governance) Bill. The Bill sets out how environmental standards will be maintained following Brexit. MPs have said there is potential for a “governance gap” and the Bill fails to “ensure the environment is even better protected in future”. Chair of the Committee Neil Parish MP said “to achieve real independence there needs to be a role for Parliament in all decisions relating to the membership of the OEP’s board”. He added the OEP being funded “at the whim of Defra” was unacceptable. Parish said “The Government must explore appropriate ways to ensure greater personal accountability for ministers and public servants if they fail to uphold environmental law”.

ENVIRONMENT & NATURAL CAPITAL

Agricultural emissions: The voluntary approach is not working
The UK is legally committed to reducing carbon emissions by 80% by 2050 due to the Paris Agreement. A new report by the Committee on Climate Change (CCC) suggests a new target of net-zero greenhouse gas emissions within the same timeframe. According to the CCC, this would only be possible with clear, stable and well-designed policies to reduce emissions further. The Committee has concluded that “the voluntary approach that has been pursued so far for agriculture is not delivering reductions in emissions”. It recommends that financial payments in the UK Agriculture Bill should be linked to actions to reduce and sequester emissions, to support the major transition in land use and farming practices required by a net-zero greenhouse gas emissions target. The CCC calculates that its plan would require under £2 billion annually for land and agriculture, compared to current Common Agricultural Policy expenditure of over £3 billion. Its plan involves using consumer-facing policies to support shifts to healthier diets with lower beef, lamb and dairy consumption. This in turn would allow increased forestry cover; it was critical of the current afforestation targets which on average are only delivering 50% of the Government’s target planting rate. To achieve net-zero emissions, forestry cover needs to increase from 13% to 17%, which will require 30,000 hectares of new woodland to be planted each year. Peatland restoration also plays a role; 55% will need to be restored, compared to 25% today. Its plan includes increased use of biomass as a fuel, combined with carbon capture and storage. To produce the fuel, up to 1 million hectares of energy crops will be required; this is around 7% of the UK's current agricultural land.

Climate emergency declared
Climate change has been placed firmly back on the agenda after spirited activism over recent weeks. Greta Thunberg rose to fame after instigating the “school strike for climate” movement and has now met with politicians to discuss climate change. She said politicians “don’t listen to science” and “carry on as if nothing has happened”. Defra Secretary Michael Gove said “the time to act is now, the challenge could not be clearer - Greta, you have been heard”.

Greta also spoke to the Extinction Rebellion that brought London to a standstill for nearly two weeks. Despite 1,130 arrests, protestors were able to park a pink boat at Oxford Circus and block several other key junctions around the city. Parliament has declared an “environment and climate emergency” after similar declarations by Welsh and Scottish lawmakers. This makes the UK the first country in the world to do so but there is no real sense of what this declaration means in reality.

A hectare of forest per farm
From 2021 EU nations will be able to reward farmers for afforesting one hectare of their farm. The ‘one hectare initiative’ was announced by EU Farm Commissioner Phil Hogan at the start of the “Our Forests, Our Future” conference in Brussels. The plots would help Member States to meet climate and biodiversity objectives and could be on marginal land or at field boundaries. “It is another practical example of farmers providing public goods with public support,” Hogan said.

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Scotland: Beavers protected
It is now illegal to kill beavers or destroy established dams and lodges without a licence in Scotland. Following reintroduction 10 years ago there are now around 450 beavers in Scotland. The Scottish Wildlife Trust chief executive Jo Pike said beavers were “unrivalled as ecosystem engineers” and the legislation is “an important milestone for the return of the species”. Farming figureheads are worried about the damage beavers can cause to agricultural land through dam-building. One farm manager said beaver activities can cost him up to £5,000 a year.

PROPERTY & DEVELOPMENT

Fracking regulations under fire
The Government’s shale-gas tsar has resigned after just six months. Natascha Engel complained the Government was not paying enough attention to businesses ready to invest and was more concerned about anti-fracking protestors. In her resignation letter she accuses the Government of “pandering to what we know to be myths and scare stories”. The Government said it was disappointed by her resignation but added “the regulations were developed on the advice of scientists and in consultation with industry”.

BUSINESS & ECONOMY

Mega-merger blocked by regulator
The Competition and Markets Authority has blocked the £12 billion merger of Sainsbury’s and Asda. If the merger had gone ahead, it would have created the UK’s biggest food retailer with more than 30% market share. It said the deal would lead to “a substantial lessening of competition” and increased prices for consumers. The £46 million cost of the bid went on to worsen Sainsbury’s net profit figures which fell from £309 million last year to £219 million.

Agri-food sector worth £122 billion
Agri-food contributed £122 billion to the national economy in 2017, an 8% increase on the previous year. The sector also employs more than four million people. Food and drink exports increased by 2.5% to £22.6 billion in 2018 according to new data from Defra. NFU President Minette Batters said the figures “reinforce the importance of the British food and farming industry both nationally and globally”. She added that it “must not be forgotten as we head back into Brexit discussions”.

Rural communities ignored and underrated
The chair of the House of Lords Select Committee on the Rural Economy Lord Foster of Bath said rural communities and their economies had been “ignored and underrated for too long”. The Committee has now submitted recommendations to the Government to develop a rural strategy. Key recommendations in the report included:

•Local, “place-based” implementation

•“Rural-proofing” policies and legislation

•A review of rural transport

•A review of tax and tenancy systems around diversification

•Development and implementation of strategies at a local level.

The TFA’s chief executive, George Dunn, said “The TFA hopes that their Lordships will take the opportunity of supporting amendments to the [Environment] Bill if it leaves the House of Commons without adequate amendment”. CLA president Tim Breitmeyer said “we are pleased that the unique circumstances of the rural economy have been recognised by the Lords”.

Profit-less company valued at $1.5 billion
Beyond Meat’s losses increased from $25.1 million in 2016 to $29.9 million in 2018. It has not reported a profit since its founding in 2009. Despite this the US firm priced 9.6 million shares at $25 each, giving the company an initial market value of $1.5 billion. That price increased 163% on the first day of trading to $65.75 after peaking at $72 giving the company a value of $3.8 billion. The company reproduces meat products by inspecting the molecular structure and replicating it from plant components. 70% of their revenue comes from burger sales but the company also offers sausage, chicken and beef alternatives. Beyond Meat says funds from the IPO will be used to invest in new manufacturing facilities and research and development.

OTHER RURAL NEWS

Cow cull game causes complaints
An interactive exhibit looking at the issues around bovine tuberculosis (bTB) has been removed from a Bristol museum. The game hoped to educate children about bTB, but has been called “frighteningly naïve” by one visitor who complained to the centre. She argued that the option to cull a cow infected with bTB was “particularly distasteful” and was “promoting bad things to do to animals”. We The Curious, the museum hosting the exhibition said “we’re committed to providing exhibits and experiences that stimulate conversation and questions around big ideas”. It also pointed out the vaccination option that the game offered.

And finally…
Drawing da Vinci
An Italian land artist has ploughed a portrait of Leonardo da Vinci in a field on his parents’ farm in Verona, Italy. He took eight hours to carve out the portrait. The creation is to mark 500 years since the death of da Vinci. Dario Gambarin’s work was short lived as his parents ploughed the field again just days later so they could establish crops. This is not his first piece; he has also carved likenesses of Obama, Mandella and Mickey Mouse.