In the first six months of 2017, land values dipped, only stabilising towards the end of the year, averaging £8,972 per acre across England and Wales by Q4. Many potential vendors delayed bringing their farms and estates to the market, waiting instead for further clarity on Brexit negotiations and how leaving the EU will impact on the sector.
We are only in the first few weeks of 2018 and already there have been some significant developments with key legislative announcements. On the back of last year’s Clean Growth Strategy, the government has published a 25-year environmental plan, highlighting a new British Agricultural Policy. This is set to include new environmental land and management schemes, new rules on water use by farming, better soil management and use of fertilisers as well as targets to reduce air and water pollution generated from the industry. The plan covers wildlife habitats, tree plantations, basic principles for development, flood management and a number of other key areas integral to the rural economy. However, despite these ambitions, the plan lacked clarification of how these targets will be met.
January also saw the Secretary of State for Environment, Food and Rural Affairs, Michael Gove, speak at the Oxford Farming Conference. Gove made a welcome commitment to the Basic Payment Scheme continuing until 2024. Addressing the rapid developments in the sector, currently being driven by environmental imperatives and advancements in technology, he stressed the significant cost of resisting change, “to preserve what we cherish in the countryside we need a more efficient, focussed and innovative approach”. Setting out four key areas for change, Gove provided a valuable insight into his long term goals for the sector. These include a coherent policy on food; equipping farmers and land managers with adequate training and the tools to adapt to change; an alternative method of providing financial support to farmers, moving away from what he considers to be inefficient subsidies; and building a ‘natural capital’ thinking into our approach to land use and management.
Whilst Gove’s comments were broadly welcomed, it is still unclear as to whether Basic Payments will continue at their current levels. He remains committed to a scheme that moves away from the volume of land owned and instead focusses on owners whose businesses are designed to benefit the environment, including planting woodland, returning cultivated land to more natural states and providing services for community benefit.
We continue to help prepare our clients for change, identifying the most sustainable and profitable strategies for farm businesses and estates.
This continues to include diversification options and advising on subsidies in the current framework. Our specialist valuation team has been particularly active with re-financing and succession planning opportunities.
The Rural Division of Carter Jonas has continued to expand in 2017, particularly in the south West (increased staff in Marlborough, Taunton and Truro) and also in Birmingham where we have specialist teams advising on major infrastructure projects.
In early 2018 Carter Jonas will be running its usual series of Farms and Landed Estates seminars, this year with the theme of “Preparing for Change”.
We will continue to work with key membership organisations to ensure the immense contribution farmers and landowners provide to the economy is recognised. We believe with the right strategy, the rural economy can thrive outside of the EU and we are looking forward to maximising all opportunities for our clients.
Head of Rural Division