The Rural Update: Working together to boost profitability

Viewpoint

To condense the wish list of the entire farming sector, which covers a vast range of agricultural businesses from highly commercial arable enterprises to extensive upland livestock units, into 57 considered and meaningful recommendations is no small achievement by Minette Batters.

As the former NFU President explains in our interview with her, the government’s response to her Farming Profitability Review has been encouraging so far, but the momentum will need to continue if her recommendations are going to add long-term value to an industry worryingly lacking in self-confidence.

But what the review makes very clear is that solving this crisis is not just down to the government. There needs to be a concerted effort by everybody involved in agriculture and across the food chain to cooperate more effectively towards a shared goal. 

Farms and landed estates have a crucial role to play in the process, and while Baroness Batters’ recommendations, if actioned, will make the journey easier, their future, without the safety net of subsidies, lies largely in their own hands.

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Commodity markets

Oil prices volatile

Crude oil markets remain volatile as traders try to assess the implications of Donald Trump’s potential response to the Iranian government’s brutal crackdown on public protests against the regime. Prices rose sharply last week as the US President threatened military action, which could disrupt oil output from the region. Brent Crude futures, however, fell 5% to below US$66/barrel in early trading yesterday (2 Feb) as Trump claimed Iran was “seriously talking” with Washington.

The headline

EU regulation cost

A new study by consultant Andersons, commissioned by lobby group CropLife UK, estimates that almost £1 billion could be wiped off farming profits if Great Britain aligns its Plant Protection Product (PPP) regulatory regime with that of the EU.

Although the farming and food industry has broadly welcomed greater UK alignment with EU phytosanitary regulations, arguing that it would ease the flow of cross-border trade, those financial benefits could be wiped out by restrictions on the use of agri-chemicals not approved in Europe.

Under a “cliff-edge” scenario to meet the 2027 target for PPP alignment, the report

predicts an estimated loss of 3% to 6% in Gross Value Added of UK crop production in the first year, with Total Income from Farming estimated to fall  between £500 million and £810 million.

The loss of four new active crop protection chemicals could see wheat volumes fall by 9% to 16%, potatoes by 4% to 6% and apples by 3% to 7%. This could have a knock-on impact on the UK’s food self-sufficiency, higher prices for consumers and reduced margins for farmers, the report argues.

News in brief

Interview with Minette Batters

James Farrell, Head of our Rural Consultancy team, sat down with Minette Batters to talk in detail about why the 57 recommendations contained in her recently published Farming Profitability Review are so crucial to boosting the resilience of the country’s agricultural and food industries and her pledge to ensure the government acts on its commitment to implement them. Read highlights of the interview.

Scottish environment bill passed

The Scottish Parliament passed the Natural Environment (Scotland) Bill last week. The bill introduces statutory targets for nature recovery, mandates the inclusion of swift bricks in new houses, updates the legal framework for National Parks and gives ministers greater power over deer management and land use. Lobby group Scottish Land & Estates welcomed last-minute amendments to the bill’s deer management provisions but remains cautious about its overall impact.

IHT court case greenlight

The High Court has confirmed that an urgent judicial review of the government’s introduction of the controversial family farm tax can go ahead. Law firm Collyer Bristow said: “The claimants argue that the government’s decision to undertake only a limited technical consultation on a narrow aspect of the proposed reforms was unlawful. This was especially damaging given the likely impact of the changes on farming and business‑owning families.” A House of Lords’ committee has also called for the deadline for making Inheritance Tax payments to be extended from six to 12 months given the complexity of valuing farming estates.

Grey squirrel action plan

Landowners could be offered new financial incentives as part of the government’s updated Grey Squirrel Action Plan. The North American imports have contributed significantly to the decline of the native red squirrel and cost the forestry industry an estimated £37 million a year in damage to trees. Without greater control, the rapidly growing population of greys, which has hit already hit 2.7 million, could jeopardise the government’s ambitious tree-planting targets.

Sewage sludge consultation

The government has just opened a consultation on its proposals to reform the regulatory framework for the application of sewage sludge to agricultural land in England. One of the proposed options is to bring sludge applications within the environmental permitting regime. The consultation closes on 24 March.  

Heat threat to farming

Farmers taking a long-term view need to plan for a 150% increase in the number of “extreme heat days” by 2050, according to new research from the University of Oxford. Ireland will experience an even larger surge with a 230% hike. If correct, the predictions, which are based on global temperatures rising two degrees above the pre-industrial average, will require radically different cropping strategies, the development of new varieties and better management of water resources.

Tesco chief climate warning

Meanwhile, Ken Murphy, the Chief Executive of Tesco, the UK’s largest retailer has warned that there need to be much better use of data, collaboration across the food chain and leadership by government if a potential national food emergency driven by climate change and biodiversity loss is to be averted. Tesco, however, failed to make it into the top ten of a new ranking of the EU’s largest supermarkets based on their climate action and protein transition plans. Lidl came out on top.

GM tomato approval

A team of UK researchers that created a genetically modified (GM) tomato with high levels of antioxidants almost 20 years ago is set to apply for their creation to be licensed for consumption here. The purple tomato developed by the John Innes Centre in Norwich is already on the shelves in the US, Canada and has recently been approved in Australia. The move will test if the UK’s attitude to GM crops is becoming more tolerant. Proponents argue being able to utilise the technology is one of the big benefits of Brexit.

Rural Report out now

The Autumn Winter 25/26 edition of The Rural Report, Knight Frank’s thought-leadership publication for rural property owners and their advisors, is available now. Full of insight from leading landed estates and our Rural Consultancy experts, it’s a must-read. To receive your copy, please sign up here.

Property markets Q4 2025

Farmland - prices stabilise

According to the Knight Frank Farmland Index, which tracks the value of bare agricultural land in England and Wales, the average price of land fell only marginally in the final quarter of 2025. However, diminishing farmer confidence and Inheritance Tax (IHT) worries saw prices slide by around 5% over the year. An acre is now worth just under £8,700. The government’s partial IHT U-turn just before Christmas should help stabilise prices during 2026.

Country houses - values slide

The Knight Frank Country House Index, which tracks the value of properties outside London above £750,000, lost 5.7% of its value in 2025 due to economic uncertainty and worries about what might be included in Labour’s second Autumn Budget. Properties classified as farmhouses were hit particularly hard, sliding by 7.3%. However, the market looks to be bottoming out with prices falling only marginally in the final quarter of the year and exchanges rising by 5%. Contact Tom Bill for more insight and data.