Thursday, 25 August 2016

Basic Payment Scheme

West Country farmers and landowners are worried that the current level of cashflow coming from the Basic Payment Scheme will not be maintained after 2020.

They welcomed the announcement by Philip Hammond, the new Chancellor, that funding under the Common Agricultural Policy will stay - at least in the short term.

This appears to mean that the current level of payments being made under the BPS will be maintained until 2020, which coincides with the lifetime of this EU scheme. What is not clear is whether the domestic rules relating to this scheme will change following our departure from the EU.

Mr Hammond also confirmed that any structural and investment projects signed off before the Autumn Statement at the end of November, “even when these projects continue beyond the UK’s departure from the EU”, will continue to be funded. This should include all projects paid through the Rural Development Programme for England such as agri-environment schemes.

Again this is good news for farmers and landowners committed to long term agreements, many of which still have up to ten years to run. But what will replace these schemes? We need urgent clarity on the future of agri-environment schemes beyond November.

Unsurprisingly, Mr Hammond’s announcement was welcomed by leaders of farming and countryside organisations as good news for the short term.

A National Farmers Union statement said: “This should mean that farmers can count on receiving the Basic Payment Scheme through to 2020, and that agri-environment schemes already in place are guaranteed through to their conclusion,” while NFU president Meurig Raymond added: “I hope that this short-term certainty will help to deliver longer-term confidence. This is exactly what farm businesses need now.”

Similarly Ross Murray of the Country Land and Business Association (CLA) explained: “This will provide a significant degree of reassurance to farmers and other landowners across the country.

“We have been clear, since the start of the EU referendum campaign, that this is the first decision ministers had to make to reassure rural businesses in the event of a Brexit vote. It is therefore a strong signal that will give confidence to businesses considering their future in a difficult agricultural market.”

So, in the short term, this provides farmers and landowners some degree of certainty and gives government breathing space to develop UK agricultural policies which will be fit for purpose.

But it is a pity the government did not start planning for a post-Brexit vote until after the referendum.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Wednesday, 24 August 2016

Suffolk: BREXIT-resistant

Following the Referendum I expected to see a negative reaction in our local property market but, thankfully, I was wrong. This can’t be said for all areas across the UK but Suffolk has, fortunately, proved Brexit-resistant.

Sixty percent of Suffolk’s electorate voted to leave Europe and Brexit has made us take stock. We face a different kind of future and times are changing but we are optimistic about the property market for the year ahead.

In July I tweeted about our all-time record selling month including sales agreed, exchanges and completions; the Autumn market looks very promising too. 

Interestingly, in the past four weeks, a few Australian buyers have registered with us in their search for property. One such couple explained to me that the exchange rate was fuelling their decision to buy now and they had chosen Suffolk specifically for the vibrancy and friendliness of our well-served villages. 

They appreciate the rusticity of our countryside and coastal regions and also the general lack of one-upmanship - they like our relaxed vibe. They had carried out due diligence on where best to buy in the UK which had led them to fall for Suffolk’s rosy glow and its comparative good value for money.

Lavenham and Long Melford have been top of their search list which brings me on to the changing face of our high streets in our market towns and larger villages. Walk along either of these high streets now and you get a sense of new, sophisticated café societies emerging.  Suffolk has grown up and this changing face is one of the most obvious indicators as consumer trends change. The growing café and gallery culture combines with stylish boutiques stocking high-end, trendy brands.

Coastal regions like Aldeburgh and Southwold are akin to Chelsea-on-Sea these days but, in my mind, the town that stands out for the most significant transformation in recent years has to be Hadleigh. 

Few high streets offer as much as Hadleigh’s does. A new and excellent selection of shops, boutiques, restaurants & pubs, everyday amenities, doctors’ surgery, schools, sports facilities and clubs and all within walking distance of the other.

The town has a beautiful selection of colourful houses and is surrounded by stunning countryside with riverside walks. It hosts the annual, agricultural Hadleigh Show and also benefits from good access for both Manningtree and Colchester stations; add to this, the success of industries on its outskirts such as Celotex and Jim Lawrence. 

Hadleigh is a perfect Suffolk example of how country living, commerce, agriculture and tourism can co-exist in a comfortable and natural way.

Maybe this charming self-sufficiency is another reason why Suffolk is, so far, proving to be Brexit-resistant.

Caroline Edwards
Residential Sales, Long Melford

T: 01787 888622

Thursday, 18 August 2016

"Leaving the EU can be an opportunity for businesses across the countryside"

Agriculture looks worryingly neglected in North Somerset MP Liam Fox’s department created to win crucial trade deals following Brexit.

His new Department for International Trade has now announced all his ministers but none of their portfolios include a direct reference to agriculture.

The Country Land and Business Association has raised the alarm, pointing out that failure to secure strong trade opportunities for agricultural products will put UK food security and the environment at risk.

The worry is that agriculture will be treated as a low priority or may even be excluded from international trade negotiations.

In response the CLA has published a briefing which explores the opportunities for agriculture and forestry trade outside the EU and sets out the risks if trade declines substantially following Brexit.

CLA director general Helen Woolley said: "Leaving the EU can be an opportunity for businesses across the countryside. We have great entrepreneurs and great products. If the conditions are right we will thrive. But those conditions will not come about without careful planning and tough negotiations.

"Nowhere is that more the case than in agriculture. It is notoriously difficult to establish open trade deals for farming products. It is seriously alarming that no government minister has been given specific responsibility to deliver it.

“We now seek urgent reassurance that the government will deliver for our farmers and rural producers. We expect the Department for International Trade to start working together with us straight away and this is a terrible start.

“There are serious consequences if we don’t get this right. We could see food prices rising and the nation’s food security may be compromised. The environment could start to suffer and many farms and manufacturers could go out of business.

“Farmers and other food producers want to provide the country with a safe, secure supply of food. Land managers want to carry on their good work improving nature and wildlife, helping to tackle climate change and managing the UK’s distinctive landscapes.

“This is why it is so important that ministers assure us all that securing the best deal for food and farming will be a high priority and not an afterthought in their trade negotiations.”

The CLA briefing sets out the five objectives for a trade policy that will allow UK farmers and rural businesses to compete on an international platform.  These include:

•    Opening new markets
•    Growing existing markets at home and abroad
•    Delivering the best deals for UK consumers
•    Equipping businesses to compete
•    Improving farmer resilience

However, I doubt many of these goals will be achieved if there is no high level representation fighting for British agriculture in the international trade negotiations.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 12 August 2016

Milk price optimism as production shrinks

In the last two years we have seen milk prices slump to unsustainably low levels for many farmers because world markets became oversupplied.  However, it appears supply and demand are now coming back into balance as dairy farmers cut production.

Here in the UK dairy farmers have probably reacted to this problem more actively than in many other parts of the world.  This is exemplified by the latest Agriculture and Horticulture Development Board dairy milk production figures which show milk production in the first two weeks of July was down 10.2 per cent on last year.

In the same period the number of producers in England and Wales has fallen by 239 but that only represents a drop of 2.4 per cent.  Therefore, assuming these producers were representative of the average dairy farmer, this indicates that the cut in production has been across the whole industry, including many farmers who intend remaining in production. 

I suspect the reason is that many farmers have cut back on feeding expensive concentrates in favour of maximising production from fodder, a cheaper form of production which generally gives lower yields.

As a consequence supply has tightened and in the UK in particular this has also been exacerbated by the fall in value of sterling following Brexit which is making imports more expensive.  Accordingly milk prices appear to be on the rise as demonstrated by recent announcements from dairy companies such as Dairy Crest and First Milk.

This is most welcome news for dairy farmers, although even after the latest milk price rises many will still be struggling to make a living - especially because the fall of sterling is a double edged sword which is likely to force up many input costs such as fuel and fertiliser.

However, I am hopeful that the tide has now turned in the milk production cycle, which will mean dairy farmers can expect to see a period of growth in commodity prices. 

Of course that will probably also mean food price inflation in the shops which is something the government will not want to see just at a time of interest rate cuts and more quantitative easing. 

But the long term consequences of our exit from the EU is quite another story of potential opportunity and risk which has yet to unfold.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381