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CAAV News - 2020

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Jeremy's Blog 25/9/2020: International Risk

25 September 2020

This article by Jeremy Moody first appeared in the CAAV e-Briefing of 24th September 2020

Agriculture is remarkable as a sector of small businesses exposed directly to international economic markets.  We are used to the influence of exchange rates on farm earnings, as so many produce commodities for what have become global markets.  The £/€ rate for produce and subsidies has explained much of the movement in farming incomes.  The oil price and dollar movements are revealed in fuel and other bills.  It also flows the other way: the 2010 wheat price spike and associated trade restrictions drove the Arab spring.

While the UK wheat price is reacting to the exchange rate and risks at the end of this year, we may now be looking at both longer term and deeper changes in global trading influencing our markets. 

The Covid-19 pandemic has shown the globalisation of disease.  Food and farm supply chains have been resilient but are now more likely to diversify for security.  We face other diseases from those like Xylella that beset trees to African Swine Fever, spreading among Europe’s pigs.  ASF has been devastating in China which has lost 100 million pigs with effects on the pork price.  Its pork stocks are said to be down to 100,000 tonnes when it eats 50mt a year with imports having wider consequences in meat and feed markets.    

Globally, finance is another factor reflecting the growing concern over climate change.  Investor pressure on fossil fuel firms over carbon is now spreading to other sectors, including food production in emerging markets.  With the impact on production of climate change, changing public tastes and sensitivities to risks with soil quality, biodiversity and water, there are reports of investors becoming more cautious or withdrawing.   Those investors, wanting to understand risk, will seek more disclosure and assurance from companies, as through the Task Force on Climate-related Disclosure, so drawing more attention to these issues.

Credit risks increase not only for emerging market producers of meat and dairy, but international produce brokers whose access to finance and so operations may be limited by banking regulations.

Such a re-appreciation of risk may make it clearer where the carbon cost or impact of meat production is highest and assurance is least.  For the UK, less directly affected by climate change than much of the world, an emphasis on production and environmental standards is needed for a high cost country to hold and win markets at home and abroad. 

NEW PODCAST on Renewing Telecoms Agreements

25 September 2020

Kate Russell reviews recent case law which sheds light on the correct approach to the renewal of telecoms agreements under the Electronic Communications Code in England and Wales.

Also available on AppleSpotify and Google Podcasts

Catch-up on previous episodes here

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 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.

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