Fisher German Rural Newsletter January 2018

Fisher German Rural Newsletter January 2018




Redefining the Farmer

 
 

Britain has had a cheap food policy since the war, but the time has come to re-evaluate our priorities.  Pressure on prices has forced farmers to sacrifice ecological protection in the name of productivity. Government subsidies, while designed to encourage sustainable farming, have unfortunately failed to deliver tangible benefits to wildlife.

Individual trailblazers are creating new models of sustainable farming, but a complete overhaul of the subsidy system is needed to ensure that all farmers are required to deliver environmental services.  Brexit – while a threat to the protections enshrined in EU law – provides an opportunity to reset the balance, ensuring that British farmers are valued for their stewardship of the environment as much as for the food they produce.

Current subsidy system

Current ‘sustainable farming’ subsidies, under Pillar 1 of EU structures, consist of the Basic Payment Scheme (BPS) and Greening obligations. Under the BPS, farmers are paid a fixed flat rate per hectare, which varies between lowland, upland or moorland.  The Greening obligations, required for further payment, include the rotation of a minimum number of different crops (Crop Diversification), and the creation of Ecological Focus Areas.  In addition, Pillar 2 grants support the UK’ Countryside Stewardship scheme, aimed at maintaining areas of existing high biodiversity, such as limestone grassland or neutral meadows, or specific bird breeding habitats.

The BPS under which farmers are paid regardless of what they produce, providing the land is maintained as farmland, has failed to deliver, because it offers no incentive to engage in ecological protection.   Indeed, ‘non-qualifying’ features, wildlife-rich habitats such as ponds, wetlands and wide hedgerows, are actually deducted from the area for which farmers can receive payment; encouraging their destruction.

With respect to Greening, the rules for Crop Diversification contain many loopholes, while the Ecological Focus Area (EFAs) obligation is poorly specified; it does not enforce improvement, but allows farmers to claim for already existing ecological features, while catch-and-cover crop obligations have failed to improve biodiversity due to narrow restrictions on the species permitted and the duration that they are grown for.

Driving Innovation

Ironically, frustration with the present system, in which even high inputs and production levels do not enable farmers to compete with cheap food from abroad, is driving innovation. It has encouraged a growing minority of farmers to experiment with more traditional systems, producing higher quality food that commands a premium in the market and simultaneously achieving a multitude of ecological benefits.

One farm has been trialling with using grass and herbal leys utilising a rotational approach which gives nature the opportunity to restore soil health and faunal diversity between crop yields.

In 2011 an 11-hectare field, which had been in continuous arable cropping for over 30 years, was drilled with grass seed and white clover and left for 5 years, untouched save for grazing sheep and cows. In 2015 the grass was removed and winter oilseed rape and winter wheat were direct drilled into the field. The direct drilling method precludes the need to cultivate the soil for 7 years, and so the field is currently acting as a carbon sequestration facility.

According to the farmer’s data, soil carbon has increased from 1.4% in 2011 to 2.6% in 2015; the earthworm population and the structural quality of the soil improved. This in turn provides the foundation for stable crop yields, improving commercial revenue.

On the farm’s other fields, the cropping programme has moved away from narrow, 2-crop rotations of wheat and rape to rotations of 8-10 diverse crops, including spring crops, linseed and catch-and-cover crops which act as green ploughs and cultivators.  A suckler herd and sheep flocks now graze the rotational grass leys; and close to 20,000 extra trees have been planted, the area under which will be used for free-range chickens.

The farm has implemented a monitoring programme to record achievements and failures, including annual soil tests and a bird survey to audit the farmland birds.

The grass leys have meant that soil is now in good enough condition to allow direct drilling for the foreseeable future.  This has resulted in a 65-70% saving on establishment costs and reduced CO2 emissions previously caused by in field cultivations prior to drilling.  The longer crop rotation has helped to improve the soil health, so that herbicide sprays across the farm have been reduced by 10 – 15% as the ground becomes cleaner.

Other estates are experimenting with various forms of ‘re-wilding’, allowing natural re-diversification and enhanced profitability; whilst groups such as the Pasture-Fed Livestock Association (PFLA) are working to encourage the restoration of species-rich grasslands, and also producing higher value meat at lower cost.  

It remains to be seen how widely these methods can be adopted by others, particularly given current, Brexit-related, uncertainty around farming legislation.

The future for farming subsidies

While it is widely understood that British environmental policy will initially be identical to EU legislation, the current farm subsidies are only guaranteed until 2022.

Speculation suggests that, once farming subsidies are paid directly from the Treasury and not through the EU, the public may increasingly demand quantifiable tax-payer benefits in return for subsidy payments. 

The recent indication from Mr Gove that farmers are likely to be paid by results – whether increases in the ’natural capital’ of the soil and water or better delivery of biodiversity across the countryside – certainly suggests that change is on the way.

Forty years ago, the respected Professor of Agriculture Gerald Wibberley was fond of saying that farmers will always respond to ‘price signals’, growing whatever society pays them to.

This concept could form the basis of a new contract between farmers and their communities. An EU-funded pilot scheme in Wensleydale, for example, awards farmers with grants, dependent on the biodiversity they can produce in the dale’s hay meadows, including re-establishing meadow flora and increasing the population of wet grassland birds, such as the Curlew. Farmers are already discussing their achievements, and even competing for the best result.

To restore biodiversity and encourage a shift away from intensive farming methods, government subsidies need to be refocused along similar lines.

Any new scheme will need to be more helpful both for farmers and for the environment.   It seems highly likely that the declines of many species, and the catastrophic overall reduction in invertebrate populations, must be ascribed to changes in the chemical – and not just agro-chemical – environment; its scale is such that it cannot be due to habitat loss. 

It will not be possible to restore biodiversity without addressing methods of production in the area of intensive farming.  To do this, it seems clear that much of the BPS funding, (around E25.1 billion over 2014-2020), could with advantage be re-directed towards CSS type schemes (Pillar II grants (E2.6 billion 2014-2020) which help to create and restore more biodiversity over a much wider area, as well as farm innovation.

It is not simply a matter of numbers, though.  The administration of grants needs to be made simpler and cheaper, and targets need to be more integrated across landscapes.  Regulatory focus in UK, unlike most of Europe, has tended to home in on details of individual fields, at the expense of a more comprehensive overview of the potential for reconnecting land and restoring soils and isolated or lost features across larger areas.

DEFRA’s focus on individual fields should be urgently replaced with discussions between groups of landowners (inhibited by present confidentiality rules) about implementing low-input systems and restoring connected habitat systems across a suite of adjoining farms. 

These groupings should reflect soils, geology and drainage, and semi-natural vegetation patterns. The countryside is one comprehensive unit, not just individual plots of farmland, and grants and cross-compliance checks should be designed accordingly.  As the ‘Making Space for Nature’ report of 2010, led by ecologist Professor Sir John Lawton, stressed, biodiverse areas need to be bigger, better, and better-connected.

These concerns must feed into the promised overhaul of the system, to ensure that each and every farmer is required to deliver environmental services. These could include carbon sequestration, the storage of floodwater to prevent it flooding a town, and the conservation of biodiverse wildlife habitats.  In short, DEFRA should change its philosophy from control to enabling.

For further information contact:

Philip Colebourne, Chairman, Ecological Planning & Research Ltd - email here

Tom Heathcote, Fisher German - email here

 



New Electronic Communications Code

 
 

The long awaited Electronic Communications Code became law on 28 December 2017. The new code replaces the existing Telecoms Code which many described as being an ill thought out and incoherent piece of legislation. Christopher Hicks, Head of Telecoms at Fisher German gives a brief overview below of the main changes to the code and how it differs from the old Telecoms Code.

Land and property owners need to consider carefully their existing telecoms leases with a view as to what impact this new Telecommunications Code will have on them and give very careful consideration when asked to enter into brand new mast agreements by the mobile phone operators.

Assignment

Assignment of leases will be permitted in law and any agreement will be void to the extent that it prevents or limits assignment to another operator, or makes assignment subject to conditions. Under the existing Telecoms Code, it is for the parties to agree how assignment will be dealt with including the matter of payment of money.

Upgrading and sharing

Under the new code an operator may upgrade or share apparatus with another operator providing that there is no more than a minimal, adverse impact upon appearance and that the upgrading or sharing of apparatus imposes no additional burden on the landowner. Under the existing Telecoms Code, it was for the parties to agree whatever terms they wished in respect of the sharing and upgrading of apparatus including payment of monies where appropriate.

Consideration and valuation

The existing Telecoms Code envisages that consideration is based on market value and, simplistically put, rents paid are based upon comparable evidence.  The new code imposes that consideration or rent will be based on market value but on a ‘no scheme world basis’ i.e. you disregard the fact that the transaction relates to the provision of an electronic communications network and that the operator may assign, upgrade and share.  In the countryside, it is likely that rents paid for leases by operators will come under pressure. However, in arriving at market value, the value of the agreement of a landowner for the imposition of apparatus with subsequent limits on the use of the land must be borne in mind and we envisage will, on the whole, lead to very little change in rents paid.

Termination of agreements

Under the new code the security of tenure provisions of the Landlord & Tenant Act 1954 will not apply. A Code Agreement may only be ended by giving at least 18 months’ written notice and specifying the grounds for termination. Grounds for termination include substantial breaches, de-lay of payments or the landowner wishing to develop the land. The most significant change from the existing Telecoms Code is that a landowner may no longer end a Code Agreement simply for his own use and purpose.

The old and new code

Where a landowner already has a lease in place with a telecoms operator, that lease will continue to be governed by the existing Telecoms Code until such a time as it expires or is terminated. A landowner entering into a new agreement post the new Electronic Communications Code coming into law will find their agreements governed by the new code and therefore need to approach such negotiations for a new agreement with extreme care and caution and mindful of the full facts of what they are entering into.

For further information email Christopher Hicks here

 



HS2 Woodland Fund

 
 

A &5 million fund has been established to support the restoration of plantations on ancient woodland sites, and/or creating new native woodland.

Funding is available for a range of capital items, paying 100% of associated standard cost, with a maintenance payment also for woodland creation in connection with HS2.

Applications are now open and will close in April 2020, for eligible woodland owners and land managers within a 25 mile buffer around the Phase 1 Act Limits. The first &1 million of funding is being managed by the Forestry Commission on behalf of HS2 Ltd.

Applications are subject to a simple scoring mechanism and are required to attain a threshold score determined by the Forestry Commission.

Applications for Woodland Creation will need to submit a planting map, showing the different species to be planted, and a concept map, showing the design of the woodland, including the location of proposed capital items, areas of open space, fence lines etc.

Applications for PAWs restoration will need to submit a PAWs restoration work area map, showing the area of planned activity including the location of capital items, areas of open space, fence lines, etc, and a condition assessment survey to help woodland managers rapidly assess the ecological condition of their woodland.

For further information contact Louise Duffin or Charity Shaw on 01858 410200



Need Funding for Diversification?

 
 

As the political and economic landscape changes in the run up to Britain leaving the European Union, farms and estates are considering their financial position. For many, the Basic Payment Scheme and environmental subsides provide a considerable proportion of the annual income. Whilst it is not anticipated that subsidy support for agriculture and the environment will disappear completely, there is no question that this income is at risk. Diversification may become a necessary step for many rural businesses.

For those rural businesses that have identified a diversification opportunity, help is at hand. There are several schemes available that provide funding to help meet the costs of establishing a new or diversified enterprise. Three of these schemes are detailed below.

LEADER

A total of &138 million is available in England between 2015 and 2020 under the LEADER scheme. LEADER funding is primarily focused at projects that create jobs, help rural businesses to grow, and benefit the rural economy. LEADER funding is delivered via a Local Action Group (LAG) and is available to local businesses, communities, farmers, foresters and land managers.

Each LAG decides which projects they will fund in their area. This depends on the priorities of the individual area, but all projects must support one or more of the 6 LEADER priorities which are, to:

  • support micro and small businesses and farm diversification
  • boost rural tourism
  • increase farm productivity
  • increase forestry productivity
  • provide rural services
  • provide cultural and heritage activities

The amount of grant funding will depend on:

  • the type of project
  • the size of the business, and
  • the costs involved (not all costs of a project may qualify for funding)

The minimum grant that can be applied for is &5,000. The maximum grant will depend on the LAG but will typically be up to &100,000. Grant funding will normally be limited to 40% of the total eligible project costs.

Growth Programme

The Rural Development Programme for England (RDPE) Growth Programme supports projects that invest in building businesses, creating new jobs and growing the economy in rural areas. &120 million is available through three national ‘calls’ being:

  • Business Development
  • Food Processing
  • Rural Tourism Infrastructure

The Growth Programme is aimed at small and micro-businesses and is looking to support high quality, high impact investments. The grants are delivered by the Rural Payments Agency (RPA), working with Local Enterprise Partnerships (LEP). Expressions of Interest must be submitted by 31 January 2018 and all projects must be finished, paid for and all grant claim forms submitted by 31 December 2020. The amount of funding available per project depends on the call and LEP, but is broadly at least &35,000 up to €200,000. The Growth Programme funding should be no more than 40% of the eligible project costs (50% in Cornwall and the Isles of Scilly). Projects applying for funding under the Rural Tourism Infrastructure scheme may be eligible for funding of up to €2million, for 100% of the project costs, if the infrastructure generates no income (such as a new cycle path).

Countryside Productivity Scheme

The RDPE Countryside Productivity Scheme provides &40 million of grant funding for projects in England which improve productivity in the farming and forestry sectors and help create jobs and growth in the rural economy. There are grants for: 

  • water resource management and reservoirs
  • improving forestry productivity
  • adding value to Agri-food
  • improving farm productivity

Grant applications can be submitted by farmers, owners of woodland and forestry contractors. There are two types of grants for up to 40% of the eligible project costs:

  • small - &2,500 to &35,000
  • large - &35,000 to &1,000,000

The deadline for applications is 30 April – 3 December 2018 depending on what the grant is for. These grants are funded by the European Agricultural Fund for Rural Development (EAFRD) and administered by the Rural Payments Agency (RPA).

Fisher German have a wealth of experience in securing grant funding for rural businesses and are currently working on outline applications as well as full LEADER applications for clients considering a wide variety of projects.

For further information email Rebecca Ruck Keene here