Jeremy's Blog 24th December 2021: 2021 Review and Predictions for 2022
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 22nd December 2021
2021 has been a step in major processes of change with both post-Brexit policies and the pandemic. All parts of the UK have re-written inherited EU law. DEFRA’s replacement of Basic Payment with environmental management and productivity measures is now firmly underway. The Environment Act now frames the Agriculture Act, making environmental improvement a key government policy, alongside climate change mitigation and adaptation – politically uncontentious goals. Scotland is building its farm and rural land policies to answer climate change, Wales for sustainable land management and Northern Ireland now for Green Growth. In all, the regulatory baseline will rise – for water, sprays, welfare, …
England’s Agricultural Transition is just that. George Eustice has described how each farming business is to make its own business decisions, choosing which, if any, of and to what extent the new schemes suit or how else to develop, adapting with the remaining support. Business will need to find, win and hold commercial margin – that is the productivity challenge perhaps further stimulated by trade deals.
With these changes, a key question is what land best does what? Farming now faces new competition for land use with leading comments that:
- 60 per cent of the value of produce comes from 8 per cent of the land (George Eustice)
- 20 per cent of our land produces 3 per cent of our calories (Dimbleby Report)
Commercial forestry is now competing more strongly with lower value farmland, not for offsetting but to sell timber into tomorrow’s low carbon economy. Environmental offsetting markets such as biodiversity gain and nutrient neutrality are developing, relying on regulation and agreed measurements. It will matter whether this asks for a service or buys an asset. Selling rights in the farm to carbon may offer little value even with the current volume of green money, and much restriction but managing the farm for low carbon may be required by supply chains and improve the business – reduction will be seen as better than offsetting.
Produce prices might generally remain strong as would input costs, notably fertiliser, while the Omicron variant looks to disrupt domestic and international supply chains again. Beyond our shores, an unsettled world sees restless powers and populations under pressure from energy, food, water and climate change. Here, the pandemic has accelerated change in technology, property and employment, giving new value to resilience.
Proposed Electronic Communications Code legislation further challenges property rights as, more widely, is seen for tenancy law or holiday lets in response to pressures in housing markets. England’s housing policies are back on the drawing board. The focus on energy efficiency and standards has just seen the Scottish Government say:
“It is essential that property owners accept responsibility for their share of the cost of work needed to look after their property and to preserve it as a sustainable asset for the future.”
Clients facing change and challenge need good, dispassionate rounded advice, willing to look apparent gift horses in the mouth – the agricultural valuer’s role.