2015-12-29  

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Farming Year Round Up from H&H Land and Property

Tim Parsons, Director of Carlisle and Durham Based H&H Land and Property gives a round-up of the year and a glimpse of what 2016 possibly has to offer.

One of the big story’s of the year was the failure of the Rural Payments IT system which was just one feature of the new Basic Payment Scheme which the industry has found sadly wanting.

Tim Parsons

Tim Parsons

Changes to rules led to unprocessed amendments to the Rural Land Register. “Greening” made claims complicated with few benefits. The new Countryside Stewardship Scheme had no “Entry Level”.

Higher Tier applications were up and Mid-Tier applications were seriously down in numbers. Verification and record keeping requirements have made things difficult, and upland farmers found it impossible to put together a Mid-Tier application that was competitive and generated sufficient payment. Only a tiny percentage of farmers have applied for Countryside Stewardship. Guidance was still being issued in the week before the application deadline, making the building of a competitive application difficult.

2016 sees the launch of 1-year Boundary Restoration grants for walls and hedges, but the application process will be competitive. The Expression of Interest process for Higher Tier is likely to be brought forward. Everyone hopes the Mid-Tier will be made more accessible to smaller upland farmers.

New Ecological Focus Areas [EFAs] and crop diversification rules have raised problems. And the strong £ has affected BPS payment rates. Many will also lose money from ELS schemes coming to an end. Next year back payments are due to many common land SPS/BPS claimants; however we expect delays while issues are solved.

On a positive note for those selling, as there are fewer Entitlements around to trade, they will probably achieve a higher price this year.

Low commodity prices have dominated. The FAO Food Price Index hit its lowest index since 2009. By September, milk prices stood at an average of 23.61ppl, down 7.07ppl. Lamb was at its lowest level for 6 years with an average of 339.6ppkg, down 64p from last year.

However, there have been large harvests for many, and store cattle, store lamb, and calf prices remain reasonable. TB has continued to have an effect on farmers.

Low commodity prices will probably persist with dairy farmers expected to lose an average 3ppl. High lamb production will remain, but a strong £ makes an attractive market for importers so prices will potentially stay low.

DEFRA’s 30% Budget cuts may threaten our preparedness for a disease, affecting health and welfare, and the reputation of UK agriculture. It will also be interesting to see if they adversely affect deliver of schemes such as BPS still further.

In Planning, Class Q Permitted Development Rights makes change of use of farm buildings easier, but County Durham’s suspended Spatial Development Plan has created uncertainty. Developers who have deliberately concealed a development from the Planning Authorities will no longer escape prosecution after the expiry of the permitted time period.

August saw the nationally imposed 10 unit threshold for affordable housing quashed in the High Court, but the government has introduced its new starter homes National Policy.

In 2016, there will be National Park Extensions, and “development in principle certificates” will arrive, together with the duty on council’s to register brown field land. All planning authorities must have Local Plans in place by 2017.

On the property market and lettings, the slow supply of land on the market kept demand high in the spring and summer and prices stayed strong and buoyant. However by autumn the signs of the general agricultural industry slowdown were showing.

Now we are seeing land sales becoming more selective. Quality land still appears to sell well, however the more marginal land is proving more of a challenge.

To ensure that optimum value for land sales is achieved, we cannot reiterated enough how important local knowledge of an area is.

Scotland continues to look excellent value for money compared to south of the border, with some excellent, well-equipped holdings on the market.

Supply of accommodation land and farms is likely to increase from spring 2016, and there will be opportunities for expansion. Potential purchasers need to assess their funding opportunities through lenders. We have still seeing a keenness to lend for the right well thought out proposals.

On the other side of the fence, those considering selling should prepare in good time. A well-presented property maximises the potential market.

The impact of Storm Desmond has caused devastation to many parts of the North West, particularly Cumbria, for the second time in 10 years for many.

Flooding similar to the 2005 floods in Carlisle and the 2009 events in Cockermouth, and the west of the county, has affected many. The obvious focus is on the towns and cities but likewise many rural areas and farm businesses have also been badly affected. In the aftermath there will be much support needed for some to not only repair the physical effects of the storms on property and stock, but also the psychological impacts. There are a number of initiatives and grant funds being established to support farmers and rural areas, and we at H&H Land and Property are helping where we can with advice and guidance. The farming community is a resilient one and recovery will come, albeit it may take some time, work and effort.

Looking forward to 2016 our aim is to support our farmers and rural business through some challenging times to ensure that they maximise their potential in all areas.

HH Land

Related Links
link First Insight for Scottish Farmers into BPS Entitlements
link Craig Brough Joins the CLA Agriculture and Land Use Committee
link George Dunn Completes 5 Years as Chairman FCN
link Farmer Mounts Battle in Bid to Save Livelihood