Wednesday, 25 May 2016

Visit us at The Bath and West Show

The arrival of Rupert Cox as chief executive of the Royal Bath and West Society has proved most welcome.

On taking charge in January last year Rupert said: “Who would have thought that when I started stewarding in the sheep section of the Bath and West Show as a teenager some 35 years ago, that I would return to lead this iconic and highly regarded institution?”

Who indeed? But the show is now benefitting from the older Rupert’s considerable business experience, wealth of contacts, love of the countryside and likeable personality.

Rupert also comes from an agricultural background and I am delighted to see that under his leadership the Bath and West has regained more of its agricultural show character while enhancing its wider appeal for the whole family.

It offers consumers a rare opportunity to meet the producers of the food they eat – and increase their knowledge of today’s farming industry.

Our farmers need the public’s understanding and support, especially when so many are struggling with commodity prices below the cost of production and the disturbing failure of the Basic Payment Scheme to pay farmers their due in time and without a scary number of errors.

So I am pleased that this year’s Bath and West Show will feature a new, dedicated food and drink area showcasing some of the UK’s finest producers, running in conjunction with the British Cheese Awards and the British Cider Championships.

Visitors will also see more than 4,500 livestock and 2,000 horses, sheep shearing and a display of farming machinery from the past to the latest farming technology.

The Bath and West is the only four-day royal show in the country, with a history dating back to 1852.

This year its evolution continues and 2016 promises to be a show of transformation with changes to both features and layout.

One innovation comes courtesy of Michael Eavis, president of the Royal Bath and West of England Society, and perhaps better known as the founder of the nearby Glastonbury Festival.

Unsurprisingly, Mr Eavis’s addition to the show is a new music area with him sourcing the acts. Music will take place throughout the day and into the early evening, bringing a festival feel to the showground.

My firm, Carter Jonas, will be in the CLA stand at the show and we will be pleased to see you there.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Thursday, 19 May 2016

DEFRA must get a grip on this payments shambles

Defra secretary Liz Truss must deal with the shambles that is the Rural Payments Agency and make it fit for purpose.

As the deadline for submission of 2016 Basic Payment Scheme applications has passed it has become clear that although the new online application system has been reasonably effective where all the field information is correct, there are significant problems where errors have occurred over last year’s claim. 

Consequently some farmers have still to receive any payments from last year and many of those who have received payments have been given the wrong sum.

Most of the problems seem to stem back to the fact that for one reason or another land parcels do not seem to have been properly connected to the farmers who claimed against them in 2015.  This may be because the Rural Payments Agency has not yet processed the many land changes which were notified to them almost a year ago, or because of human error or technical glitch.

Whatever the reason, the result is that some farmers have had to submit this year’s claim based on information submitted last year but not updated on the RPA’s online mapping system, which is going to compound the problem in processing this year’s claims. 

Also many farmers are having to submit their claim partly online and partly on paper where the land is not shown properly on the digital plans.  I can only imagine the chaos this will cause trying to re-unite these two parts of the same claim.

This leaves many farmers feeling vulnerable to problems that may arise as a result of errors that should have been addressed last year but which may now have a hangover effect on this year’s claim as well. 

I hope that if errors from last year affect this year’s claim through no fault of the applicant, the RPA will take a pragmatic view and just get on and sort out the problems without penalising the farmer. Sadly there is no guarantee this will happen. 

In the past it was often “heads we win” and “tails you lose” as far as such problems are concerned.

It is also clear that a lot of errors have occurred in relation to the number of BPS entitlements held by farmers. 

To make a successful claim a farmer needs to match one entitlement with one hectare of eligible land.  However, my experience is that following last year’s claim a significant minority of farmers have found that the number of entitlements they have been paid on is less than the number of hectares they declared in 2015 and in turn the number of entitlements carried forward into 2016 has been similarly reduced.

This is a double whammy as these farmers have not only had their 2015 claim reduced but they are in danger of being paid less going forward in 2016 and beyond unless the original problem can be rectified.

These are just a few of the many examples of problems and glitches which have ocurred in the new online system for which one can obtain no logical explanation from the RPA.  They now have their work cut out to sort out the many problems that remain from 2015 before the 2016 payment window opens on December 1, which must seem worryingly close already for those in the RPA responsible for making the BPS system work.   

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Thursday, 12 May 2016

Farmers' income and the effects on the commodity markets

As farmers’ incomes slump the big question is how long it will be before enough of them - at home and abroad - reduce or cease production to rebalance the commodity markets.

This will surely happen at some stage and result in incomes rising to previous levels, but understandably most farmers are hoping it will be their neighbour and not themselves who will be first to give up.

DEFRA has released its first estimate of what it calls the UK’s Total Income from Farming for 2015. The TIFF figures represent the profit produced by farmers and it is not surprising that 2015 witnessed the most dramatic year on year fall since the turn of the century when farming was in the depths of an agricultural recession.

The report explains that in real terms the TIFF dropped by 29 per cent from 2014 to 2015 which in monetary terms means a fall of more than £1.5bn to just under £3.8bn.  This huge fall is reflected in the TIFF for an individual farmer which slid to just under £19,500 a year.

The primary driver behind these figures is the slump in world commodity prices.  This has been well reported and it is probably no surprise that the dairy sector has fared worst, with the value of milk produced falling by £940m despite a 2.6 per cent increase in production.  However other sectors also suffered with the value of wheat for example dropping by £432m.

And as the overall economy strengthened, so too did the value of sterling which had a detrimental impact on exchange rate for the conversion of agricultural support payments from euros into pounds.  This resulted in a fall in the value of EU support payments of £150m.

On a brighter note, some of these losses were offset partly by the fall in value of energy costs and livestock feed which are estimated to have dropped by £215m and £201m respectively while the value of fertilisers fell by £114m.

The weather was also good resulting in excellent growing conditions which yielded a bumper harvest in 2015 with huge quantities of grass and other fodder crops also grown.  But this is in part why commodity prices have fallen because such good growing conditions have contributed to increasing world stocks of food and therefore depressed prices.  

So, although from an individual farmer’s perspective it is great to see one’s own crops yielding well and cows producing more milk, this exacerbates the imbalance in supply and demand and until the supply side of this equation falls, there is unlikely to be a significant increase in commodity prices any time soon. 

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381

Friday, 6 May 2016

The inbetweeners

Eighteen months ago in this column, I wrote about a sense of ‘our ping-pong recovery’. At that point too, I harked back three years to 2011 when I was advised that ‘being on the brink was the new normal’.  Round about that time in 2011, there was an Internet meme in popular circulation that took its cue from Charles Dickens’ novel, ‘A Tale of Two Cities’ in representing the world view according to the author as a Venn diagram.  The left set read ‘The Best of Times’ and the words in the right saw ‘The Worst of Times’.  In the intersection was one word: ‘It’. 

Perhaps we always inhabit the inbetween space. Yet sometimes our awareness of occupying the ‘It’ space is more acute than others -  especially if we put individual company achievements andthis region’s business success in the same pot as those on the national and international economic scene before divvying them out in either set of the Venn diagram.

May be there are more than two sets required if a Venn diagram is to potray the confusion of the most current voices of economic comment.

We had the International Monetary Fund (IMF) who, while acknowleding that oil prices are rising again, is warning of the implications of oil’s long term decline and the diastrous effect on Middle Eastern economies.

Then a couple of days later, those members of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC - but still oil producing – countries met in Qatar and, while indicating the majority’s willingness to impose an oil production cap, could not agree on a freeze given the frosty relations between two key players. This gave a shock to world stock markets the day after but a lower - but steadily so- oil price is something with which the markets are coming to terms. They certainly appear to be more tranquil at the start of the second quarter of 2016 than they were at its first.

China’s latest quarterly growth figures were, fortuitously, within its government’s range at bang on 6.7 per cent as many commentators predicted and welcomed.  However, this was down on the equivalent period last year and the lowest figure since Q1 2009.

Talking of 2009 and back to the latest IMF world finance health check, it has concerns that some of the ‘legacy issues’ which caused the 2008/2009 banking crises have not been addressed.  In particular, the substantial loans still languishing in the books of some Eurozone banks and which are unlikely ever to be repaid.

In another back to the future leap, economic commentators referenced the eminent economist, Milton Friedman who, in 1969, spoke of a monetary policy theory called ‘helicopter money’.  Boiled down in essence for us lay people, this theory sees central governments, through their treasuries’ instructions to their central banks, printing money enabling the governments to drop it directly on their populace of spenders – through tax cuts or increased public spending– rather than channelling it through the banks.

Helicopter money bypasses the banks to stimulate economies in the way quantitative easing (QE) doesn’t.  While some commentators see the case for helicopter money gaining ground, particularly with political advisers to central governments, others would prefer to see it remain within the covers of economic text books.  In any case, it is pointed out that the Eurozone countries do not have one central treasury to issue an instruction about Euro-printing.

On the domestic front, there appears to be consensus that the ‘self-inflicted wound’ of the EU referendum is unhelpful, at best, to the UK economy until it is resolved.  More on that story later, as the saying goes.

Will Mooney MRICS

Commercial, Cambridge

Thursday, 5 May 2016

Prescribed forms changed

As a clear reminder of how vital it is to keep on top of legislative changes, amendments have been made to prescribed forms for assured tenancies and for assured agricultural occupancies.

The Assured Tenancies and Agricultural Occupancies (Forms) (England) (Amendment) Regulations 2016 came into force on April 6th 2016. The regulations prescribe forms for various provisions under the Housing Act 1988.

There is a new prescribed Section 8 Notice Seeking Possession under the Housing Act 1988 (Form 3). This is the notice that you serve when ending a tenancy, typically for rent arrears or other breaches of tenancy. It’s the third time it has been updated in a year, but this time only for England as in Wales the previous updated form is still current. Here’s a link to the new regulations and forms.

The Section 13 notice (form 4) used when rent is being increased for an existing tenant without the issuing of a new tenancy agreement and form 5, which applies to agricultural tenancies, have also received minor amendments to correct formatting and drafting errors and in respect of the Section 8 notice to refer to the new form 6A prescribed form for giving notice under Section 21 of the Housing Act 1988. Do not ignore them. These prescribed forms must be used on or after April 6th 2016.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Good landlords risk falling foul of catch-all law

Legislation now widely known as the law that stopped retaliatory evictions was intended to make bad landlords conform.
But it risks becoming something of a catch-all for otherwise good landlords who inadvertently may have a gap in the paper trail recording their compliance with legislation covering items of maintenance, repairs, and safety checks.
Tenants are likely to have been following the press coverage since the law came into effect on October 1st last year so may be well informed about their tenancy rights – and some more unscrupulous individuals could take advantage of the law to avoid vacating a property when served with a Section 21 notice.
Most important is that landlords ensure that at no time is a tenant given the opportunity to dispute a Section 21 notice. Undesirable tenants tend to become good amateur lawyers, or know someone who is or where to get advice on their rights, as soon as the possession notice arrives. No matter how frustrating the law may be, it’s therefore essential that you can prove the existence of gas and electrical safety certificates, the installation of smoke or CO2 alarms where required, and that general maintenance has been carried out, with defects corrected, as soon as practicable after work is requested by the tenant.
Once a tenant has made a complaint the landlord is prevented from retaliatory eviction under section 33 of the Deregulation Act 2015. This makes it imperative for landlords to stay on top of their legal obligations for maintenance and that they attend to repairs before the tenant can head for the local authority’s office and seek the serving of an Improvement Notice.
Whenever you receive a complaint from a tenant regarding the condition of the property you must within 14 days give an “adequate” response in writing. If you don’t comply, a Section 21 notice may not be valid should it be used as evidence in court. The legislation refers to the complaint being in writing but possibly all complaints, no matter how minor, should be clearly logged and receive a response.
The section also provides that if the tenant is unhappy with your response he can complain to the local authority who may then serve a notice requiring works to be undertaken. If such notice is served, no valid Section 21 notice may be served for six months from the date of that notice.
Good processes regarding complaints handling, and a clear understanding by tenants as to who is responsible for accepting complaints, is now more important than ever in residential lettings property management.
As a reminder, the law also stipulates that at the start of the tenancy, the landlord or letting agent must give the tenant details of where and how the deposit is held and copies of both the EPC and, where applicable, the gas safety certificate and the Government’s eight-page booklet “How to Rent: the checklist for renting in England”. This is only available electronically and has to be printed and handed over each time.
Details of what must be served are contained in the The Assured Shorthold Tenancy Notices and Prescribed Requirements (England) Regulations 2015 which can be found here.
Good practice will no doubt dictate that at the time of serving the correct Section 21 notice the rest of the documentation should be re-served so that there can be no question of the tenant having received it.

Lisa Simon, 
Partner Head of Residential Lettings
T: 020 7518 3234 

Wednesday, 4 May 2016

Basic Payment Scheme applications

With less than two weeks to go before the submission deadline for this year’s Basic Payment Scheme applications, it is astonishing that 10 per cent of last year’s applicants have yet to receive any money for last year’s claim. 

As a result the RPA chief executive Mark Grimshaw announced at the last NFU Council meeting that bridging payments will be made to those who have received no money at all.
Mr Grimshaw explained that the final applications from last year were proving more difficult to process than had been anticipated because of the complications caused by a new inspection regime and changes to how commons applications are processed.

This may be true but what worries me is not just the 10 per cent who have received no payment, it is also the huge number of errors that have come to for those who have received payments.  From my experience of completing such forms about 25 per cent of applicants I have dealt with are experiencing issues of one sort or another.

These vary from inexplicable underpayments or fines for errors which do not seem to exist, the loss of entitlements, missing land on the online maps or the inclusion of land which is not part of the farmer’s holding.  Also, in some cases field boundary changes which were made last year have still to be processed which makes it very difficult to deal with this year’s application.
For example if the land changes from last year have not been mapped what should an applicant put on this year’s forms?  This is just one of the many practical issues causing farmers and their agents a real headache and yet there seems no way of sorting out even the simplest of problems in a timely manner. 

The current advice is to email the RPA with your query and then you receive an email by return which says: “Thank you for contacting the Rural Payments Agency. If we need to get back to you, we'll reply within 10 working days.”   
Sadly I have rarely received a reply from the RPA within 10 days. Clearly they do not think they “need” to reply but I can assure them that they do.  If they do not address these queries very soon, the errors from last year’s claims will be compounded into the 2016 applications which will make unravelling these problems even more difficult.

Unfortunately this does bring back memories of the fiasco that occurred in 2005 when the BPS’ predecessor subsidy system was introduced, the fallout from which was both costly in terms of EU fines being imposed on the government and hardship to farmers.  I just hope this will be a relatively minor fiasco in comparison.

James Stephen MRICS FAAV
Rural Practice Chartered Surveyor, Wells

T: 01749 683381