UK rural property: Seeking farming diversity
The Knight Frank Rural Property and Business Update – Our weekly dose of news, views and insight from the world of farming, food and landownership
9 minutes to read
I can’t say I’m particularly proud of the fact that I’ve interviewed most of the black commercial farmers in Britain. Not because they weren’t good interviews, IMHO they were some of my best work, but I feel uncomfortable that I can make that claim having spoken to just two people. As Nuffield scholar Navaratnam Partheeban points out in his new report discussed below, agriculture is the UK’s least diverse industry, particularly when it comes to ethnicity. And it’s not because, as some people assume, black and people of colour (BPOC) don’t want to farm – David Mwanaka, one of the farmers I interviewed, spent 19 years struggling to score a farm tenancy and pig producer Flavian Obiero posts passionately on X about his own business. The issues are more deeply entrenched. My other interviewee the entrepreneur Wilfred Emmanuel-Jones (aka The Black Farmer) told me about some of the issues he’s faced and why rural diversity matters. The solutions aren’t easy, but acknowledging the problem is a start AS
Do get in touch if we can help you navigate through these interesting times. You can sign up to receive this weekly update direct to your email here
Andrew Shirley, Head of Rural Research; Mark Topliff, Rural Research Associate
In this week's update:
• Commodity markets – Lamb limbers up, wheat steady
• Diversity – Nuffield report reveals ag issues
• Scope 3 emissions – Consultation on mandatory reporting
• Farm assurance – Red tractor pauses green scheme
• Borrowing costs – Cuts on the way?
• Flood prevention – Welsh nature-based solutions funding
• Grants – Woodland funding increased
• Rothbury estate – A view to the future
• Development land – Prices still falling
• Country houses – Prices drop
• Farmland prices – Market at peak?
• The Rural Report – Watch the videos
Commodity markets
Lamb limbers up, wheat steady
A shortage of supply is helping to nudge up deadweight sheep prices, which are about 50p/kg higher than this time last year. The floods that are afflicting many upland areas could further restrict the numbers of finished lambs coming forward. Grain and oilseed markets meanwhile withstood rumours that Russian planes were bombing the sea lanes from Ukraine’s Black Sea ports. Looking further forward though trader Frontier reports good premiums are available on the futures market for November 2024 wheat AS
Talking points
Diversity – Nuffield report reveals ag issues
Nuffield scholars have produced a plethora of fascinating reports over the years, but a newly released piece of research from farm vet and dairy technical specialist Navaratnam Partheeban makes for particularly thought-provoking and sometimes uncomfortable reading. Encouraging and Supporting Black and People of Colour in Agriculture looks at some of the reasons why agriculture is the UK’s least diverse industry, skewers the trope that black and people of colour (BPOC) living here are not interested in farming and, based on a study trip to the US, offers ideas to help change the situation. I’d say it should be required reading for all those involved in the sector AS
Scope 3 emissions – Consultation on mandatory reporting
The UK government is consulting on making Scope 3 emissions reporting mandatory for all large companies, or for companies in certain sectors. This would align the UK with other countries, such as New Zealand and the EU, which are already moving towards mandatory Scope 3 reporting. It is seeking views on the costs, benefits, and practicalities.
Scope 3 emissions are all indirect emissions, not included in Scope 2, that occur in the value chain of the reporting company. This includes emissions from upstream suppliers and downstream customers, as well as emissions from the transportation and use of the company's products and services. Currently, some of the largest organisations in the UK are required to disclose their Scope 1 and Scope 2 emissions in their annual reports in line with the Streamlined Energy and Carbon Reporting (SECR) framework. However, Scope 3 emissions remain largely voluntary. This will be of interest to many farming businesses who are part of the supply chain of these large companies. The consultation is open until 12 December 2023 MT
Farm assurance – Red tractor pauses green scheme
A barrage of criticism from the farming community has forced the Red Tractor farm assurance scheme to press pause on its controversial plans to roll out its Greener Farms Commitment module. As discussed in a recent edition of The Rural Update farmers are concerned that the while initially voluntary the module will soon become mandatory benefitting retailers while providing scant reward for the producers forced to adopt costly new environmental measures. A statement from the organisation said: “Red Tractor will not progress with the implementation of any new standards or additional modules until the first NFU independent review, focusing on Red Tractor governance, is completed.” AS
Need to Know
Borrowing costs – Cuts on the way?
The Bank of England opted to keep its base rate unchanged at 5.25% at its rate-setting meeting last Thursday.
However, as my colleague Liam Bailey writes in his latest economic and property update note the next move could be downwards, although a cut may not be on the cards until Q3 2024. You can read why here. If you need help with any borrowing solutions please contact Bradley Smith at Knight Frank Finance AS
Flood prevention – New Welsh nature-based solutions funding
Given the battering Britain has been taking from two violent storms in as many weeks causing widespread flooding it is interesting to hear that Welsh farmers will work with authorities to deliver nature-based flood management solutions across all major river catchments, under a new £4.6m programme announced by the Welsh government last week.
The two-year Natural Flood Management Accelerator Programme aims to reduce flood risk for around 2,000 properties using the power of nature. Authorities will work with Welsh farmers and landowners on nature-based solutions that reduce flood risk, such as restoring wetlands and peatlands, planting trees, and stabilizing banks and restoring rivers. The programme, which will fund 23 projects across eight different authorities, is expected to reduce flood risk for around 2,000 properties MT
Grants – Woodland funding increased
Defra has announced increased funding and more flexibility for farmers and landowners in England to grow more trees. The government has unveiled funding improvements to the biggest land management schemes for forestry, including the England Woodland Creation Offer (EWCO) and Countryside Stewardship (CS). As part of the changes, forestry funding for land managers will rise and there will be an increase in maintenance payments from 10 years to 15 years. An extra £1,750 per hectare will now be available to land managers resulting in a grant of £5,250 per hectare over the 15-year maintenance period. The EWCO scheme also covers the cost of planting with up to £8,500 available per hectare. Under the CS scheme land managers can receive up to £7,500 per hectare for planting trees, and up to £3,750 per hectare in maintenance payments over 10 years.
The Capital Window has also been extended from two to three years, to ensure farmers have two whole planting seasons to deliver their scheme. This is regardless of the start date of their agreement. Defra says the changes are designed to help drive tree planting rates across the country and to support farmers and landowners grow more trees. The government has set a target to increase tree canopy and woodland cover in England to 16.5% by 2050. If you are considering creating woodlands on your farm or estate then contact Knight Frank’s rural grant expert, Henry Clemons MT
On the market
Rothbury estate – A view to the future
The 9,500-acre Rothbury Estate in Northumberland has attracted a plethora of different potential buyers, many intrigued by its abundant natural capital offering, since it was launched earlier in the summer. This article, featuring my colleague Claire Whitfield, of our Rural Consultancy team helps explain some of the fascination with the historic estate that is being sold for the first time in 650 years AS
Our Latest Property Research
Development land – Prices still falling
The latest findings from our Residential Development Land Index show values are continuing to fall. “UK greenfield and urban brownfield values fell on average by 2.4% and 2% respectively in Q3 2023. In prime central London, land prices were flat during the quarter,” writes my colleague Anna Ward. “Average urban brownfield land values across England have now fallen by 20% since the most recent peak of the market in the first quarter of 2022 up to Q3 this year, with greenfield values down 17% during this period. But this quarter we have seen price falls start to moderate in nearly all areas,” adds Anna AS
Country houses – prices drop
The value of a home in the countryside is falling at the fastest rate since the global financial crisis, according to the latest instalment of the Knight Frank Prime Country House Index compiled by my colleague Chris Druce. In Q3 2023 average prices dropped by just over 2% taking the 12-month slide to over 8%. Despite the slump, values are still 12% higher than they were in June 2020. Chris says there is a bit of stalemate in the market as sellers cling to last year’s prices, while purchasers are angling for big discounts. Read the full report AS
Farmland prices – Market at peak?
The latest edition of The Knight Frank Farmland Index has now been published. The average value of bare agricultural land rose by 1% in the third quarter of the year to just shy of £9,000/acre. Annual growth was 8%, which outperformed a number of other asset classes (see chart). Our research suggests values may remain flat into 2024. Read the full report for more insight and analysis AS
The Rural Report – Watch the videos!
You've read the book, now watch the videos! To complement the thought-provoking articles contained within this year's edition of The Rural Report our whizzy Marketing team has also created a series of videos featuring many of the report's contributors. Head to our very own YouTube channel to discover more about biodiversity net gain and regenerative farming; find out how we are helping Guy Ritchie's Ashcombe Estate on its diversification journey; and read about the travails of an entrepreneurial Zimbabwean searching for a farm for his family. Plus, lots more AS