Rural Digest - Autumn 2022

Fri 14 Oct 2022

The three Fs - Fuel, Feed & Fertiliser - dominated the sector in the early part of the summer. These remain as pre-occupations but as price spikes bedded in, the widespread summer heatwaves of July & August threw up new challenges for 2022 harvest and plans for 2023.

Labour shortages and balancing above inflation rises in input versus output ratios are playing out this autumn against squeezes on farmgate prices.

Military conflict in Ukraine and the pressure on energy markets and supply continue to provide the international backdrop. Against this, the full impact of the initial fiscal measures and policy re-sets of the refreshed Whitehall administration have yet to play out.

In addition to new trade deals being concluded, we wait to see if there are any substantial changes to the wholesale shift towards ELMS as the sole farming funding framework, pending its ‘rapid review’.

This review by Defra is under the direction of the new Secretary of State for Environment & Rural Affairs, Ranil Jayawardena, formerly an Under Secretary in the Department for International Trade, whose stated aim is a balanced approach between a strong, healthy environment and a strong economy.

Shouler & Son’s dedicated rural professionals have continued to work with farm business clients in meeting the rolling programme of application deadlines and good working practice requirements.

This included a June deadline that was only announced in May for registering details of on-farm use of Plant Protection Products (PPPs) and adjuvants to ensure compliance with Defra and Health & Safety Executive (HSE) regulations.

In August, clients were reminded about the provision of transitional arrangements for 2022/2023 harvest profit margins for non 05 April year ends ahead of income tax regime changes 2024.

Early summer saw the publication by the Government of its Food Strategy for England.

As we commented at the time, it had been widely anticipated that the strategy would put matters of addressing healthy eating through regulation centred on specific foodstuffs at its core.

However, the strategy appears to have moved away from this as its core focus in taking account of the dramatic world events of the first half of 2022.

At the time of the publication of the Food Strategy, Defra also indicated its intention to publish an official land use framework for England next year (2023).

By August, the Food, Farming & Countryside Commission (FFCC) published its prototype version of a Land Use Framework.

At Shoulers, we believe the needs of all relevant stakeholders must be considered in arguing the rural property case based on the lived experience of our clients who are so invested in the countryside.

Opportunities for diversification continue to be investigated, developed and implemented in seeing our rural specialists and the firm’s commercial property team work on behalf of clients.

A call for suitable rural sites to boost the country’s Electric Vehicle (EV) infrastructure provision was made in response to the policy push by central government and international investor appetite.

We advised on the criteria for consideration as a suitable site for EV charging forecourts and what would make for a premium site.

The Shouler & Son mid-year review flagged up the ongoing appeal of converting ‘farm sheds’ for industrial units for mainstream industrial commercial tenant occupation.

Anticipation of the impact of anticipated energy rating regime to commercially let properties in 2025 changes is seeing ((https://www.shoulers.co.uk/articles/modular-approach-to-farm-sheds-ahead-of-energy-rating-rental-changes#)) innovative ‘modular’ approaches to re-purposing these farm sheds.

Our 2022 recruitment drive is proving successful in attracting young, talented individuals whose thinking complements the work of our established professionals.

And we invited Shoulers’ youngest rural surveyor to set out his thinking about the general drift of future farming.

In September, The Sustainable Farmland Trust - a US-backed fund - announced its intention to float on the London Stock Exchange.

This is the first fund of its kind to launch in the UK but such funds are not uncommon on other international financial exchanges.

Sustainable farming investment markets are not yet developed to a point of sophistication here and city institutions have yet to get to grips with sustainability as a formal and proven, bankable asset class.

This is definitely one to watch, according to our rural business professionals.

The farmland market remains resilient but it can be patchy. Demand is being driven by rollover money from development opportunities and the efficiency of this property sector’s appeal in the matter of inheritance tax.

Achieving best price in the current market can be achieved by open sale, as opposed to off-market. Therefore good advice is vital to guard against the current market’s variables.

Shoulers’ own autumn farm property portfolio got underway with the launch of Hall Farm, Goadby Marwood, Melton Mowbray at a guide price of £2 million as a sole agency instruction and boosted by an advertising profile in editions of Country Life.

Offered at a guide price of £2 million, it’s a ‘readymade’ farm property opportunity set in circa 64 acres (26 hectares) of pasture and woodland, and has an additional, supplementary land option available by negotiation.

October sees the dispersal sale of award winning Websters Stilton Dairy in Saxelbye, near Melton Mowbray, Leicestershire.

Part of a wider, ‘time of life’ disposal sale by the retiring owners, Shoulers was instructed earlier in the year as the sole selling agent to dispose of the property element of the dairy site in which there was competitive interest.

Turbulent times look set to continue this autumn and winter and there are concerns about farm businesses contracting as a response.

Many even face an existential question about the viability of growing or rearing food as a farming pursuit.

But for farmers and food producers, meeting the next challenge is an ongoing way of life with external shocks faced head-on with ever creative and diverse responses.

We pride ourselves in working with clients and other professional advisors charting routes through the intricacies of the modern rural business scene to reach solutions that meet our clients’ objectives - be they short, mid or long term.

For information about the full range of our rural services to clients, see shoulers.co.uk/pages/rural-services#/.