Culling of Badgers

As the cull of badgers has recently started in West Somerset and is due to start shortly in Gloucestershire, I feel I cannot let this moment pass without comment. This is obviously a highly controversial and divisive subject but it is also complicated and all aspects of the debate cannot easily be understood via short articles such as this. However, I will try to distil some of the information which I think is particularly pertinent.

First, it is quite clear that the policy of trying to control the spread of TB in cattle is not working. In 1986 only 235 cattle tested positive in Great Britain for TB but by 2010 28,541 cattle tested positive.

It is also important to note that in 1992 the Protection of Badgers Act was introduced which provided legal protection for badgers. As a result the badger population has increased dramatically because the badger has no natural predator. It is estimated that between 1988 and 1997 the badger population increased by 77% and has since increased further to 288,000 in 2005. It is thought the badger population continues to increase and having seen one this summer on the Liberty in Wells and two badgers killed on New Street, I can believe this is true.

It is also not in dispute that Badgers can transmit bovine TB to cattle and despite ever increasing levels of bio-security to reduce the impact of cattle to cattle transmission of TB and a regular programme of cattle testing and slaughter of infected animals, the disease continues to spread in cattle. The implication of this is that cattle herds are in many cases being re-infected from another source, the most likely of which is the badger population.

So what are the options that could be deployed alongside the continuing bio-security measures? I think there are three:

• Vaccination of cattle

• Vaccination of Badgers

• Culling of Badgers

My thoughts on these are as follows:

Vaccination of cattle is currently forbidden under EU legislation. Deploying a vaccine in the face of the European ban could lead to a ban on the trade of live cattle, meat and dairy products with other EU countries. In 2011, these trades amounted to £496,000, £490m and £1.2bn respectively. It is likely that countries outside of the European Union would follow the EU's lead. To change the legislation a significant amount of work will be required proving the safety and effectiveness of a vaccine and developing an effective test to distinguish between infected and vaccinated animals. We are currently many years away from achieving this although if successful, cattle vaccination would become an important element to help control TB in cattle but it would not be a comprehensive solution because the vaccine will not create anywhere near 100% immunity in vaccinated animals.

Vaccination of Badgers is another possibility and trials with an injectable vaccine are underway in Wales for example. However, the cost of doing this on a large scale and the need to vaccinate every year makes this unlikely to be a cost effective or practical solution country wide but it could be used to vaccinate badgers in target areas which could have a role to play in places. If an oral vaccine could be developed this would make it much easier and cheaper to administer a vaccine on a large scale but at present such a vaccine is not available.

Culling badgers is the most controversial proposal. Professor Bourne, who was in charge of the trial badger culls which took place early this century concluded that badger culling did reduce the disease in cattle but also spread the disease at margins of the cull area due to perturbation of badger social groups. As a result he concluded that the badger culling was not cost effective.

Since then Bourne’s conclusions have been open to debate but what has become clear is that continuing to only implement bio-security measures is not cost effective either. There is also a significant body of evidence from abroad that a disease such as TB, where a wildlife reservoir is an important source of re-infection, cannot be successfully brought under control without addressing the problem in the wildlife reservoir also.

Thus it seems to me that culling badgers widely will become an unfortunate but necessary means of bringing this costly disease under control. Culling badgers will only be one aspect of the control measures which will need to be put in place – continued testing and slaughter of cattle, on farm bio-security measures, possible targeted vaccination of badgers and in time the vaccination of cattle are all likely to play a role but there is a long road ahead before the incidence of TB in both cattle and badgers can be brought under control.

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Farmland Prices Have More Than Trebled

Farmland prices have more than trebled in the last 9 years according to the latest RICS Rural Land Market Survey.

During first six months of 2013, the cost of farmland jumped to an average price of £7,440 per acre across the UK, hitting a record high for the eighth consecutive period. In the South West average prices are a little below the national average at around £7,200 per acre. However, these prices include all sales of agricultural land, some of which may include fully equipped holdings with residential properties.

The residential element may therefore affect the overall average price of the land although probably not by as much as one would imagine. This is because most of the demand for land is coming from commercial farmers looking to expand their businesses as a result of higher commodity prices in recent years and investors who perceive agricultural land as a safe haven for their cash. Neither of these types of investors are looking to invest in residential property and are discriminating in favour of large, top quality, neighbouring plots with as small a residential component as possible.

As a result there is significant price dispersion, even in the same areas; plots that are smaller and of lower soil quality are attracting much less interest and achieving lower average prices.

Looking ahead, it seems that the market is far from finding its level. Respondents to the RICS survey expect the trend of rapidly growing prices to continue over the coming year with a net balance of 46 percent more surveyors predicting further growth.



James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Fall in Wheat Prices

Now that harvest is well under way it is frustrating that the weather has turned changeable although at the time of writing it does look as though the weather may be a little more settled in to the early part of the week.  However, of more concern to may arable farmers is the continuing decline in the value of arable crops.

Wheat is currently trading around £143/t which is almost £10/t down in last week and £43/t down on the price this time last year.  It is of course hoped that this year’s crop will yield better than last year’s rain affected crop but even so with prices down approaching 25% compared to last year this does present a challenge to many farmers.

Similarly, Oilseed Rape, which is one of the most popular break crops in an arable rotation in this area, has seen prices fall by £95/t from £373/t this time last year to £278/t this year.

The reason for the fall in wheat price is largely because there are good harvest prospects across the northern hemisphere which is in contrast to recent years where the USA and other areas have been hit by drought or very wet weather as we experienced here last year.

As far as the Oilseed Rape is concerned there are similar factors in play.  Global production is predicted to be up thereby depressing prices but this market is also influenced by oil prices more generally because some of the Oilseed Rape is used in the biodiesel market.  However, European policy on biodiesel is under review which is likely to result in further price uncertainty although paradoxically prices did rise last week on news that the USA had reduced its estimate of Soya production which had a positive “knock on” effect on the Oilseed Rape market.

All this goes to show how the profitability of farming in this country is now intimately related to world market prices.  Therefore all farmers can do is influence the things over which they do have control and not worry too much about those things over which they have no control at all.  In simple terms this means they have to farm as efficiently as they can and then hope that world commodity markets hold up sufficiently to yield a sensible return on their investment of time and capital.

On the positive side, every cloud also has a silver lining and these lower prices should feed in to lower feed prices for livestock farmers which will be good news to many in mid-Somerset where in general livestock farming of one form or another tends to dominate.




James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Milk Prices

The Rural Payments Agency reported that in June the average farmgate milk price increased by 0.8p/litre to 30.77p/litre. This is probably the highest average price that has been recorded but according to DairyCo, the price farmers are receiving for their milk today is in real terms about the same as that which they received over 20 years ago in 1992.

DairyCo is a not-for-profit making organisation working on behalf of and funded by Britain's dairy farmers. Its remit is to solve 'market failure' in the dairy industry by tackling issues not currently being dealt with sufficiently well to meet the needs of the industry. Its four main strategies to achieve this are by:

• The provision of a world-class information service

• Helping dairy farmers meet and manage environmental needs and regulatory requirements

• Helping dairy farmers increase their profitability through better business management

• Promoting the positive perception of dairy farming with the general public I suspect most readers will have never heard of DairyCo and so it may be failing to engage with the general public as well as it could but it is certainly an excellent resource for information on the dairy industry and so when it comments on matters such as milk price I think we should all sit up and listen.

Thus in their recent report it was stated that "Although actual prices are the highest on record, in real terms they are lower, which may explain why many farmers feel under pressure despite the current high price level." This pressure is evidenced by the fact that 22 dairy farmers ceased production in the last month and 1.8% left the industry in the last year.

The pressure comes from a whole variety of factors including milk price, increased regulation and increasing input costs. As far as milk price is concerned, one factor which comes in to play is world commodity prices which are currently strong and many dairy farmers will be frustrated that their milk price is not going up sufficiently to reflect this. But equally many of the milk processors are being squeezed in the middle, having increased the price they pay to farmers by on average 17.8% over the last year while retailers are holding down the price they pay at the other end to maintain their margins.

This seems to be evidenced by another recent report released by DairyCo on Cheddar Cheese Supply Chain Margins where it was found that retailer’s margin before deduction of their fixed costs accounted for nearly half (49%) of the average retail selling price of mild Cheddar in 2012/13. In contrast, processors have seen little change to their margins.

What this all goes to show is that the milk industry is a complicated business. But what concerns me is that the dairy farmers themselves seem to be at the bottom of a supply chain in which retailers in particular are in a strong negotiating position and are therefore able to secure a disproportionately high proportion of the profit that can be secured from a litre of milk. While this remains the case I fear dairy farmers will always feel under pressure.



James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Harvest expected to be prolonged

This last week saw combines emerge from hibernation as the first crops of winter barley in this area have been harvested. This is about three weeks later than usual and the barley will then be followed by winter oilseed rape and winter wheat although the harvest of the latter still looks several weeks off.

Further, harvest is likely to be prolonged this year because a lot more spring crops have been sown as compared to most years. This was because of the very wet conditions last year which prevented farmers getting on the land last autumn. These spring sown crops will generally be harvested after all the winter sown crops, meaning that it is likely there will be plenty of crops still to be harvested well in to September this year.

This prolonged and late harvest will pose difficulties for next year because farmers will struggle to get next year’s crops sown early this autumn which will affect next year’s yield. This is particularly important for crops such as oilseed rape where yields will be significantly affected if sowing is delayed much beyond the end of September.

Thus, it is unfortunate that just as crops have started to come “fit” for harvest, that the prolonged spell of hot weather has broken down. This is not necessarily catastrophic because many farmers would like to see a little rain to keep the grass growing and to prevent the premature die back of some crops on lighter land.

However, no one wants the weather to breakdown completely just as harvest gets in to full swing because the added hassle of a “start stop” harvest and the additional cost of drying crops is the last thing arable farmers need to see after a very difficult twelve months.

As far as yields are concerned it is too early to judge how good this year’s crops will perform although early signs are that that winter barley which has been harvested has performed reasonably well although crop prices have eased back in recent weeks.

Barley is trading at around £138/tonne, wheat at just under £160/tonne while oilseed rape is trading at £290/tonne which is approximately £80/tonne less than it was trading at this time last year. Having said that, many livestock farmers will not be mourning lower arable prices because this should reduce the cost of supplementary feedstuffs. This will be particularly welcome to dairy farmers in this area, thereby demonstrating the diametrically opposite affects that arable prices can have on different sectors of the farming industry.


James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Permitted Development Rights

As many farmers may be aware, from 30th May this year the government introduced new “permitted development rights” for the change of use of agricultural buildings to a range of commercial uses.

“Permitted development‟ is development which benefits from a “blanket” planning permission granted by parliament through the Town and Country Planning legislation. As a result certain changes in use of agricultural buildings will no longer require planning consent to be granted by the Local Planning Authority (LPA).

The new permitted development rights allows an existing agricultural building, and any land within its curtilage, to change use to a “flexible” use falling within a variety of commercial uses including, shops, restaurants and cafes, offices, light industrial, storage and distribution, hotels, guest houses and leisure facilities such as a gym. As one can see this covers a broad range of uses and opens up significant opportunities for farmers.

As one can imagine however, there are conditions and limitations imposed on these rights. The most significant restrictions are that the cumulative area on which the change of use takes place must not exceed 500 square metres on the “original agricultural unit”, the building involved is not listed and must have been in solely agricultural use since 3rd July 2012 or for buildings brought in to agricultural use after that date they must have been in agricultural use at some stage during the previous 10 years.

After a building (or site) has changed use its “planning status” will be that of sui generis. This means that the building (or site) will not benefit from any other permitted development rights. This is significant because at the same time as these rules were introduced, a similar permitted development right was introduced which allowed the change of use from office to residential use. Accordingly this prevents one using a series of permitted development rights to convert an agricultural building in to a house for example.

There is a requirement to notify the LPA of any changes of use and the detail which is required depends upon the scale of the change, being simpler for changes of up to 150 square meters and more complicated for changes between 150 and 500 square metres. However in either instance making the notification is a far simpler and cheaper process than would otherwise be the case if a full planning application was required.

The LPA then has 56 days to either come back for more information on issues such as transport, noise, contamination or flooding and if the LPA has not made a decision within 56 days the change of use can proceed. If a prior approval application is refused, the applicant has two options - either to appeal the prior approval refusal to the Planning Inspectorate or to submit a full planning application.

This is of course only a summary of the rules and if anyone is contemplating exploiting these new rules they are well advised to take professional advice. However, what is clear is that these rules do represent a great opportunity for some farmers to diversify their business without the hassle, cost and delay of gaining planning consent for what in many instances is an entirely sensible and non controversial alternative use.



James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk

Harvest is comming

As we bask in this beautiful weather many farmers’ minds are turning to harvest. The winter barley is just turning and despite the hot weather, harvest is likely to be several weeks later than usual. However, this is much needed sun which will hopefully help fill out the heads of corn which last year simply did not develop properly because of the lack of sunshine.

Those livestock farmers who are growing maize will also be delighted to see the good weather because most of the maize went in very late and was slow to germinate and grow. In early July maize should be about knee high but many crops I have seen around here are well short of this but provided the sunshine continues it should grow by several inches a day and so there is hope that even the late sown crops will produce a sensible yield later this year.

However, some winter sown crops in particular look very poor and patchy due to the wet weather last year which meant that establishing a seed bed was nigh on impossible and so it is anticipated that in general crop yields will be down. Indeed those farmers who held their nerve and did not attempt to sow crops in difficult conditions last autumn may well have made the correct choice in waiting until the spring to sow the fields.

The disadvantage of spring sown crops is that they generally yield less than autumn sown crops and are therefore less profitable although input costs in the form of fertilisers and sprays also tend to be a little lower which helps underpin the bottom line to some extent.

But, there were plenty of farmers who did not hold their nerve last autumn who have some very poor crops in the ground. In some cases the extra costs that have been spent on re-sowing all or parts of their land will simply have not been worth it and they would have been better to spray the crop off and leave it fallow for the season in hope of getting a seed bed established in good time this autumn rather than throwing good money after bad.

So, although this spell of good weather is welcome, the aftermath of last year’s appalling weather is still to play itself out in what is likely to be a poor harvest this year with winter cereal and oilseed rape yields down sharply in particular.



James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk