博鱼体育集团

Viewpoint

A shrewd negotiating strategy to win favour by giving Donald Trump his first major trade deal win, or a capitulation at the expense of agriculture? Debate will continue to rage about the wisdom of the government鈥檚 new trade deal with the US, and, to a lesser extent, its recent agreement with India. In reality, it鈥檚 probably too soon to tell, although worries that we could see a raft of Indian businesses buying up UK farmland and undercutting family farms seem overblown. Perhaps the government is hoping to placate the farming sector with the welcome announcement that around 3,000 farmers who missed the unannounced cut-off for applying for the Sustainable Farming Incentive (SFI) will be allowed to continue with their applications. However, an apology from Farming Minister Daniel Zeichner for the confusion created is unlikely to soothe too many of the feathers that have been severely ruffled by the likes of the changes to Inheritance Tax on farmland. There is much more work to do to regain the trust of rural businesses.

Commodity markets

Milling wheat move

Feed wheat prices remain in the doldrums with improving US crop conditions putting a dampener on speculative trading. Demand is also muted as buyers wait for prices to fall further. However, the market for breadmaking wheat is picking up. Prices rose by almost £6/t last week, according to Farmers Weekly.

The headlines

Trade deals get mixed response

Trade deals with two of the world鈥檚 largest economies, which contain potential opportunities and challenges for the UK鈥檚 farmers, have just been struck by the government.

A free-trade agreement with India has been broadly welcomed by the NFU. Although the full details have yet to be drafted, the package includes the scrapping of tariffs on British lamb, which were levied at 33% on all imports.

Scaling back the import duty on Scottish whisky from 150% to 75% could also offer a boost to malting barley growers. Indians are the biggest overseas sippers of Scotch, knocking back 192 million bottles in 2024.

Concerns over imported food from India treated with farm chemicals that would be illegal in the UK have been raised, but the government insists there will be no softening of food safety and farming standards.

That hasn鈥檛 placated farmers angry that the trade deal just signed with the US will allow the reciprocal import of 13,000 tonnes of tariff-free beef between the two countries. Although this only covers non-hormone-treated beef, many worry it is the thin end of the wedge.

However, given that the UK consumes around 900,000 tonnes of beef each year, the more significant concession granted to the US in return for lowering its tariffs on British cars and steel is lifting the duty on 1.4 billion litres of American ethanol.

The UK鈥檚 bioethanol industry consumes up to two million tonnes of grain each year and produces important byproducts such as animal feed and CO2. Opening our market to such a large volume of imported ethanol could have an impact on both the arable and livestock sectors.

It鈥檚 worth noting that only the frameworks of the US and Indian trade deals have been agreed so far. The nuts and bolts of the agreements will take much longer to sort out before the deals are ratified.

SFI reprieve

After intense pressure from lobby groups like the CLA and NFU, as well as environmental organisations, the government has backtracked on its recent unannounced cliff-edge closure of the 2024 round of the Sustainable Farming Incentive (SFI).

In yesterday (12 May), Farming Minister Daniel Zeichner confirmed that anybody who had saved their SFI application, but not submitted it, within two months of the scheme鈥檚 shutdown on 11 March will still be allowed to make an application. However, the value of each application will be limited to £9,300, the median average of claims so far.

Mr鈥痁eichner apologised for the confusion, noting that while the website correctly told applicants their saved drafts would stay live for two months, a technical glitch also surfaced an outdated banner that promised six weeks鈥� notice before the scheme鈥檚 closure.

News in brief

Tech grant open soon

Defra has just issued guidance for the latest round of the , which opens on 29 May and closes on 10 July. Around £50 million is up for grabs, covering three themes: productivity (66 pieces of eligible equipment), slurry management (17 pieces of eligible equipment) and animal health and welfare (100 eligible items). Grants range from £1,000 to £25,000. For help with grant applications, please contact Mark Topliff.

Base rate cut

The Bank of England鈥檚 Monetary Policy Committee (MPC) voted to cut the base rate to 4.25% last Thursday. Bradley Smith, a rural lending specialist at 博鱼体育集团 Frank Finance, comments: 鈥淭he tone of the MPC suggests more cuts are likely. In terms of commercial loans, banks have entered a new trading year and are all keen to lend to farms and estates. As such, competition is strong with the majority now lending at sub-2% margins. The best deal I have done this year was at 1.18 over base, but with swap rates finally below 4%, it is now possible to fix at sub-5% for the best deals.鈥�

Drought warning

The Environment Agency is urging farmers to work with the NFU to assess their water needs for the summer and to ensure they have sufficient water to last the season. The warning follows the driest start to the year since 1929 for some parts of England. Reservoir storage across England is at 84% of total capacity. This compares to 90% at the end of April during drought-hit 2022.

Greenhouse boost

Last week, we called for more support for the horticultural sector to boost the UK鈥檚 food security. A new glasshouse enterprise announced last week shows the potential benefits. The 40-hectare , near Braintree, Essex, will produce over 28,000 tonnes of tomatoes, offsetting 7% of current imports. The site will use heat, CO2 and electricity from the Indaver Integrated Waste Management Facility, currently under construction.

Nature not a blocker

Environmentalists are claiming that the government鈥檚 newly published (PIB) provides no evidence that protecting nature is impacting the delivery of new housing. Ministers say PIB will speed up housing developments and large infrastructure projects by allowing developers to pay into a central Nature Recovery Fund (NRF) that will be used to create environmental improvement elsewhere. The Office for Environmental Protection (OEP) has already stated: 鈥淚n our considered view, the bill would have the effect of reducing the level of environmental protection provided for by existing environmental law. As drafted, the provisions are a regression.鈥�

30/30 target at risk

MPs on the Environmental Audit Committee have also just concluded that the government looks set to miss its environmental targets, which include protecting 30% of the nation鈥檚 land and sea by 2030. , among other criticisms, says the government鈥檚 proposed Nature Recovery Fund (see article above) risks diminishing the impact of Biodiversity Net Gain and that not enough is being done to encourage more private capital investments in nature.

Climate change legal case

The government is facing another environmental headache following the decision by Friends of the Earth (ECHR). The campaign group鈥檚 claim that the programme falls 鈥渇ar short鈥� of what is legally required to protect key infrastructure and the general public, particularly those most exposed to climate-related risks, was dismissed by the UK鈥檚 High Court last year.

Scottish organic lead

Newly released figures from Defra reveal that Scotland is currently more enthusiastic than England and Wales when it comes to . In 2024, the total amount of land being farmed organically, including land under conversion, rose by 13% in Scotland to 132,000 hectares. The area flatlined in England, remaining at 296,000 hectares, but fell by 11% in Wales to 68,000 hectares.

Tree disease cash

There is, however, some good news for the future of trees. has just been announced to help tackle diseases such as ash dieback and fungal infections of Scots pine. Tree health is under increasing pressure as the UK鈥檚 changing climate makes our forests and woodlands more vulnerable to diseases and pests that were previously restricted to warmer parts of the world. The government says the potential loss of more than 100 million trees over the coming decades could cost the economy £15 billion.

Snail farming scam

One of the tax-efficient elements of owning agricultural property is that it is exempt from business rates. This benefit is being taken to the limit by snail farming enterprises that rent central urban office locations and populate them with just a few boxes of breeding snails. The sham arrangements are costing local councils tens of thousands of pounds.

Sign up for Rural Report

The Spring/Summer 2025 edition of The Rural Report, 博鱼体育集团 Frank鈥檚 flagship publication for rural businesses, which looks in more detail at many of the issues discussed in The Rural Update, is due to be published soon. To receive your copy, which includes the latest news, research and insights from 博鱼体育集团 Frank鈥檚 rural property experts, as well as thought-provoking contributions from some of Britain鈥檚 most iconic estates, .

Property of the week

Northumberland wilderness

Hagdon Farm at Eglingham, near Alnwick, offers a serious taste of the wilderness for sporting enthusiasts and nature lovers. A two-bed traditional farmhouse is surrounded by 100 acres of in-bye grazing land, but the rest of consists of Hagdon Moor, which has been managed for grouse and partridge. The guide price is £2.5 million. Please get in touch with Will Matthews for more information.

Discover more of the farms and estates on the market with 博鱼体育集团 Frank

Property markets

Development land Q1 2025 鈥� Market falls

The value of greenfield development land fell by 2% in the first quarter of the year. Urban brownfield sites, however, lost 5% of their value over the same period, according to the . 鈥淰iability pressures and delivery risks continued to weigh on sentiment, with housebuilders citing persistent cost inflation and planning uncertainty,鈥� points out researcher Oliver 博鱼体育集团, who compiled the index. 鈥淯rban brownfield and prime central London sites saw more downward pressure, driven by a widening viability gap, increased uncertainty linked to fire safety regulations, and reduced activity in the institutional and affordable housing markets,鈥� he adds.

Farmland Q1 2025 鈥� Values resilient

The farmland market in England and Wales is holding steady in the face of mounting sector pressures. Despite wider challenges across the agricultural sector and ongoing policy uncertainty, values have remained largely stable, underlining the market鈥檚 resilience.
The 博鱼体育集团 Frank Farmland Index, which tracks the average price of bare agricultural land across England and Wales, showed a marginal drop of 1% in the first quarter of 2025 to £9,072/acre. This follows a similar small decline in the final three months of 2024, bringing the annual fall to just 1.9%.

Country houses Q1 2025 鈥� Mixed picture

The average price of desirable homes in the countryside slipped by just 0.3% in the first quarter of the year, according to the 博鱼体育集团 Frank Prime County House Index. Over the past 12 months, values have fallen by 1.6%. Expectations of an extra base-rate cut by the Bank of England this year could help steady markets, says Tom Bill, 博鱼体育集团 Frank鈥檚 Head of UK Residential Research.