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Jeremy's Blog 18/9/2020: The New Regime

18 September 2020

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 17th September 2020.

As the Agriculture Bill enters its final straight, ministers have talked of the next steps in creating England’s post-Brexit regime, stressing productivity as interlinked with “public goods”: “our natural resources essential for food production”.

A major series of statements and consultations are to come towards the end of the year with:

  • the plan for the coming schemes giving “further information on funding for the early years of agricultural transition period” and so some of the phasing out of BPS
  • a consultation on the delinking of BPS and lump sum payments
  • a consultation on regulatory enforcement.

Productivity grants are to assist investment in equipment, technology and infrastructure from 2021.

ELMS and schemes for animal welfare and plant health are to buy change to meet six aims from the 25 Year Environment Plan: “clean air, clean and plentiful water, thriving plants and wildlife, reduction in and protection from environmental hazards such as flooding, adaptation to and mitigation of climate change and beauty, heritage and engagement with the environment”.  Those being wider than Countryside Stewardship (for which farmers will be able to apply until 2023), a “stepping-stone” (“Sustainable Farming Incentive”?) towards ELMS Tier 1 has been mooted, perhaps for matters like soils and nutrients. 

ELMS Tier 1 is to be for environmentally sustainable farming, Tier 2 to buy change in land use and Tier 3 for wider scale landscape management and collaboration.  The latter two would be more geared to local priorities, perhaps following the Environment Bill’s Local Nature Recovery Strategies which may also inform planning policies and the use of biodiversity net gain.

So far as ELMS might pay usefully, that is the carrot, paying for public goods that are above the stick of the regulatory baseline which could rise.  The force of cross compliance will wane with BPS but much is in legislation.  Penalties may become more proportionate but standards may be strengthened and the consultation may review “other possible levers that we could use to encourage more effective industry compliance”.

Farmers will need advice: “I reiterate the Government’s view that expert advice and guidance is critical to the successful delivery of future schemes”.  DEFRA proposes to use the Bill’s ability to fund the provision of advice, guidance and other support.  40 tests and trials include this and “ways in which skills and qualifications in environmental land management can be improved” showing that advice “must be trusted, consistent, credible and cost effective”.

Metaldehyde to be banned from 2022

18 September 2020

The Government has announced that metaldehyde - most commonly used to control slugs - is to be banned for both commercial and domestic outdoor use from March 2022. Sales of metaldehyde will be prohibited after 31st March 2021. The statement by Farming Minister Victoria Prentis can be found on the GOV.uk website.

ICAEW Farming and Rural Business Conference 2020

18 September 2020

The Institute of Chartered Accountants in England and Wales is holding a virtual Farming and Rural Business Conference on 29th and 30th September 2020. The keynote speaker is Secretary of State for Environment and Rural Affairs, George Eustice, and the cost for non-members is £100+VAT. Details and booking are available via the ICAEW website.  

Welsh Government funding for the countryside

14 September 2020

The Welsh Government has made £7.4 million available for improving access to the countryside, investing in green infrastructure and improving sustainability. The funds will be awarded to National Parks, AONBs and Local Authorities. Further details can be found on the Welsh Government website.

Jeremy's Blog 11/09/20: Deal or No-deal?

11 September 2020

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 10th September 2020.

We are now 16 weeks to the end of the EU transition period.  If a deal is to be in place for 1st January, it needs substantial agreement by mid-October.   This week has highlighted the possibility that the negotiating mandates preclude a deal acceptable to both the UK and the EU.  Aside from fisheries, the major problems are understood to lie around the relationship between future UK rules and evolving EU ones, notably around state aid for business (with the Government anxious about the technology sector).  That could be overcome by political decisions in the next few days and does not exclude a deal next year or later.   Meanwhile, the Government is said to have modelled the situation where no deal coincides with a Covid peak and flooding. 

Separately, issues with the agreed framework of the Northern Ireland Protocol include:

  • the paperwork and potential tariffs for goods moving from Great Britain to Northern Ireland – 750,000 tonnes of feed grain, second-hand machinery from auctions and livestock medicines.
  • how “unfettered access” to Great Britain for goods from Northern Ireland might work while ensuring that the province is not a back door from the EU to the UK
  • the interaction between the rules for Northern Ireland and UK state aid.

The Government has now controversially proposed powers to help manage some of the issues.

No deal means tariffs: for wheat, £79/t on imports and €95/t on exports to the EU.   With a poor harvest but good milling quality, more barley, access to maize and some retention of flour that would go to Ireland, this might be less significant than it looks but some export trade might be brought forward.   Measures appear to be in mind for disruption to the lamb trade.

Previous deadlines saw much no deal planning.  That will not mean all issues have been identified or managed.  As before, it seems prudent for a farm or other business to think, for January and then the first quarter of 2021 what it would feel silly not to have done, from spare parts to sales.  Deal or not, tariffs or not, those trading with the EU will need to manage customs and other paperwork while issues may range from heat-treated pallets to containers with several consignments. 

It would be helpful for CAAV work with Government to hear from members where their work highlights possible practical challenges to business continuity.       

The Prince's Farm Resilience Programme 2020

09 September 2020

The Prince's Countryside Fund has opened registration for the Prince's Farm Resilience Programme 2020. The Programme enables family farm businesses to access free business skills and environmental training to help improve business viability. More detail can be found on the PCF website where there is a link to register interest in taking part.

£11.5 billion for affordable homes in England

08 September 2020

England's Housing Minister Robert Jenrick has announced £11.5 billion of new funding for affordable homes in England which is intended to deliver 180,000 homes in the period to 2026. The homes will be a mix of tenures, including a new Shared Ownership model and affordable rented property. Further information can be found on the GOV.UK website

CAAV adopts technology to drive agriculture’s future

07 September 2020

Embracing technological advancements will be a major element in progressive farming in the coming years, and the Central Association of Agricultural Valuers (CAAV) is arming its members with the tools to help. 

Speaking at the virtual CAAV AGM and conference on 3 September, incoming president, Andrew Thomas, said the end of this year will hail a big transition for the rural sector. “There are huge changes ahead for our members and clients, whether we end up on World Trade Organisation terms or an EU-UK trade deal is reached,” he explained. 

“The aim in the coming months will be to keep our members fully briefed so that they and their clients are ready to act whatever the outcome. Embracing new skills and technologies is a big part of the agenda as we need to be on the front foot to help farmers successfully transition towards a very different agricultural landscape.” 

Mr Thomas is the fifth CAAV president to hail from the South Wales and Monmouthshire branch and heads Herbert R Thomas, a multi-discipline company started by his grandfather. Having held several official CAAV roles over the years, he has extensive experience in the industry.

In the theme of embracing advancing technology, Simon Pearson, director of the Lincoln Institute of Agri-Food Technology, addressed the conference on robotics in farming. “Agri-robotics will be transformational,” he predicted. “Agriculture is one of the hardest areas of robotics to work in because of all the skills the robots need to perform just one task, but there is lots of research going on.” 

Advancing technology is also prevalent in the form of genetic improvements, as Jonathan Clarke, head of business development at the John Innes Institute, explained. “Technology is one of the tools to advance our research in genetics, genomics and plant growth. There is a new revolution coming, driven by two key changes; the ability to be precise and a rapid acceleration in producing new crop varieties.”

The role CAAV members play in informing clients on industry changes like these is a vital one, added Mr Thomas. “Our breadth of knowledge and continued professional development means we are ideally positioned to support the industry during these challenging times.”

Sharing knowledge among agricultural professionals is an important element to drive the industry forward, said Lee Baker at AMC, chief sponsor of the event. “In 24 years of sponsoring the conference, there has never been a year quite like 2020, but it’s really important to continue to provide support for such a dynamic industry and be a part of its future progression.”

Helping with this progression will be Andrew Coney, partner at P Wilson and Co, in Preston, Lancashire, who served several roles within the CAAV before taking on the role of senior vice president. “I look forward to working as part of the presidential team and with them I will continue to represent, promote and develop the CAAV for the benefit of its membership,” he said.

Incoming junior vice president, Simon Alden, is a director at Adkin in Oxfordshire and is an RICS registered valuer. “The CAAV has shaped my career, from the rigorous training to the outstanding technical information and support it provides,” he said. “I am honoured to serve as part of the presidential team and in particular I am looking forward to visiting local associations when that is allowed to happen.”

Up and coming young valuers were also recognised at the AGM, with the prestigious Talbot Ponsonby prize for the highest marks in the CAAV exams awarded to Annabel Hollis. Hailing from a family farm in Staffordshire, Ms Hollis has been a keen member of young farmers and attained a first-class honours in Rural Enterprise and Land Management at Harper Adams University, and a masters in Law from the University of Law, Birmingham. This autumn she will begin a two-year training contract at Michelmores in Exeter.

NEW PODCAST on Tomorrow’s Business – Land, Valuation, Technology and People

07 September 2020

Tomorrow’s Business was the theme of the CAAV’s first ever Virtual National Conference. In this episode, Jeremy Moody shares the highlights from the conference and summarises the key points from each of the speakers.

Also available on AppleSpotify and Google Podcasts

Catch-up on previous episodes here

Jeremy's Blog 3rd September 2020: Farming Productivity and Business Change

04 September 2020

 
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 3rd September 2020.

Most of farming faces the same economic problems as it faced before the pandemic.  The poor harvest emphasises the concerns about poor cash flow as farming goes into 2021, facing whatever may come as the EU transition period ends.
 
That draws attention to the long run issues of poor profitability and productivity growth that might now be tackled more effectively.   Recent DEFRA data show that barely half of cereals and grazing farms achieve £100 of outputs from £100 of inputs, even including subsidy, agri-environment and other income.  Without those, the bottom quartile of grazing livestock farms turns that £100 of inputs into £47 of outputs; with them it is £73.  Annual productivity growth since 2000 is reported as fallen to 0.7 per cent.
 
Averages (even of quartiles) mask wide ranges of real performance.  On a larger view across farming where subsidy seems associated with poorer profitability:

  • 35 per of UK output by value is from sectors with negligible or no subsidy
  • 33 per cent of output by value is from sectors for which Basic Payment is 6 or 7 per cent of produce sales. 

The CAP’s historic role as a corn and horn policy leaves subsidy focused on that remaining third of value but most of the land area, perhaps implying future questions about the balance between farming and land management. Nonetheless, in all sectors and areas, good farmers have much better performances, turning on skills, management and timeliness. 
 
Existing regimes have managed decline to the present point with area-based payments since 1993 holding back the economic change that might remedy this, including access for new entrants.  The number of farmers has reduced as the logic of commodity production sees remaining income divided between fewer people and so fewer opportunities for challenge.  The phasing out of BPS in England is at the centre of a generation’s change concentrated into the coming decade.        
 
With the question being who will farm what land how, the challenge is to make that change positive, achieving good businesses winning and holding better margins in tomorrow’s markets, probably with more looking beyond commodities.  Something will lie in the design of new schemes, more in other policies.  Alongside improving skills, investment and innovation, we need wider markets in land occupation and use; the further positive evidence from Ireland’s Income Tax relief for letting farmland shows one way to change the game.  Openness to business change is one pre-requisite for a positive answer to the real challenge.

Jeremy's Blog 27/8/2020: Valuations under the Electronic Communications Code

28 August 2020

With the long, fraught arguments over telecommunications masts, the last fortnight has doubled the number of Tribunal decisions on valuation, developing a picture of what Tribunals consider to be the main arguments.  CTIL v Fothringham (in the Lands Tribunal for Scotland) follows EE v Islington in considering the rent for a new Code agreement.  Vodafone v Hanover considers the rent on the renewal of a lease protected by the Landlord and Tenant Act 1954 (CTIL v Ashloch having decided that such renewals are under the Act, not the Code).  The Tribunal’s comments in CTIL v Compton Beauchamp cast light on methods of tackling the Code’s statutory valuation requirements.

While the eye is naturally drawn to the rents awarded in the three cases that did so, this note offers some brief initial observations on the underlying messages which may frame future work.     

One understanding is to see these decisions as about value, not price.  The negotiations before December 2017, almost untouched in practice by the old Code, may have created a sense that a 15m rural mast was likely to have a rent of £5-6,000, more or less a standard price.  These Tribunal decisions are more specific to the site and circumstances of each case: changes in those may give different figures.

The agreement’s terms have to be settled for it to be valued.  Its handling of the site provider’s costs and any compensation for potential loss or damage is likely to matter.  The more that the site provider has recourse under the agreement (or a Tribunal awarded the Code agreement), the less the issue might for the rent.  Hanover also turned on the 10 year term and lack of a rent review provision.

The nature of the market for the site matters.  That is not just its existing or alternative use value; Hanover shows that evidence of competing interest from operators could be relevant.

The Tribunal is interested in the nature and behaviour of “willing” parties, especially a “willing seller”.  Evidence of the impact on a site provider of an operator on site is potentially material for both Paragraph 24’s valuation of the agreement between the parties and a market rent on renewal.   The operators’ “pro rata” approach has been consistently rejected, notably in Compton Beauchamp and Fothringham; deriving a nominal value from large transactions is not seen as credible. 

While the mists might seem to clear a little, new cases see increasing contention over experts and appeals are expected on Compton Beauchamp and Ashloch.  We might not be clear of storms.

Covid-19 ban on evictions in England extended by 4 weeks

21 August 2020

The Government has extended the temporary ban on evictions from dwellings in England, which was due to end this Sunday, by a further four weeks and introduced a new requirement for notices to be at least 6 months in duration. Further detail is available on the GOV.UK website.

Jeremy's Blog 21st August 2020: The Use of Algorithms

21 August 2020

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 20th August 2020.

Algorithm – a set of rules to be followed in calculations or other problem-solving operation.
 
While as simple as that, a word more used in computing than the pub has been thrust into daylight by the attempt to give examination grades without holding examinations.  An algorithm is simply a tool, depending on how data are selected and assumptions about how they are handled.  It can only be as good as those factors allow; it is not magic.
 
Algorithms are everywhere, especially with the growing reliance on digital systems and are increasingly met in professional work.  Automated Valuation Mechanisms are one example, whether for mass valuations as for local taxation or conventional residential mortgage lending.
 
Such systems can seem a “black box”, risking giving weight to an answer when we might not know how the data are selected or handled to give an answer.  The answer, whether property valuation or examination grade, is no more or less impressive than those issues – and not just to be given credit because it is a “black box”.
 
The problems with this year’s examination grades, hidden in complexity, seem to have included that they:

  • were based on schools, not actual individuals
  • did not take enough account of the detail of GCSE data
  • gave more weight to teachers’ views for small groups with their greater statistical variation
  • meant a really good pupil could not escape a school that had performed poorly.

As a statistical exercise, the arithmetic could perhaps even be right overall but not right for individuals and bedevilled by lack of transparency.
 
With property:

  • automated property valuations might, with the right data, be fair overall for a portfolio but with wide variations at property level.  A lender with a large book might feel supported; an individual borrower might feel at risk.
  • the Scottish discussion of a budget-based approach to farm rent reviews has looked for a mechanical process of arithmetic when they require appraisal and judgement, not formulae imposing answers on varied situations. 

 
Just because an answer comes from a computer does not make it right.  Whether using such answers, commenting on them or advising clients about them, we will need the skills and confidence to be clear about how they are achieved and the common sense to see where they do not work.  Possibly servants, they are neither magic nor masters.  The same sense check is needed as for a valuation.

Jeremy's Blog 13/08/20: A Radical Shock for Planners?

14 August 2020

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 13th August 2020.

The proposals in the two planning consultation papers issued last week for England appear to be a genuinely radical shock for the system.  They go much further than the zoning proposals of the headlines, shaking the 70 year old foundations of planning and what local planning authorities do.

Focussed on housing, rather than other development, the force of the proposals lies in their approach to housing demand.  With 300,000 new dwellings a year seen as needed since at least the 2004 Barker Report, the Government would now set binding housing numbers for each LPA, when local plans currently provide for some 187,000 and last year saw some 241,000 built (including those under permitted development rights).  That is a substantial increase in the numbers to be provided for.

Allocating that between LPAs is now to take significant account of house prices – the market’s barometer of demand and so where would-be occupiers would like housing to be.  The current system has been criticised for disregarding that, so adding to the affordability problem requiring more counter-measures.

The measure used for this will be house prices as a multiple of incomes of those who work in each area in question.  Where this multiple is more than 4, that will lead to more houses being expected to be provided.  That will be the case for large areas of the country. 

Those figures will drive the areas that each LPA will have to identify in its new local plan as Growth, Renewal and Protection areas.  It is not suggested that the figures will be for substantive argument though interesting to see how LPAs will approach the politics of selecting Growth Areas.  With legislation and then 30 months for plan making, that suggests the new regime might just be in place in 2024.

In at least Growth Areas, that zoning will be the planning permission for all development that meets the design requirements that the LPAs will set, drawing on the work of the Building Better, Building Beautiful Commission.  That will be their new role, not deciding permissions.

Finally, CIL and much of s.106 obligations are to be replaced by a nationally-set Infrastructure Levy on the final capital value of the development before occupation above threshold to protect lower value development.  We wait to see how this might fit with biodiversity net gain.

This is the start; we wait to see how well that structure survives the reaction.

England: Planning White Paper 2020

06 August 2020

The Government has published its planning White Paper: Planning for the Future. A public consultation runs until 29th October 2020. 

England: The Getting Building Fund

04 August 2020

The Government has released details of hundreds of projects which will be supported by the £900 million Getting Building Fund in England, including housing development, regeneration schemes, education and healthcare projects. The projects will be delivered through LEPs and details can be found on the GOV.UK website.

Secretariat - Alice De Soer

31 July 2020

Alice De Soer is leaving the Secretariat at the end of Friday, 31st July. 

We thank her for her work in that capacity over the years, for which she was recognised by the award of the CAAV’s Kenneth Glenny Prize in 2015, and wish her well for the future.

Calls and e-mails regarding her work areas should come to the Secretariat at Harts Barn Farmhouse.

Consideration is being given to the skills and dispositions that might now be needed in the Secretariat.

 

Jeremy's Blog 30th July 2020: Agricultural Policy in England

31 July 2020

Jeremy's Blog 30th July 2020

The New Agricultural Policy in England is Coming

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 30/7/20

The reality of the new English agricultural policy, outside the EU, is imminent.  Ministers are adamant that the first cut in Basic Payment will start the transition period in 2021, seeing new policies phased in.   With more detail promised in an autumn statement, that seven year process was again outlined in the Government’s replies to the House of Lords Committee stage on the Agriculture Bill.   That reality, with much other prospective change, underlay the CAAV’s successful Business Review event on Monday.

 

DEFRA Minister, Lord Gardiner, set out the basic argument:

“While direct payments currently form an important contribution to income on many farms in England, we believe that they can hamper productivity growth in the agricultural sector. That is why, within the sum that will be released, that money will be diverted into countryside stewardship and productivity grants so that farmers can start, through their business interests, to take advantage of the money that will move from direct payments into these other areas of support.”  (House of Lords, 21st July, Cols 2083-84)

From 2021 productivity grants will aid equipment or infrastructure, adding value to existing products, creating new products or making products available directly to customers.  ELM and other schemes follow later.

 

Basic Payment is itself to change.  All greening, with crop diversification and EFAs, is now dropped for English 2021 applications with the money added to the Basic Payment.   Created as an environmental justification for the Basic Payment, essentially bearing on arable farmers, EU auditors reported in 2017 that “As currently implemented, it is unlikely to enhance the CAP’s environmental and climate performance significantly”, or justify the significant complexity added to the CAP.  England’s environmental emphasis is on Countryside Stewardship and the prospective ELM policy. 

 

Basic Payment is time-limited for England.  Lord Gardiner told the Lords that:

“When delinked payments are introduced, they will replace the current basic payment scheme entirely and for all farmers. The basic payment scheme and delinked payments cannot and will not coexist. … we may wish to move away from the current approach of making a single payment per year and issue payments more frequently instead” (21st July, Cols 2085-86)

 

Elsewhere, elections will see legislation for Wales after 2021 and for Northern Ireland after 2022.  Scotland, seeking to stay close to EU policies, may now consider whether it too will drop crop diversification.

 

With these changes now moving, businesses need to prepare.

National Food Strategy - Part One

29 July 2020

Part One of the National Food Strategy has been published and can be found at https://www.nationalfoodstrategy.org/

Jeremy's Blog 23rd July 2020: Environmental Policy

24 July 2020

Jeremy's Blog 23/07/2020

Environmental Policy

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 23rd July 2020

George Eustice, DEFRA Secretary of State, has consistently argued that the opportunity of Brexit is to “do policy better”.  As developing post-Brexit policies and the emerging post-Covid policies blend, he has now set this argument out for environmental policy.  Those concerned with the management of rural land should see the scale of the ambition for such issues as biodiversity, water quality and air quality.

Seeing the policies inherited from the EU as focused on preservation and protection, even the management of decline, he offered a new emphasis:

“But there is no point leaving the EU to keep everything the same. The old model has not stopped the decline in our natural world. We must therefore challenge ourselves to think creatively, to innovate and to consciously avoid clinging to processes and procedures just because they are familiar. On environmental policy, we can do better or differently …”

Still within the same high-level international conventions as the EU, the UK could now develop policies directly tailored to domestic circumstances, not compromises haggled in the EU’s Council of Ministers.  It need no longer be cautious about the legal risks of new initiatives or approaches as when trammelled by supra-national legislation, Commission supervision, EU auditors and penalties.  No longer able to hide behind EU law, this freedom to act would bring new responsibilities.

The ambition is that:

“if we really want to realise the aspirations that the public have for nature then we need policies that will not only protect but that will build back – with more diverse habitats that lead to a greater abundance of those species currently in decline”

with this change lying at the heart of the new farming policy, biodiversity net gain in planning and other initiatives.

With the Prime Minister’s “build, build, build” speech criticising “newt counting delays”, George Eustice proposed at least for England:

  • establishing “an accurate, centralised body of data on species populations”
  • then setting out which habitats and species were “off limit” and
  • “front load” ecological considerations into the planning system in a changed approach to environmental assessment and mitigation in the planning system.

The Environment Bill, with the Office for Environmental Protection, also brings the opportunity to set our own definitions of such international standards as the precautionary principle.  Such decisions, challenging the status quo, will frame policies, opportunities and land management for a generation.  This is definitely a space to be watched.

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