The Longer View

Yield mapping allows farmers to understand what is going on in the field, identifying areas that are under performing, over performing or average. Jon Birchall, Carter Jonas’ director of agribusiness wants to embed new ideas and new technology such as yield mapping into his role, bringing smarter and more efficient ways to identify where problems might lie, and the best ways to address them.

Read the full article here.

In recent weeks, DEFRA has been consulting with industry stakeholders on proposals for agricultural tenancy reform in England and Wales arising from the draft Agriculture Bill and recommendations made by the Tenancy Reform Group (TRIG). The proposals primarily impact upon farm tenancies held under the provisions of the Agricultural Holdings Act 1986.

The key drivers to policy change are the phased withdrawal of direct production support (the Basic Payment scheme) from 2021 with a transition to environmental support representing “public goods for public money” and improving agricultural productivity in anticipation of Brexit and new trade arrangements.

Between 1964 and 2019 UK agriculture’s productivity has increased by less than 1% per annum whilst Holland has achieved 3.5% and France and Germany 2%. When compounded over 50 years the variance in performance is stark.

Agricultural tenancy legislation has, since 1947, been reviewed approximately every ten years to react to market changes, the most significant being the Agricultural Tenancies Act 1995 which introduced flexible Farm Business Tenancies which sought to free-up a market paralysed by security of tenure granted to existing tenants.

The tenanted sector still represents 1/3rd of the total agricultural area of England and Wales so it is essential that this should continue to thrive for the benefit of both landlords and tenants and the industry. Tenancies under the Agricultural Holdings legislation with security of tenure potentially for two generations still account for approximately 15% of agricultural land with over 20,000 individual holdings.

• Consultation has focussed on a variety of proposals to improve flexibility of occupation to encourage and increase productivity including:
• Changing farming and occupancy structures by removing legal barriers
• Encouraging a retirement strategy enabling farms to be handed down to the next generation
• Providing rural housing solutions for retirement. A farmhouse within a secure tenancy remains a cheap home encouraging tenants to remain for their lifetime
• Introducing capital taxation changes to encourage flexibility of occupation
• Retaining landowners confidence in the let sector to encourage capital investment

Proposals for structural change include:

1. The introduction of assignable Agricultural Holdings tenancies but at a market rent with the opportunity for the landlord to buy out the tenant’s interest to secure possession
2. Amending tenancy succession eligibility provisions to encourage earlier retirement with a bar on succession five years past the state retirement date
3. Varying the commercial unit and suitability tests to encourage higher standards and business experience
4. Widening the definition of close relatives eligible for succession to include nieces, nephews and grandchildren of the tenant

Proposals for productivity enhancement include:

1. A relaxation of restrictive user conditions to facilitate diversification
2. Ensuring that landlord’s investment in capital improvements is excluded from rent review considerations safeguarding an appropriate period for a return on investment
3. Enabling shorter notice to quit provisions in specific circumstances (for example non-payment of rent and development) linked to longer term Farm Business Tenancies.

The concept of introducing assignable tenancies for value has been greeted with concern by landlords who see this as a further restriction on their opportunity to secure vacant possession when a tenant dies. However this may be an over-reaction particularly for long term landowners such as the institutions who are long-term land holders who seek a secure and growing income from their investment. The proposals provide for a market rent to be paid (effectively a Farm Business Tenancy rent) and limit the term of the tenancy to 25 years without further succession or assignment opportunities. Alternatively a landlord will have a first opportunity to buy the tenant’s interest providing the tenant with some funding towards retirement. Whilst the prospect of a landlord paying a capital sum to achieve possession may not be welcomed by landlords the resulting valuation may not be as high as first envisaged.

The basis of assessment is a capitalisation of the profit rent for the length of the new tenancy. However with an “open market” rather than “sitting tenant” rent the profit margin will be squeezed particularly if a farmhouse and cottages are included. Market rent will also drive efficiency and productivity by the new tenant.

Consultation responses are sought by 2 July 2019. A summary of responses will be published before the end of the year with an intention to seek parliamentary time for debate and legislation within the next three years.

All those involved in the sector are encouraged to contribute to ensure a balanced response. Carter Jonas have taken an active involvement through representation on professional bodies (CAAV/RICS) and support the objectives to improve agricultural productivity whilst protecting the environment, subject to appropriate protection of the parties’ interests.

For further information, contact Simon Pallett, Chairman (simon.pallett@carterjonas.co.uk / 01962 833369), or your local Carter Jonas office.

Following Natural England’s snap announcement to revoke three general licences for controlling certain wild birds at the end of April, which followed a legal challenge by the Wild Justice Group, DEFRA has now issued three new general licences.  These represent a significant improvement on those urgently issued by Natural England in the immediate aftermath of the previous ban.

In simple terms, the original general licences allowed people to shoot 16 species of common birds, which are regarded as pests for one reason or another, without needing to apply for an individual licence to do so.  These species include crows, magpies, rooks, jackdaws and jays, feral and wood pigeons, and some “invasive non-native species” such as Canada geese. 

Many farmers, landowners and gamekeepers will welcome the issuing of three new general licences,  although it will be important for those that wish to rely on them ensure the licence covers the particular situation where it is envisaged shooting will take place and that they comply with the licence conditions and restrictions.

The three new licences cover the following circumstances:

General licence 34 – To kill or take certain species of wild birds to conserve wild birds and to conserve flora and fauna

General licence 35 – To kill or take certain species of wild birds to preserve public health or public safety

General licence 36 – To kill or take certain species of wild birds to prevent serious damage

Defra has released additional guidance on these general licences, which includes an extensive FAQ for licence users and a decision tree to help people understand which licence is suitable for their needs.

Whilst not a legal obligation, the licences recommend that those relying on them keep records of their actions.  Therefore, to ensure anyone is in a strong position if ever called upon to defend their actions it is recommended that up to date records are kept of what has been shot, where, when and why.

The list of species covered is not exactly the same as before but it covers most of the same species including those already listed above.  If anyone is in any doubt, they should check the species listed under the licences in detail.

One other significant point is that the general licences do not cover shooting over European Protected sites such as Special Protection Areas, Special Areas of Conservation or Ramsar Sites although Carrion Crows, Wood Pigeons and Canada Geese can be shot on these sites under the general licences Natural England issued in the immediate aftermath of the ban. 

In all other circumstances, those wishing to shoot over European protected areas and on Sites of Special Scientific Interest will need to apply for individual licences from Natural England.

Therefore, it seems that what Wild Justice has achieved is significant disruption and additional paperwork for both government and the shooting community, but with limited practical impact on what bird species can be shot under general licences.  However, the fact that Wild Justice is taking further legal action against DEFRA, in relation to their latest general licences, seems to demonstrate that their real aim is to ban game shooting, which takes us in to a whole new area of political debate.

For further information, contact James Stephen, Partner (james.stephen@carterjonas.co.uk / 01823 428860), or your local Carter Jonas office.

On 4th June 2019, the National Audit Office published their early review of the new farming programme, the DEFRA-led overhaul of post-Brexit agricultural support.

The review provides an insightful timetable into the proposed roll out of the new Environmental Land Management Scheme (ELMS), following the 2nd reading of the Agriculture Bill in October 2018; below is our summary.

The importance of the existing Basic Payment Scheme to the profitability of farm business is highlighted by the following statistics, and potential of the impact of the void that the ELMS is being designed to fill, albeit partially:

• 16% of farmers made a loss in 2014-15 & 2016-17, despite receiving direct payments.
• 42% of farmers would have made a loss between 2014-15 and 2016-17 if they had not received direct payments.

It has been well documented that the current Basic Payment Scheme (BPS) will be phased out over a 7 year period, starting in 2021 and ending in 2027.

DEFRA is yet to share which environmental benefits it will pay for, and has not yet given any information on payment rates under ELMS (it does not plan to set out its payments rationale until March 2020, and its payment rates until June 2020).

National ELMS pilots are due to start in January 2021 and run until 2024. DEFRA anticipates that 1,250 farms will sign up in the first year of the pilot, and that 15,000 farms will have signed up by the end of the pilot.

DEFRA anticipates that most farmers will not be part of ELMS until 2024, and plans to offer a simplified Countryside Stewardship Scheme until then. The final Countryside Stewardship agreements will start between 2022 and 2024. ELMS will be up and running by 2025.

Following the cessation of direct payments in 2027, DEFRA anticipates that 82,500 farm holdings will be participating in the new ELMS by 2028. This contrasts with just under 20,000 current Countryside Stewardship agreements in place, 4 years after they were first introduced.

The report flags a concern that the 10 year proposed transition period is too short and will not allow farmers to prepare and plan adequately. There is also a concern that DEFRA is yet to fully understand the impact of its proposals on agriculture and the overall economy through adequate scenario planning.

To find out more, contact Cameron Hughes, Rural Surveyor (cameron.hughes@carterjonas.co.uk / 01865 404441), or your local Carter Jonas office.