Twenty-five year Environment Plan

The Natural Capital Committee has reported its recommendations for a 25-year Environment Plan.  There are five key sections to this important report:

  1. Vision, ambition and goals
  2. Investment needs
  3. Milestones
  4. Governance
  5. Agricultural subsidies post-Brexit

Twelve goals are offered; these include:

  • Breathable air that achieves international standards;
  • Flood protection by various means including natural flood management to protect everybody against a 0.5% probability of flooding:
  • All inland water to be of good status, and coastal waters all to be good for bathing;
  • Greenhouse gas emissions conforming to international targets, including emissions from land-based activities
  • Access to local greenspace and open recreation for all.  The following goals are suggested:
    • One hectare of local nature reserve per 1,000 people;
    • Two hectares of natural greenspace within 300 m of every home;
    • A 20 ha greenspace within 2 km of every home
    • No suggestion is made that the effect of this has been modelled and compared with the current state of provision.

Turning to investments the report proposes 11 items and these include:

  • 250,000 ha of woodland by 2040;
  • All peat to be in favourable condition;
  • Restoration of hydrological cycles including channel restoration and natural flood management measures;
  • New National Parks (no suggestions as to where);
  • Farm funding to be limited to public goods and high welfare standards;
  • Working closely with Local Nature Partnerships;
  • Developer contributions via planning etc to be pooled for natural capital investment;
  • An enhanced capacity for citizen action and involvement;
  • Natural Capital Net Gain principle which would apply to planning, environmental regulation and public procurement wherever possible;
  • Despite being referred to as investments, none of these are funded or compared with the status quo.

Five year milestones are proposed, which need to be supported by a natural capital risk register; accounting measures; cost benefit appraisal approaches and natural capital balance sheets.  Pp 8 and 9 of the report make particular mention of the private sector in this respect but do not expand on this point.

It is proposed that there should be a State of the Environment Report by 2019 and that this should be updated regularly.  For governance the committee propose that the 25 year Environment Plan should be placed on a statutory footing under the authority of a single organisation, with a separate independent body on the lines of the National Audit Office to report regularly on progress.

The final section is concerned with agricultural policy and is perhaps the vaguest part of the report.  Much is made of the examples of market orientated projects like South West Water’s involvement in Upstream Thinking.  Although the report claims that several water companies are involved in such schemes, this is the only example to be cited.  There are indeed other examples and it is a shame that the report does not address more fully the challenges in developing new thinking in this area compared with its more defined focus in earlier sections.

Perhaps on the other hand however, this should be welcomed by those of us who have spent a lifetime involved in day to day management of rural estates and farms as an opportunity still to bring practical common sense and hard-earned local knowledge to further deliberations on these matters.

This provides the perfect opportunity to finish on an event being organised by the Ecosystem Knowledge Network with the Tatton Estate and the Country Land and Business Association on Natural Capital for Rural Estate Professionals at the end of October.  The latest report from the Natural Capital Committee is an important step forward in defining our rural future – do come and join us to see how this might begin to look on the ground.

 

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Budget 2016: Rural and property points

Headline points from the 2016 Budget for the rural economy and property. Get out of sugar, get into tunnelling, run a micro-business on the side, infrastructure needs you, take your capital gains now, incorporation is looking better and better unless you intend to sell your professional services to the public sector, drink whisky and beer not wine. Despite this, old age and death are beginning to look expensive.

A £3.5 bn reduction in public expenditure is not intended to dent George Osborne’s claim that, “We [ie the Conservative Government] are the builders”. Practically this means Continue reading “Budget 2016: Rural and property points”

Agriculture: Five Great Challenges

Jeremy Moody, Secretary and National Adviser to the Central Association of Agricultural Valuers, spoke at Harper Adams University on Thursday 15th October on ‘Agriculture: Five Great Challenges’.

Opening with the observation that necessity is the mother of invention Jeremy commented that farming only adapts when it has to do so.

Jeremy identified his five great challenges as:

  1. Volatility.  Farming’s response so far has been to spread unit costs by taking on more land.  Attempts have been made to spread risks as well, but farming risks are increasingly connected.  Cost leadership is the answer, but ‘costs are like daisies’ – you cut them down and they grow up again.  Some farmers have responded effectively by moving further down the supply chain, for example the potato grower who now supplies chips to take aways.
  2. Output/acre ~ value/acre: We are generally growing low value commodity crops and with this we are seeing an inexorable shift to domination by combinable crops, wheat in particular.  The number of potato growers is predicted to drop from 2,000 to 1,000 over 10 years.  On the other hand, high value output enterprises are starting to appear.  For example vineyards in the south of England, and orchards.
  3. Resources: capital has been readily available at very modest cost, but the rising challenge will be the repayment of the capital itself rather than the servicing charges.  There are 60,000 farms which keep only one person in work.  Employed labour is concentrated in the pig, poultry, horticulture and dairy sectors and many of these employees come from abroad.  There are gaps in the age structure of farmers and it will be a continuing challenge to recruit and retain skilled labour.  Foreign workers are no longer confined to handwork in the fields but are steadily moving up the value chain – without its input we would not be able to sustain much of the higher value cropping leaving farmers with little choice but to revert to monocultural wheat.  Soil health and the resilience of natural capital is also a key part of the resource challenge.  We need to be able to put the right values on the health of soil.  This also draws in the value of water, and abstraction rights for irrigation in particular.
  4. Science and productivity: There has not been much growth in productivity since the 1980’s yet we know that precision farming can increase yields.  There needs to be spare capacity in management in order to make time to consider the possibilities and implement new approaches.  Our increasing reliance on data raises questions about its ownership, for example at the end of tenancies, from one farmer to another, from contractor to farmer.  Actually making effective use of all the data and technology now at the farmer’s disposal is also a large part of this challenge.  Modern machines have enormous technical capacity, but in practice little of what is available might actually be used.
  5. Progression: Flexibility must be the watchword in considering progression.  New entrants need not be young.  Sideways entrants from other sectors can bring just as much and more.  The wonderful smallholding opportunity for the 25 year old can be prison for the same 40 year old.  The industry is dominated by family businesses, 90% of farm employers and 30% can trace their farming origins to before 1900.  Increasingly we may see 90 year olds leaving farms to 70 year olds.

We cannot be the world’s cheapest producers, it is therefore essential that we focus on high input and high output farming with a long term view to ensuring the health of the basic resources on which farming and much else depends.

What do you think of Jeremy’s Five Challenges for Farming?  Here’s the video if you would like to see more:

Source: Agriculture: Five Great Challenges by Jeremy Moody

This video was filmed at Harper Adams University on 15 October 2015 in front of a live audience of students and staff in the Weston Lecture Theatre

Estates Gazette Rural View: Christmas Reading

I have been writing a quarterly column for the Estates Gazette since 2013 called Rural View.  This year’s articles have covered Water, Forestry, Scotland and farming safety.  If you’d like to catch up with any of the articles over the Christmas holiday, here they are:

Farming Safety: EG Rural View Dec 14 H&S

Scotland: Rural View Sep 2014

Forestry and Woodland Valuation and TaxationEG Rural View May 2014 Forestry

Water: EG Rural View February 14 Water

Meanwhile a happy Christmas and prosperous new year to all my readers and visitors.

Defra: a challenging brief

The Conversation asked me to write an appreciation of Owen Paterson’s tenure as Secretary of State for the Environment. It was published last night under the title, Badgers may cheer Owen Paterson’s exit from Defra, but not everyone feels the same

A white, middle-aged, country man who nevertheless forgot to take his wellies to a flood zone a stone’s throw from one of his infamous badger cull areas, now finds himself culled. Is this how we should remember the Rt Hon Owen Paterson MP, Secretary of State for the Department of the Environment, Food and Rural Affairs, September 2012-July 2014?

Paterson’s appointment to Defra was popular with farmers and landowners because he was seen as one of their own: MP for that most rural of constituencies North Shropshire, and a leading figure in the European tannery trade. Defra was badly in need of a safe pair of hands after Caroline Spelman’s disastrous attempt to privatise the Forestry Commission. Moving across from the Northern Ireland brief, Paterson was to prove an able choice in this regard.

That is not to say the Defra tractor ploughed a steady course during his tenure. Continue reading “Defra: a challenging brief”

Adding Value to Land: 10 things to think about

Presentation from the RICS National Rural Conference held on 19 June 2014 at the Royal Agricultural University, Cirencester.  Ten ideas which will be important to future success in land management.

 

Budget 2014: Rural points

Nothing very obvious grabs the rural headlines in today’s budget other than the extension of CGT rollover relief to the new Basic Farm Payments.  This measure is backdated to 20 December 2013, the date the new payment entitlements were introduced.

The single most significant measure for most rural businesses will be the increase and extension of the Annual Investment Allowance.  Currently £250,000 a year this was due to revert to its former rate of £25,000 after December.  In a very welcome extension it is to be increased to £500,000 almost immediately (from April), and to be extended to 31 December 2015.  Complications which arise from straddling account year ends aside, this is most welcome for any farmer with serious investment plans in the next year or two.  The government reckons this will ‘cost’ £85 million in 2014-15 rising to £1,270 million in 2016/17.  However there will be a benefit to government from 2017-18 of £445 million over two years as annual writing down allowances are proportionately reduced.

The property world will also be interested in the extension of the special taxes which now apply to dwellings owned by ‘non-natural persons’ – generally meaning valuable London property held by companies, latterly to avoid SDLT on sales and transfers.  The threshold for 15% SDLT is reduced to £500,000 from £2 million immediately – although there are savings for those unfortunates who have exchanged contracts but not yet completed.  The threshold for ‘ATED’ – Annual Tax on Enveloped Dwellings – will also start to fall from 2015, to £1 million in the first year incurring an annual ATED charge of £7,000 and the following year to £500,000, leading to an annual ATED charge of £3,500.

Environmentalists will want to study the changes to the Carbon Price Floor.  The Carbon Price Support rate has been reduced to £18/tonne through to 2020.  It had been planned to raise it to £30 per tonne in 2009 prices by then.  However the EU Energy Trading Scheme has not worked well, and continuation at the current floor rate was seen as a threat to the competitiveness of the electricity generating industry.  This should take some pressure off electricity bills in the next few years (although marginally so in most cases).

Other more detailed points which may be relevant in the rural economy and to property include: Continue reading “Budget 2014: Rural points”