As 2014 draws to a close, now is the time to reflect on the highs and lows of the farming year which has proved to be a mixed bag.
The year opened with torrential rain and floods on the Somerset Levels which became international news, but as the rain stopped it gave way to one of the best periods of “growing weather” we have seen for some time. Arable crops generally yielded well, grass and maize grew strongly filling the silage clamps and barns with an abundance of good quality winter fodder.
Livestock also enjoyed the pleasant spring and summer and incredibly mild autumn, resulting in high milk production and beef cattle growing and fattening well.
However, good as the weather may have been, farmers have been buffeted by some extreme conditions on the commodity markets.
Beef farmers were the first to be hit as prices plummeted by around 20% in the first six months of the year. But since then, the market has firmed and the year ends with prices back by about 10% on a year ago with modest hope now emerging for a better 2015.
It was then the turn of arable farmers to feel the cold wind of falling world commodity markets as feed wheat prices slumped from around £170 per tonne in the spring to a low of around £100 per tonne in mid autumn. From there prices have thankfully improved somewhat, approaching £130 per tonne at the yearend.
However, the most unpleasant surprise of the year was the unexpected slump in milk prices which started reasonably gently, but in recent months has gathered pace with some dairy farmers now being paid as much as 10p per litre less than they were being paid at the start of the year. This remains a worrying situation and there will undoubtedly be casualties as the months go on and what is particularly worrying is that there does not seem to be an obvious end to this decline in milk prices.
Having said that, unlike other sectors, not all dairy farmers are suffering at the same rate because the price each farmer receives depends on the terms of the contract they hold with one of the numerous milk buyers in the market. This is demonstrated by the latest DairyCo data which shows the top monthly milk price offered in October was 36.7p per litre as compared to the bottom price of 24.98p per litre; a staggering difference for more or less the same commodity.
So, it has been a mixed year with generally good weather after a disastrously wet start but this has not been enough to offset the effects of falling commodity prices which will undoubtedly impact on farming profits in 2014. However, with oil prices also falling fast this should help reduce costs of production as we move in to 2015 thereby offsetting at least some of the effect of falling produce prices which have proved to be the dominant factor effecting farmers in 2014.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
A property blog written and authored by our specialist blogging team, discussing all and any matter relating to the residential, rural and commercial property markets.
Tuesday 23 December 2014
Monday 22 December 2014
Revenge evictions bid fails - but may return
You may remember in an earlier Clearer View we raised the issue of gas safety and in that article mentioned a Private Member’s Bill put before Parliament by Liberal Democrat MP Sarah Teather.
The Government agreed to back her Bill and allow it time to progress through the essential Parliamentary stages – but its second reading on November 28 was talked out by two Tory MPs who spoke for more than two hours until the Bill ran out of time.
However, it’s reported that Housing Minister Brandon Lewis is seeking a way to insert a clause to prevent so-called “revenge” evictions into the Deregulation Bill in January.
The Bill sought to ban such evictions by landlords of tenants who had requested repairs – once a repair had been requested, the Bill would have made it impossible to serve a Section 21 notice for repossession.
This restriction would also have applied where no valid gas safety certificate exists or where the tenant has not been given an EPC for the property but its failure in Parliament is no reason to avoid ensuring all necessary paperwork is valid and up to date.
EPCs are arranged at the point of marketing by all our branches. Our property managers arrange gas safety certificates for our managed properties and it remains a legal requirement for Houses of Multiple Occupation (HMO) to have a carbon monoxide alarm fitted. However, we advise all landlords to consider the installation of alarms to protect the occupier and help prevent any legal action being taken against a landlord.
The Government agreed to back her Bill and allow it time to progress through the essential Parliamentary stages – but its second reading on November 28 was talked out by two Tory MPs who spoke for more than two hours until the Bill ran out of time.
However, it’s reported that Housing Minister Brandon Lewis is seeking a way to insert a clause to prevent so-called “revenge” evictions into the Deregulation Bill in January.
The Bill sought to ban such evictions by landlords of tenants who had requested repairs – once a repair had been requested, the Bill would have made it impossible to serve a Section 21 notice for repossession.
This restriction would also have applied where no valid gas safety certificate exists or where the tenant has not been given an EPC for the property but its failure in Parliament is no reason to avoid ensuring all necessary paperwork is valid and up to date.
EPCs are arranged at the point of marketing by all our branches. Our property managers arrange gas safety certificates for our managed properties and it remains a legal requirement for Houses of Multiple Occupation (HMO) to have a carbon monoxide alarm fitted. However, we advise all landlords to consider the installation of alarms to protect the occupier and help prevent any legal action being taken against a landlord.
Lisa Simon,
Partner Head of Residential Lettings
T: 020 7518 3234
Who is an “active farmer”?
Well that is a question that has been vexing a number of “farmers” for some time because under the new Basic Payment Scheme (BPS), it is only “active farmers” that will be eligible to receive EU support payments from 2015 onwards.
Up until now the definition of an active farmer has not been entirely clear and as a result there has been concern that for example, those farmers who have successfully diversified may no longer qualify as an active farmer even if they are clearly still farming in a reasonably significant manner.
However, what we have known for some time is that there is a “negative list” of non agricultural activities that will not qualify which are as follows:
The first four categories seem reasonably straightforward but the fifth category has always caused concern, not least because no one understood what “real estate services” really meant. But now things have become clearer following DEFRA’s latest publication on the subject.
We now know that ‘operating a real estate service’, applies to professional property developers, real estate agencies and people managing real estate on a fee or contract basis.
However, what is perhaps of more importance to farmers is that renting out accommodation facilities on a farm, apartments or homes that are in a farmer’s private property for housing purposes, parts of buildings or surfaces on the holding and agricultural land to third parties will not count as real estate services. This should cover many potential diversification activities.
But, in addition farmers who operate any of the 5 non-agricultural activities may still qualify as active farmers if they meet one of 3 ‘re-admission criteria’ which are as follows:
- The farmer’s annual payments for the Single Payment Scheme or BPS (including the greening payment and any young farmer payments) are at least 5% of their total non-agricultural receipts in the most recent financial year
- The farmer’s total agricultural receipts are at least 40% of their total receipts in the most recent financial year
- The farmer has at least 36 hectares of eligible land
So it seems that after all this uncertainty and confusion, the simplest way to ensure you will always qualify as an active farmer is to farm at least 36 hectares or 89 acres. Why 36 hectares is deemed to be the magic number goodness only knows; it is just yet another of those bizarre interpretations of EU legislation but at least it will mean “active farmers” now know where they stand.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Up until now the definition of an active farmer has not been entirely clear and as a result there has been concern that for example, those farmers who have successfully diversified may no longer qualify as an active farmer even if they are clearly still farming in a reasonably significant manner.
However, what we have known for some time is that there is a “negative list” of non agricultural activities that will not qualify which are as follows:
- airports
- railways
- waterworks
- permanent sport and recreational grounds
- real estate services
The first four categories seem reasonably straightforward but the fifth category has always caused concern, not least because no one understood what “real estate services” really meant. But now things have become clearer following DEFRA’s latest publication on the subject.
We now know that ‘operating a real estate service’, applies to professional property developers, real estate agencies and people managing real estate on a fee or contract basis.
However, what is perhaps of more importance to farmers is that renting out accommodation facilities on a farm, apartments or homes that are in a farmer’s private property for housing purposes, parts of buildings or surfaces on the holding and agricultural land to third parties will not count as real estate services. This should cover many potential diversification activities.
But, in addition farmers who operate any of the 5 non-agricultural activities may still qualify as active farmers if they meet one of 3 ‘re-admission criteria’ which are as follows:
- The farmer’s annual payments for the Single Payment Scheme or BPS (including the greening payment and any young farmer payments) are at least 5% of their total non-agricultural receipts in the most recent financial year
- The farmer’s total agricultural receipts are at least 40% of their total receipts in the most recent financial year
- The farmer has at least 36 hectares of eligible land
So it seems that after all this uncertainty and confusion, the simplest way to ensure you will always qualify as an active farmer is to farm at least 36 hectares or 89 acres. Why 36 hectares is deemed to be the magic number goodness only knows; it is just yet another of those bizarre interpretations of EU legislation but at least it will mean “active farmers” now know where they stand.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday 16 December 2014
Child safety should be the focus
Child safety is at the forefront when many people are shopping at this time of year but, professionally, it should also be a concern for landlords.
This is especially so in the home with regard to anything used for internal blinds or curtain tracks including, but not limited to, vertical blinds, roller blinds, Roman blinds, and plantation shutters which are now subject to 40 pages of regulations published by the British Standards Institution and based on European standards.
If that sounds over complicated, the British Blind and Shutter Association has a very helpful leaflet on-line that explains what’s needed - click here - where’s helpful video content and a downloadable explanatory pdf.
Where new blinds are being fitted, they must comply with the regulations and have built-in safety systems but where this is not feasible due to window shape or location separate safety systems can be used such as chain or cord tensioners.
In either case, there are regulations governing the lengths of cords or chains.
Properties where blinds are already installed can still be made safe – the relatively simple installation of cleats on which to wind cords when not in use may be an efficient and cost-effective solution to prevent young children being strangled in the loops created by cords or chains.
Of course, such devices are only effective when they are used. If your properties are furnished, cots, playpens, and other furniture should be placed away from windows to avoid children climbing up, an activity they all seem to love.
The regulations apply to all premises where children aged between 0-42 months are present or likely to have access – almost everywhere!
Our property managers are available to assist with adjusting existing installations and, where applicable, installing new blinds or curtain tracks.
This is especially so in the home with regard to anything used for internal blinds or curtain tracks including, but not limited to, vertical blinds, roller blinds, Roman blinds, and plantation shutters which are now subject to 40 pages of regulations published by the British Standards Institution and based on European standards.
If that sounds over complicated, the British Blind and Shutter Association has a very helpful leaflet on-line that explains what’s needed - click here - where’s helpful video content and a downloadable explanatory pdf.
Where new blinds are being fitted, they must comply with the regulations and have built-in safety systems but where this is not feasible due to window shape or location separate safety systems can be used such as chain or cord tensioners.
In either case, there are regulations governing the lengths of cords or chains.
Properties where blinds are already installed can still be made safe – the relatively simple installation of cleats on which to wind cords when not in use may be an efficient and cost-effective solution to prevent young children being strangled in the loops created by cords or chains.
Of course, such devices are only effective when they are used. If your properties are furnished, cots, playpens, and other furniture should be placed away from windows to avoid children climbing up, an activity they all seem to love.
The regulations apply to all premises where children aged between 0-42 months are present or likely to have access – almost everywhere!
Our property managers are available to assist with adjusting existing installations and, where applicable, installing new blinds or curtain tracks.
Lisa Simon,
Partner Head of Residential Lettings
T: 020 7518 3234
Monday 15 December 2014
Badger Culling
As the second year of badger culling starts in the pilot areas of Somerset and Gloucestershire I feel I must once again make comment on the perennial debate surrounding badgers and bovine TB.
Last year around 1800 badgers were killed in the two cull areas which was less than was required to reach the 70% target which has been identified by scientists as the appropriate proportion of the population which needs to be slaughtered so as to control the disease. This year around 930 badgers need to be killed in order to reach the 70% target which reflects the reduction in size of the badger population following last year’s cull.
The rights and wrongs of whether or not the cull should go ahead are endless but what is undoubtedly true is that the incidence of the disease in cattle has increased dramatically over the last 20 years to unacceptable levels.
For instance in 1996, approximately 2,250,000 cattle were tested for TB and in total 3,776 cattle were slaughtered as either a reactor or contact. In 2013, provisional figures indicate 8,393,303 cattle were tested and 32,620 cattle were slaughtered. The emotional and financial cost to farmers and the premature death of 32,000 cattle are matters which are often conveniently forgotten in this debate.
However, I would make two observations on the statistics above.
The first is that biosecurity measures on farm are taken very seriously by both government and farmers and before anyone says anything to the contrary the time and cost incurred by farmers in testing almost 8.4m cattle last year should not be underestimated. In particular it should be understood the test involves a vet injecting an animal on one day then the vet returns to “read” the test a few days later. This is a significant task which is costly for farmers both in time and money, even if no reactors are found.
The second point I would make is that a tenfold increase in reactors from 1996 to 2013 is a very serious problem and it is clear that biosecurity measures alone are simply not controlling the disease. The only logical answer to this is that there must be an outside reservoir of the disease which keeps on re-infecting the cattle herd and badgers have been identified as such a wildlife reservoir.
I cannot see how the disease in cattle can ever be brought under control unless the disease in badgers is also tackled. In this context a similar programme to that in cattle of testing and culling badgers would be ideal but this is simply not practical in a wild population. Vaccination is also a possibility and may well have an important role to play, particularly in healthy badger populations to prevent the further spread of the disease.
However, where the disease is prevalent in both cattle and badgers I can see no alternative at this stage other than controlling badger numbers, which in themselves have increased dramatically since they became protected under the Badger Act in 1992.
So, unpalatable as it may be to some, culling badgers is the only practical solution in the short term to bringing this disease under control and as DEFRA secretary Liz Truss said last week, “doing nothing is not an option”.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Last year around 1800 badgers were killed in the two cull areas which was less than was required to reach the 70% target which has been identified by scientists as the appropriate proportion of the population which needs to be slaughtered so as to control the disease. This year around 930 badgers need to be killed in order to reach the 70% target which reflects the reduction in size of the badger population following last year’s cull.
The rights and wrongs of whether or not the cull should go ahead are endless but what is undoubtedly true is that the incidence of the disease in cattle has increased dramatically over the last 20 years to unacceptable levels.
For instance in 1996, approximately 2,250,000 cattle were tested for TB and in total 3,776 cattle were slaughtered as either a reactor or contact. In 2013, provisional figures indicate 8,393,303 cattle were tested and 32,620 cattle were slaughtered. The emotional and financial cost to farmers and the premature death of 32,000 cattle are matters which are often conveniently forgotten in this debate.
However, I would make two observations on the statistics above.
The first is that biosecurity measures on farm are taken very seriously by both government and farmers and before anyone says anything to the contrary the time and cost incurred by farmers in testing almost 8.4m cattle last year should not be underestimated. In particular it should be understood the test involves a vet injecting an animal on one day then the vet returns to “read” the test a few days later. This is a significant task which is costly for farmers both in time and money, even if no reactors are found.
The second point I would make is that a tenfold increase in reactors from 1996 to 2013 is a very serious problem and it is clear that biosecurity measures alone are simply not controlling the disease. The only logical answer to this is that there must be an outside reservoir of the disease which keeps on re-infecting the cattle herd and badgers have been identified as such a wildlife reservoir.
I cannot see how the disease in cattle can ever be brought under control unless the disease in badgers is also tackled. In this context a similar programme to that in cattle of testing and culling badgers would be ideal but this is simply not practical in a wild population. Vaccination is also a possibility and may well have an important role to play, particularly in healthy badger populations to prevent the further spread of the disease.
However, where the disease is prevalent in both cattle and badgers I can see no alternative at this stage other than controlling badger numbers, which in themselves have increased dramatically since they became protected under the Badger Act in 1992.
So, unpalatable as it may be to some, culling badgers is the only practical solution in the short term to bringing this disease under control and as DEFRA secretary Liz Truss said last week, “doing nothing is not an option”.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wednesday 10 December 2014
A Clearer View - Voted #1 in the Top 20 Best Agency and Supplier for Ideas and Innovations
A Clearer View has been voted Number 1 in the Top 20 Best Agency and Supplier for Ideas and Innovations in Four-i, an industry publication from the Property Academy.
It placed Carter Jonas ahead of other agencies, Virgin Media and Google.
We will try to keep up the hard work so that you are always informed of changes in both legislation and what is regarded as industry best practice.
It placed Carter Jonas ahead of other agencies, Virgin Media and Google.
We will try to keep up the hard work so that you are always informed of changes in both legislation and what is regarded as industry best practice.
Lisa Simon,
Partner Head of Residential Lettings
T: 020 7518 3234
Housing Crisis vs Party Politics:
"We need all of their solutions and more. And we need them now"
The rather tiresome slanging match around the housing debate continues with Labour promising to build 200,000 houses a year (although that is still 50,000 short of what we need) and the Conservatives half that number by a slightly earlier date. Oh and the Liberals have thrown in half a dozen Garden Cities for good measure to annoy their Coalition partners who came out strongly against them after the recent Garden City Competition. Does anybody really believe any of them will deliver the numbers?
All sides have been careful not to specify how they would actually build these extra homes and since everyone knows that no Government has built the quantity (or quality) of housing we need since we abandoned the new towns programme and flogged off the council housing in the 1980's, these proposals would barely scratch the surface of the problem anyway. But some people are bucking the trend - for example Birmingham City Council are developing their own Council housing as well as carefully planning a new urban extension of 6000 homes, and the London Borough of Tower Hamlets is currently planning to build 150 much needed affordable council homes supported by the London Mayor.
So what to do?
We need to get away from the debate about brownfield or greenfield, about urban extensions versus urban regeneration, about Garden Cities being better than New Towns – the simple fact is that we probably need all of these solutions and more, and we need them now. However the issue is not as simplistic as it is painted: well designed low carbon housing in a sustainable well-connected greenfield location out of the flood plain might be preferable to poor quality Noddy boxes on brownfield land in a badly connected location. Mayfair was once green fields.
We need to find new ways of building much more, decent, housing which is fit for purpose in the 21st century. To do this we will need to train up a whole new generation of skilled craftspeople. The debate needs to be taken away from central government and from party politics, and devolved to local areas. “People in Birmingham and Manchester know the real needs of their areas far better than those in Whitehall, but beyond our major cities there needs to be a return to regional housing targets.” The recent Lyons report contains a multitude of suggestions, but it will be interesting to see how many of these ideas see the light of day.
Infrastructure
Infrastructure is such a vast and all-embracing term that it suffers from the great disadvantage that most people, including politicians, don’t really have much idea of its importance or what it means. But it is none the less important for that, and it creates real jobs and lasting value. Infrastructure isn't just about the grand engineering projects for roads, railways and runways beloved of headline-grabbing politicians, it’s also about softer elements such as green infrastructure, natural flood relief, biodiversity and healthy living corridors.
The abandonment of regional spatial planning has been nothing short of a disaster, because it has reinforced the already massively over-centralised UK economy. And the irony is that this is from a coalition government which has trumpeted the ‘New Localism’ as being the solution to all our urban and rural ills, while in fact it has just reinforced NIMBYism.
It is manifestly daft to have separate public inquiries into High Speed Rail 2 and the future of London’s air transport – they are intimately connected and they need to be considered together along with other regional spatial issues such as housing and economic growth areas.
The need for joined-up thinking between transport, city renewal and urban growth is so obvious it shouldn't need to be stated. This is such an import issue it needs further discussion.
John Phillipps,
The rather tiresome slanging match around the housing debate continues with Labour promising to build 200,000 houses a year (although that is still 50,000 short of what we need) and the Conservatives half that number by a slightly earlier date. Oh and the Liberals have thrown in half a dozen Garden Cities for good measure to annoy their Coalition partners who came out strongly against them after the recent Garden City Competition. Does anybody really believe any of them will deliver the numbers?
All sides have been careful not to specify how they would actually build these extra homes and since everyone knows that no Government has built the quantity (or quality) of housing we need since we abandoned the new towns programme and flogged off the council housing in the 1980's, these proposals would barely scratch the surface of the problem anyway. But some people are bucking the trend - for example Birmingham City Council are developing their own Council housing as well as carefully planning a new urban extension of 6000 homes, and the London Borough of Tower Hamlets is currently planning to build 150 much needed affordable council homes supported by the London Mayor.
So what to do?
We need to get away from the debate about brownfield or greenfield, about urban extensions versus urban regeneration, about Garden Cities being better than New Towns – the simple fact is that we probably need all of these solutions and more, and we need them now. However the issue is not as simplistic as it is painted: well designed low carbon housing in a sustainable well-connected greenfield location out of the flood plain might be preferable to poor quality Noddy boxes on brownfield land in a badly connected location. Mayfair was once green fields.
We need to find new ways of building much more, decent, housing which is fit for purpose in the 21st century. To do this we will need to train up a whole new generation of skilled craftspeople. The debate needs to be taken away from central government and from party politics, and devolved to local areas. “People in Birmingham and Manchester know the real needs of their areas far better than those in Whitehall, but beyond our major cities there needs to be a return to regional housing targets.” The recent Lyons report contains a multitude of suggestions, but it will be interesting to see how many of these ideas see the light of day.
Infrastructure
Infrastructure is such a vast and all-embracing term that it suffers from the great disadvantage that most people, including politicians, don’t really have much idea of its importance or what it means. But it is none the less important for that, and it creates real jobs and lasting value. Infrastructure isn't just about the grand engineering projects for roads, railways and runways beloved of headline-grabbing politicians, it’s also about softer elements such as green infrastructure, natural flood relief, biodiversity and healthy living corridors.
The abandonment of regional spatial planning has been nothing short of a disaster, because it has reinforced the already massively over-centralised UK economy. And the irony is that this is from a coalition government which has trumpeted the ‘New Localism’ as being the solution to all our urban and rural ills, while in fact it has just reinforced NIMBYism.
It is manifestly daft to have separate public inquiries into High Speed Rail 2 and the future of London’s air transport – they are intimately connected and they need to be considered together along with other regional spatial issues such as housing and economic growth areas.
The need for joined-up thinking between transport, city renewal and urban growth is so obvious it shouldn't need to be stated. This is such an import issue it needs further discussion.
John Phillipps,
Consultant, Masterplanning
T: 020 7016 0726
Tuesday 9 December 2014
Elizabeth Truss blinded by last year's stats
Last week I read a news item released from a recent government report entitled “Making the food and farming industry more competitive while protecting the environment”
The headline was that, “The UK agricultural industry is going from strength to strength in its contribution to economic growth, with new statistics revealing that increased production and prices boosted farming income to £5.6 billion last year”.
It was stated that total income from farming rose by 15%, between 2012 and 2013 as the industry stepped up its output of top-quality food.
Environment Secretary Elizabeth Truss said, “These figures underline that food and farming really is a powerhouse of the UK economy. From potatoes to poultry, our farming industry is showing that it is leading the way in producing top-quality food that is desired across the world. Our farming sector employs over 400,000 people and their success is helping us deliver the government’s long term economic plan.
We know British consumers value British food but we want UK farming to be a world-leader, exporting quality products far and wide as well as thriving on the home front. Our push for better food labelling across Europe is just one of a host of ways we are working to help this crucial sector to grow and drive growth.”
However, I do hope that Elizabeth Truss understands that this rosy picture represents a “snapshot” from the past, before the world commodity markets took a nose dive plunging many farmers in to a very different situation today from that which existed only a year ago.
It is true that in 2013 commodity prices were reasonably high and the weather in the UK was certainly better than was experienced in the very wet summer of 2012. So in general farm incomes did rise in 2013, but 2014 has proved to be a very different scenario.
First the beef sector plummeted during last spring and summer which was followed by dramatic falls in cereal prices. Both these markets have made modest recoveries in recent months but the dairy sector is in freefall, with many farmers now being paid 8-10p/litre less for their milk than they were being paid in the spring.
So I trust Elizabeth Truss is not being blinded by last year’s statistics and that she has real grasp of the difficult situation which is affecting many farmers in the UK at present. There may be little that she can do about world market prices but there are things government should do to ensure the retail giants are prevented from passing cost savings down the food supply chain in an unfair manner so as to bolster their dwindling profits at the cost of primary producers.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The headline was that, “The UK agricultural industry is going from strength to strength in its contribution to economic growth, with new statistics revealing that increased production and prices boosted farming income to £5.6 billion last year”.
It was stated that total income from farming rose by 15%, between 2012 and 2013 as the industry stepped up its output of top-quality food.
Environment Secretary Elizabeth Truss said, “These figures underline that food and farming really is a powerhouse of the UK economy. From potatoes to poultry, our farming industry is showing that it is leading the way in producing top-quality food that is desired across the world. Our farming sector employs over 400,000 people and their success is helping us deliver the government’s long term economic plan.
We know British consumers value British food but we want UK farming to be a world-leader, exporting quality products far and wide as well as thriving on the home front. Our push for better food labelling across Europe is just one of a host of ways we are working to help this crucial sector to grow and drive growth.”
However, I do hope that Elizabeth Truss understands that this rosy picture represents a “snapshot” from the past, before the world commodity markets took a nose dive plunging many farmers in to a very different situation today from that which existed only a year ago.
It is true that in 2013 commodity prices were reasonably high and the weather in the UK was certainly better than was experienced in the very wet summer of 2012. So in general farm incomes did rise in 2013, but 2014 has proved to be a very different scenario.
First the beef sector plummeted during last spring and summer which was followed by dramatic falls in cereal prices. Both these markets have made modest recoveries in recent months but the dairy sector is in freefall, with many farmers now being paid 8-10p/litre less for their milk than they were being paid in the spring.
So I trust Elizabeth Truss is not being blinded by last year’s statistics and that she has real grasp of the difficult situation which is affecting many farmers in the UK at present. There may be little that she can do about world market prices but there are things government should do to ensure the retail giants are prevented from passing cost savings down the food supply chain in an unfair manner so as to bolster their dwindling profits at the cost of primary producers.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Wednesday 3 December 2014
Taking Stock
Last week saw three different professional firms come together at the Bath and West to address the problems currently facing the dairy industry as milk prices have plummeted in recent months.
The seminar entitled “Taking Stock” was hosted by land agents, Carter Jonas, the Shepton Vets and the Farm Consultancy Group (FCG). The aim of the event was to assess the strategies farmers can employ to survive the current difficult trading period and in general, despite the current problems the message was reasonably up beat.
The overriding message that came across from all three firms was the importance of a farmer understanding his business inside out and managing all aspects to keep costs of production under control.
In the last year or so, while milk prices were reasonably high it seems some farms may have taken their eye of the ball in this respect and Hollie Savage of Carter Jonas and James Shenton and Phil Cooper of the FCG all emphasised the need for farmers to analyse their business carefully, benchmarking their costs of production against competitors so as to identify where improvements can be made.
Similarly Paddy Gordon of Shepton Vets explained the importance of a farmer understanding all aspects of the herd’s health and importance of using your vet to provide regular consultancy advice rather than just calling the vet when an animal falls ill. In so doing Paddy illustrated how the cost of regular advice will be far outweighed by an increase in profits as mastitis can be brought under control and pregnancy rates increased.
Tom Ireland from Carter Jonas addressed other opportunities in relation of renewable energy issues in particular where he explained that there are still significant opportunities for farmers, although obtaining planning consent and locating an appropriate grid connection remain significant obstacles. However he also emphasised that as subsidies begin to fall, the profitability of a renewable energy installation will become increasingly reliant on understanding the farms energy needs and matching that to the electricity generated. This is because it will be increasing important to use your own electricity rather than exporting it to the grid because this will produce a much higher return.
So in conclusion, although it was acknowledged that some dairy farmers may leave the industry, the speakers were confident that the majority will survive. However, in order to receive a sensible return for the massive financial and time commitment required to run a successful dairy farm, hard work alone will not be enough; farmers will need a thorough understanding of their business and act to control costs in particular.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The seminar entitled “Taking Stock” was hosted by land agents, Carter Jonas, the Shepton Vets and the Farm Consultancy Group (FCG). The aim of the event was to assess the strategies farmers can employ to survive the current difficult trading period and in general, despite the current problems the message was reasonably up beat.
The overriding message that came across from all three firms was the importance of a farmer understanding his business inside out and managing all aspects to keep costs of production under control.
In the last year or so, while milk prices were reasonably high it seems some farms may have taken their eye of the ball in this respect and Hollie Savage of Carter Jonas and James Shenton and Phil Cooper of the FCG all emphasised the need for farmers to analyse their business carefully, benchmarking their costs of production against competitors so as to identify where improvements can be made.
Similarly Paddy Gordon of Shepton Vets explained the importance of a farmer understanding all aspects of the herd’s health and importance of using your vet to provide regular consultancy advice rather than just calling the vet when an animal falls ill. In so doing Paddy illustrated how the cost of regular advice will be far outweighed by an increase in profits as mastitis can be brought under control and pregnancy rates increased.
Tom Ireland from Carter Jonas addressed other opportunities in relation of renewable energy issues in particular where he explained that there are still significant opportunities for farmers, although obtaining planning consent and locating an appropriate grid connection remain significant obstacles. However he also emphasised that as subsidies begin to fall, the profitability of a renewable energy installation will become increasingly reliant on understanding the farms energy needs and matching that to the electricity generated. This is because it will be increasing important to use your own electricity rather than exporting it to the grid because this will produce a much higher return.
So in conclusion, although it was acknowledged that some dairy farmers may leave the industry, the speakers were confident that the majority will survive. However, in order to receive a sensible return for the massive financial and time commitment required to run a successful dairy farm, hard work alone will not be enough; farmers will need a thorough understanding of their business and act to control costs in particular.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 1 December 2014
Catch me if you can
Last Friday I considered myself beyond privileged to meet the racing legend Frankel, my hero horse. It was a magical day made possible by the wonderful Jim Power who, not only was the Stud Groom for Banstead Manor Stud for many years but also, significantly, brought Frankel into the world. Frankel, the progeny of Galileo and Kind, was foaled at the stud on 11 Feburary 2008. In chocolate terms, my day with Jim Power and Frankel and, later, at the Newmarket Foal Sales was like winning the golden ticket for the Willy Wonka Factory. I was in horsey heaven.
I asked Jim when Frankel started to stand out amongst the crowd and he described him as "a lovely natured foal who owned the paddock”. He has described him as a “straightforward yet sensitive horse, with a slight air of arrogance about him - really top class racehorses often have that character.”
On Friday, Jim was quick to spot the high earners of the day as the fluffy foals were led around the paddock including top selling foal, son of Sea The Stars, purchased by Shadwell for 450,000 guineas.
Frankel raced 14 races and won all of them. Owned by Prince Khallid Abdullah, he is the first horse to be Champion at two, three and four-years old as well being crowned the Cartier Horse of the Year for two successive years in 2011 and 2012.
Frankel’s unquestionable supremacy translated into the exceptional prices achieved when his first two foals were sold: the first in June 2014 for £1.15m, whilst the second broke Irish records a week ago when it sold for 1.8m Euros (about £1.45million).
Yes, so much is down to the dam as well as the stallion, and Ireland’s success was much owing to the talent of the filly’s mother, Finsceal Beo (‘Living Legend’ in English) who won The 1,000 Guineas in 2007.
But what does this have to do with the residential sales market? Friday - my amazing day – was, surprisingly, a slow day for Frankel’s foals. The TV cameras were poised, the hype had been mounting, but out of his four foals due to be sold, the first was withdrawn following an over-excited jig in his stable and the following three did not meet their reserve prices, albeit one was subsequently sold to a privately increased bid.
I asked Jim Power what would happen to these adorable un-sold off-spring? How could they have not sold, despite their parentage and the amazing selling skills of three, non-stop-incentivising-supremely-knowledgeable auctioneers?
The talent was there, the genes were excellent, what more could one want? I truly felt for the owners and the auctioneers. It was no different to how I feel when I have launched an exceptional house to the market but I don’t find the buyer immediately, despite knowing the quality of what I am selling and promoting it with absolute gusto.
Jim’s answer was that the owners would probably wait until the Yearling Sales to re-present Frankel’s offspring to the market in order to achieve their deserved sum.
This is the property market too.
There are absolutely beautiful houses which have been brought to the market this autumn but have failed to sell. This isn’t down to their quality, however. Ask any estate agent (who really knows their salt) and the resolute answer to the question of “when is the best time to buy?” is: “NOW!”
We’re not saying this because we’re keen to get Christmas sales up, it’s because for a fourth year in a row we have not experienced the autumn market we were expecting.
We are in a new cycle. January and February are now key selling months.
January takes off at a gallop following the Christmas family ‘get-togethers’. Country Life, Rightmove & Zoopla report an annual peak of website hits in the latter part of Christmas Day. Decisions are made around the roast turkey and crackers and the newly-focused buyers want immediacy. They do not want to wait until the daffodils come out before a house is launched to the market.
This is why NOW is the right time to buy. Like Frankel’s unsold foals, look at what is out there now - don’t let the great and the brilliant pass you by - your ideal house may have already been withdrawn from the market only to be launched to the market in a few months time for a higher price. Call your agent now to discuss what is currently ‘hidden’ from the market. Vendors are more likely to consider genuine and unambitious offers this side of Christmas before the starting gates open in January. Unlike the retail market, you are likely to find your better purchase deal in the run up to Christmas - if you are waiting for the January sales you need not apply.
Finally, in estate agency, we often hear the expression “if it’s not meant to be, it’s not meant to be” – this expression frustrates me more than any other. If you want something don’t let it lie in the hand of fate - go for it. If you want a house - don’t hang about. Don’t be reserved in showing your agent your keenness to buy. It is your enthusiasm that gives us confidence in you and your genuineness which we, in turn, convey to our vendors. Enthusiasm also puts you at the top of our contact list for our ‘discreet’ properties which we are lining up for early 2015.
So, whilst I’m throwing fate out of the equation with my previous paragraph, I have noted something interesting: Frankel was born on 11 February 2008; his first foal was born on 11 January 2014 and our racing hero was trained by the legendary trainer, Henry Cecil, who was born on 11 January 1943.
Noticed anything? Apparently number 11 is considered to represent the Master Teacher which is believed to be an inspirational guiding light - someone who is highly charged, very powerful and leads the world.
I asked Jim when Frankel started to stand out amongst the crowd and he described him as "a lovely natured foal who owned the paddock”. He has described him as a “straightforward yet sensitive horse, with a slight air of arrogance about him - really top class racehorses often have that character.”
On Friday, Jim was quick to spot the high earners of the day as the fluffy foals were led around the paddock including top selling foal, son of Sea The Stars, purchased by Shadwell for 450,000 guineas.
Frankel raced 14 races and won all of them. Owned by Prince Khallid Abdullah, he is the first horse to be Champion at two, three and four-years old as well being crowned the Cartier Horse of the Year for two successive years in 2011 and 2012.
Frankel’s unquestionable supremacy translated into the exceptional prices achieved when his first two foals were sold: the first in June 2014 for £1.15m, whilst the second broke Irish records a week ago when it sold for 1.8m Euros (about £1.45million).
Yes, so much is down to the dam as well as the stallion, and Ireland’s success was much owing to the talent of the filly’s mother, Finsceal Beo (‘Living Legend’ in English) who won The 1,000 Guineas in 2007.
But what does this have to do with the residential sales market? Friday - my amazing day – was, surprisingly, a slow day for Frankel’s foals. The TV cameras were poised, the hype had been mounting, but out of his four foals due to be sold, the first was withdrawn following an over-excited jig in his stable and the following three did not meet their reserve prices, albeit one was subsequently sold to a privately increased bid.
I asked Jim Power what would happen to these adorable un-sold off-spring? How could they have not sold, despite their parentage and the amazing selling skills of three, non-stop-incentivising-supremely-knowledgeable auctioneers?
The talent was there, the genes were excellent, what more could one want? I truly felt for the owners and the auctioneers. It was no different to how I feel when I have launched an exceptional house to the market but I don’t find the buyer immediately, despite knowing the quality of what I am selling and promoting it with absolute gusto.
Jim’s answer was that the owners would probably wait until the Yearling Sales to re-present Frankel’s offspring to the market in order to achieve their deserved sum.
This is the property market too.
There are absolutely beautiful houses which have been brought to the market this autumn but have failed to sell. This isn’t down to their quality, however. Ask any estate agent (who really knows their salt) and the resolute answer to the question of “when is the best time to buy?” is: “NOW!”
We’re not saying this because we’re keen to get Christmas sales up, it’s because for a fourth year in a row we have not experienced the autumn market we were expecting.
We are in a new cycle. January and February are now key selling months.
January takes off at a gallop following the Christmas family ‘get-togethers’. Country Life, Rightmove & Zoopla report an annual peak of website hits in the latter part of Christmas Day. Decisions are made around the roast turkey and crackers and the newly-focused buyers want immediacy. They do not want to wait until the daffodils come out before a house is launched to the market.
This is why NOW is the right time to buy. Like Frankel’s unsold foals, look at what is out there now - don’t let the great and the brilliant pass you by - your ideal house may have already been withdrawn from the market only to be launched to the market in a few months time for a higher price. Call your agent now to discuss what is currently ‘hidden’ from the market. Vendors are more likely to consider genuine and unambitious offers this side of Christmas before the starting gates open in January. Unlike the retail market, you are likely to find your better purchase deal in the run up to Christmas - if you are waiting for the January sales you need not apply.
Finally, in estate agency, we often hear the expression “if it’s not meant to be, it’s not meant to be” – this expression frustrates me more than any other. If you want something don’t let it lie in the hand of fate - go for it. If you want a house - don’t hang about. Don’t be reserved in showing your agent your keenness to buy. It is your enthusiasm that gives us confidence in you and your genuineness which we, in turn, convey to our vendors. Enthusiasm also puts you at the top of our contact list for our ‘discreet’ properties which we are lining up for early 2015.
So, whilst I’m throwing fate out of the equation with my previous paragraph, I have noted something interesting: Frankel was born on 11 February 2008; his first foal was born on 11 January 2014 and our racing hero was trained by the legendary trainer, Henry Cecil, who was born on 11 January 1943.
Noticed anything? Apparently number 11 is considered to represent the Master Teacher which is believed to be an inspirational guiding light - someone who is highly charged, very powerful and leads the world.
Caroline Edwards
Partner
Residential Sales, Long Melford
T: 01787 888622
E: caroline.edwards@carterjonas.co.uk
Monday 17 November 2014
Quietly confident about the introduction of the BPS
DEFRA has recently published its latest update on the CAP reform rules which surround the introduction of the new Basic Payment Scheme (BPS) next year.
It is ironic that farmers are being urged by DEFRA not to delay registering themselves for the new Basic Payment Scheme (BPS), and yet the registration rollout programme itself has been delayed. With the memories of the disastrous introduction of the Single Payment Scheme (SPS) back in 2005 still heavily imprinted on the mind of most farmers and land agents, one hopes the current delay is not a portent of things to come.
However, a DEFRA spokesman has commented, “We have learned a lot of lessons from the past. What happened in 2005 is still in everyone’s mind – but that is not going to happen again”. Indeed having met a number of the senior Rural Payments Agency team myself earlier in the year, I genuinely think they have a much better grasp of what is required than was the case back in 2005.
Therefore I am quietly confident that the introduction of the BPS will go better than its predecessor scheme, but equally farmers should not underestimate the time that may be required getting registered on the new system and then learning how to use the online mapping tools and the new application process.
The most important initial step will be for farmers and land agents to verify their identity on line. This will involve logging on to the Gov.uk Verify website where your identity will be verified by one of five third-party identity assurance providers.
In order to do this farmers will be asked a number of questions about their personal circumstances and finances and to make this process go smoothly you will need either a current driver’s licence or passport and details of at least two of the following; bank account/credit card, personal loan or mortgage, gas or electricity bill, mobile phone contract or voter registration information.
It is understood that if you have all the necessary information to hand the registration process can be relatively simple and will only take 10 minutes or so but if not you will be directed to a telephone helpline and in extremis you will be able to contact a digital support centre, the nearest of which in this area is currently in Exeter.
However, unlike when the SPS was introduced in 2005, DEFRA has recognised the importance of the professional advisors who for many years have played a vital role in assisting farmers complete their application forms. Thus, with everything now having to be submitted online, DEFRA is encouraging professionals, such as land agents like myself, to help farmers get set up for the new digital era which is upon us whether we like it or not.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
It is ironic that farmers are being urged by DEFRA not to delay registering themselves for the new Basic Payment Scheme (BPS), and yet the registration rollout programme itself has been delayed. With the memories of the disastrous introduction of the Single Payment Scheme (SPS) back in 2005 still heavily imprinted on the mind of most farmers and land agents, one hopes the current delay is not a portent of things to come.
However, a DEFRA spokesman has commented, “We have learned a lot of lessons from the past. What happened in 2005 is still in everyone’s mind – but that is not going to happen again”. Indeed having met a number of the senior Rural Payments Agency team myself earlier in the year, I genuinely think they have a much better grasp of what is required than was the case back in 2005.
Therefore I am quietly confident that the introduction of the BPS will go better than its predecessor scheme, but equally farmers should not underestimate the time that may be required getting registered on the new system and then learning how to use the online mapping tools and the new application process.
The most important initial step will be for farmers and land agents to verify their identity on line. This will involve logging on to the Gov.uk Verify website where your identity will be verified by one of five third-party identity assurance providers.
In order to do this farmers will be asked a number of questions about their personal circumstances and finances and to make this process go smoothly you will need either a current driver’s licence or passport and details of at least two of the following; bank account/credit card, personal loan or mortgage, gas or electricity bill, mobile phone contract or voter registration information.
It is understood that if you have all the necessary information to hand the registration process can be relatively simple and will only take 10 minutes or so but if not you will be directed to a telephone helpline and in extremis you will be able to contact a digital support centre, the nearest of which in this area is currently in Exeter.
However, unlike when the SPS was introduced in 2005, DEFRA has recognised the importance of the professional advisors who for many years have played a vital role in assisting farmers complete their application forms. Thus, with everything now having to be submitted online, DEFRA is encouraging professionals, such as land agents like myself, to help farmers get set up for the new digital era which is upon us whether we like it or not.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 10 November 2014
Latest update on the CAP reform
DEFRA has recently published its latest update on the CAP reform rules which surround the introduction of the new Basic Payment Scheme (BPS) next year.
There are still areas of uncertainty but the long awaited rules concerning hedges and how they can be used to contribute to a farmer’s “Ecological Focus Area” (EFA) requirement have been clarified.
Any farmer who has more than 15 hectares of arable land will have to “set aside” 5% of their arable land as an EFA. There are some exemptions to this rule for farmers with a high proportion of grass but if these exemptions do not apply farmers will have to incorporate the appropriate EFAs in to their farming system.
There are five different types of EFA:
1.Fallow land
2.Hedges
3.Buffer Strips
4.Catch crops and cover crops
5.Nitrogen fixing crop
It is the rules concerning hedges which have been exercising farmers’ minds in this area because they are an obvious ecological resource which many would like to use towards their EFA requirements and now the rules have been clarified in what appears to be a reasonably sensible manner.
Basically every metre length of hedge is to be regarded as providing 10 sqm of EFA and so farmers will need to measure the length of qualifying hedges on their land to calculate the deemed EFA area. But importantly DEFRA have also clarified the definition of what will be considered to be a hedge and which hedges will qualify as an EFA.
As far as the definition of a hedge is concerned, there are no maximum or minimum width or height limits but the hedge must be more than 20m long and there must be less than 2m from the ground to the lowest leaves. Gaps of up to 20m, including gateways are allowed in hedges.
However, not all hedges will qualify as an EFA. It is only those hedges which are on or adjacent to arable land in the farmer’s control that will qualify although hedges which are separated from the arable land by an ineligible feature under the BPS rules, such as a ditch of more than 2m wide or a hard track will not qualify. If the hedge is separated from the arable land by a fence only the hedge will qualify.
If the farmer is responsible for farming both sides of the hedge, even if one side is in permanent pasture, then the full 10 sqm per m length of hedge can be claimed but if the other side of the hedge is farmed by another farmer then only 5 sqm can be claimed. If the other side of the hedge is a road, the farmer can make a full claim.
Finally DEFRA had originally stated that using hedges to contribute to a farmer’s EFA requirements may result in a delay in the farmer receiving payment of the BPS in 2015. However, DEFRA have now said there may not be delays as they are looking into an ‘approach’ to prevent this. What this will be we do not know but it seems DEFRA are backtracking a little on their previous warning.
Therefore, although there is still plenty of work to be done before the first BPS claims can be made next year, some of the crucial detail is beginning to become clear.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
There are still areas of uncertainty but the long awaited rules concerning hedges and how they can be used to contribute to a farmer’s “Ecological Focus Area” (EFA) requirement have been clarified.
Any farmer who has more than 15 hectares of arable land will have to “set aside” 5% of their arable land as an EFA. There are some exemptions to this rule for farmers with a high proportion of grass but if these exemptions do not apply farmers will have to incorporate the appropriate EFAs in to their farming system.
There are five different types of EFA:
1.Fallow land
2.Hedges
3.Buffer Strips
4.Catch crops and cover crops
5.Nitrogen fixing crop
It is the rules concerning hedges which have been exercising farmers’ minds in this area because they are an obvious ecological resource which many would like to use towards their EFA requirements and now the rules have been clarified in what appears to be a reasonably sensible manner.
Basically every metre length of hedge is to be regarded as providing 10 sqm of EFA and so farmers will need to measure the length of qualifying hedges on their land to calculate the deemed EFA area. But importantly DEFRA have also clarified the definition of what will be considered to be a hedge and which hedges will qualify as an EFA.
As far as the definition of a hedge is concerned, there are no maximum or minimum width or height limits but the hedge must be more than 20m long and there must be less than 2m from the ground to the lowest leaves. Gaps of up to 20m, including gateways are allowed in hedges.
However, not all hedges will qualify as an EFA. It is only those hedges which are on or adjacent to arable land in the farmer’s control that will qualify although hedges which are separated from the arable land by an ineligible feature under the BPS rules, such as a ditch of more than 2m wide or a hard track will not qualify. If the hedge is separated from the arable land by a fence only the hedge will qualify.
If the farmer is responsible for farming both sides of the hedge, even if one side is in permanent pasture, then the full 10 sqm per m length of hedge can be claimed but if the other side of the hedge is farmed by another farmer then only 5 sqm can be claimed. If the other side of the hedge is a road, the farmer can make a full claim.
Finally DEFRA had originally stated that using hedges to contribute to a farmer’s EFA requirements may result in a delay in the farmer receiving payment of the BPS in 2015. However, DEFRA have now said there may not be delays as they are looking into an ‘approach’ to prevent this. What this will be we do not know but it seems DEFRA are backtracking a little on their previous warning.
Therefore, although there is still plenty of work to be done before the first BPS claims can be made next year, some of the crucial detail is beginning to become clear.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday 4 November 2014
Our ping-pong recovery
It was exactly three years ago when I was advised that ‘being on the brink is the new normal’ for what, at the time, was the foreseeable future. In 2011, many weren’t willing to assign a specific number of years to ‘the foreseeable future’ but I think we can say that, three years on, we are back from the brink, economically.
Yet as many economic and financial commentators judge, the country is still in a strange state of being where one set of indicators suggesting positive news is offset by another giving a gloomier gloss to our recovery. Yes, the economy is growing but there will be a shortfall on the deficit above £100 billion by the end of this year.
One Eurozone economist recently characterised the UK’s growth as ‘the wrong type of growth’. Much like the seasonal ‘leaves on the line’, it’s probably the best explanation for the feed of ping-pong, back and forth, contradictory economic data this autumn and the balancing act those politicians charged with running the country are having to perform day-in and day-out as our recovery plays out.
Perhaps the bruising economic experience the UK has endured since 2008 has changed our perceptions of what amounts to recovery. Pre-crisis, debt-levels being 40 per cent of national output were considered high but now it’s 80 per cent which is the trigger point at which the credit rating agencies talk about withdrawing our triple AAA status.
The shortfall on the deficit by this year’s end would have been considered big in times past at 6-7 per cent of national output but it is not as big as it was at its 9-10 per cent peak in 2008/2009.
In October, published figures recorded that unemployment had fallen below the 2 million mark for the first time in six years. But in this current tax year of 2014/15, income tax receipts are up by just 0.1 per cent yet outlay on social benefit payments has gone down.
Wage inflation runs at just 1 per cent at this point in our recovery but the Bank of England is anticipating 3 per cent wage inflation by the end of next year and therefore tax receipts will be up.
It may feel like a heavy trudge through the recovery now but many analysts are convinced there is good news in the pipeline and, thankfully, the wisest market operators will always invest for the long term.
Before that, we have the General Election in May and all bets are off that the Chancellor of the Exchequer’s Autumn Statement – scheduled for early December – will be anything else but a necessary political and economic balancing act of ‘Austerity Lite’. There is likely to be further squeezing of public expenditure but the pinch will not be as nippingly sore as it was in the early years of this administration.
In this ping-pong recovery of ours – in which we are growing faster than Germany - whether it’s politics which is the foil to economics or vice versa, balancing is not an act: it is the reality.
Much as we did in 2011, we are going to have to accept this new reality of our recovery for the foreseeable future.
Yet as many economic and financial commentators judge, the country is still in a strange state of being where one set of indicators suggesting positive news is offset by another giving a gloomier gloss to our recovery. Yes, the economy is growing but there will be a shortfall on the deficit above £100 billion by the end of this year.
One Eurozone economist recently characterised the UK’s growth as ‘the wrong type of growth’. Much like the seasonal ‘leaves on the line’, it’s probably the best explanation for the feed of ping-pong, back and forth, contradictory economic data this autumn and the balancing act those politicians charged with running the country are having to perform day-in and day-out as our recovery plays out.
Perhaps the bruising economic experience the UK has endured since 2008 has changed our perceptions of what amounts to recovery. Pre-crisis, debt-levels being 40 per cent of national output were considered high but now it’s 80 per cent which is the trigger point at which the credit rating agencies talk about withdrawing our triple AAA status.
The shortfall on the deficit by this year’s end would have been considered big in times past at 6-7 per cent of national output but it is not as big as it was at its 9-10 per cent peak in 2008/2009.
In October, published figures recorded that unemployment had fallen below the 2 million mark for the first time in six years. But in this current tax year of 2014/15, income tax receipts are up by just 0.1 per cent yet outlay on social benefit payments has gone down.
Wage inflation runs at just 1 per cent at this point in our recovery but the Bank of England is anticipating 3 per cent wage inflation by the end of next year and therefore tax receipts will be up.
It may feel like a heavy trudge through the recovery now but many analysts are convinced there is good news in the pipeline and, thankfully, the wisest market operators will always invest for the long term.
Before that, we have the General Election in May and all bets are off that the Chancellor of the Exchequer’s Autumn Statement – scheduled for early December – will be anything else but a necessary political and economic balancing act of ‘Austerity Lite’. There is likely to be further squeezing of public expenditure but the pinch will not be as nippingly sore as it was in the early years of this administration.
In this ping-pong recovery of ours – in which we are growing faster than Germany - whether it’s politics which is the foil to economics or vice versa, balancing is not an act: it is the reality.
Much as we did in 2011, we are going to have to accept this new reality of our recovery for the foreseeable future.
Will Mooney MRICS
Partner
Commercial, Cambridge
Monday 3 November 2014
Continue to be battered by bad news
Dairy farmers continue to be battered by bad news as the milk price continues to tumble although it is not an even playing field across the many different milk supply contracts on offer.
Worst hit at present appear to be farmers supplying First Milk which is a farmer owned co-op whose suppliers/members seem to be badly exposed to the world milk commodity prices which also continue to fall. Suppliers of First Milk have received the unwelcome news that the price for their liquid milk and manufacturing contracts will be falling by 1.4p/litre and 1.8p/litre respectively in December to 22.7p/litre for liquid and 24p/litre for manufacturing milk.
Many of the other milk buyers have also announced cuts including Arla, which has reduced the price for its farmers on their “direct supply” contract by 3p. These farmers are not Arla members and perhaps as a consequence of this, Arla has chosen reduce their price milk rather than that paid to its members, explaining that the direct supply milk was surplus to retail demand and was therefore only attracting commodity prices.
Thus, although all farmers will be affected by the fall in milk prices some farmers are being disproportionately badly affected. In light of this it seems to me that getting on the right milk contract is probably one of the most important business decisions many dairy farmers should be considering and I cannot see how farmers supplying a buyer such as First Milk will survive for any length of time with a milk price as low as 22.7p/litre.
Indeed I would imagine this must bring in to question the sustainability of First Milk as a business because I can only imagine many of their suppliers, despite being owners of the business as well as suppliers, will be seriously looking at their options, whether that be looking to switch to another milk purchaser, or perhaps even stopping dairy farming altogether.
The Chairman of First Milk, Jim Paice who previously served as farm minister in DEFRA during the peak of the milk price protests in 2012, blamed the price cuts on a drop in returns for liquid milk and cheese in the past month.
“With cheese specifically, this impacts not only on what we are selling now, but on the price that we can sell our cheese stocks for in the future,” added Jim Paice.
But even so, it must be galling for First Milk members to see other dairy farmers still being paid nearer 30p than 20p/litre for producing exactly the same product.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Worst hit at present appear to be farmers supplying First Milk which is a farmer owned co-op whose suppliers/members seem to be badly exposed to the world milk commodity prices which also continue to fall. Suppliers of First Milk have received the unwelcome news that the price for their liquid milk and manufacturing contracts will be falling by 1.4p/litre and 1.8p/litre respectively in December to 22.7p/litre for liquid and 24p/litre for manufacturing milk.
Many of the other milk buyers have also announced cuts including Arla, which has reduced the price for its farmers on their “direct supply” contract by 3p. These farmers are not Arla members and perhaps as a consequence of this, Arla has chosen reduce their price milk rather than that paid to its members, explaining that the direct supply milk was surplus to retail demand and was therefore only attracting commodity prices.
Thus, although all farmers will be affected by the fall in milk prices some farmers are being disproportionately badly affected. In light of this it seems to me that getting on the right milk contract is probably one of the most important business decisions many dairy farmers should be considering and I cannot see how farmers supplying a buyer such as First Milk will survive for any length of time with a milk price as low as 22.7p/litre.
Indeed I would imagine this must bring in to question the sustainability of First Milk as a business because I can only imagine many of their suppliers, despite being owners of the business as well as suppliers, will be seriously looking at their options, whether that be looking to switch to another milk purchaser, or perhaps even stopping dairy farming altogether.
The Chairman of First Milk, Jim Paice who previously served as farm minister in DEFRA during the peak of the milk price protests in 2012, blamed the price cuts on a drop in returns for liquid milk and cheese in the past month.
“With cheese specifically, this impacts not only on what we are selling now, but on the price that we can sell our cheese stocks for in the future,” added Jim Paice.
But even so, it must be galling for First Milk members to see other dairy farmers still being paid nearer 30p than 20p/litre for producing exactly the same product.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 27 October 2014
New era for supermarkets
When Tesco reported a 92% fall in profits last week this was not only a massive shock to its shareholders but I think it will herald a new era of in the world of supermarkets which could have serious ramifications for suppliers.
My concern is heightened by the rhetoric coming from retail analyst, Clive Black, following a meeting with Dave Lewis, the CEO of Tesco where Mr Black said, “Tesco will have to invest in price” and “considerable cost reductions will lead to more responsibility for suppliers”.
This seems to be “marketing speak” for Tesco reducing their prices at the cost of their suppliers, many of whom in the world of agriculture, are struggling at present with farm commodity prices at a low ebb. One only has to look at the impact that the supermarket price war on milk has had on the dairy industry in recent months to understand the difficulties this will create for the wider food and farming industry if similar price pressure is brought to bear on all products.
It is appreciated the recent fall in milk price has not been entirely driven by the downward pressure on the milk price in supermarkets but this has surely contributed to the malaise that currently afflicts the diary industry.
So, with Tesco in trouble and most other supermarkets all chasing prices down this is a worry for farmers and the wider food processing industry, which plays a significant role in our local economy.
However, Tesco is certainly going to have to do something radical because it does seem to have lost the trust of its customer base. This must be a big concern and although providing cheaper food is obviously going to be an important aspect of its recovery plan, I do also wonder how impressed customers will be if Tesco’s “investment in price” turns out to be at the cost of its suppliers rather than its shareholders and the senior management team who have done very well for many years.
Farmers and supermarkets often have a fractious relationship and it seems to me this relationship is likely to be more rather than less strained while the supermarkets vie for supremacy in an ever more price sensitive market place.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
My concern is heightened by the rhetoric coming from retail analyst, Clive Black, following a meeting with Dave Lewis, the CEO of Tesco where Mr Black said, “Tesco will have to invest in price” and “considerable cost reductions will lead to more responsibility for suppliers”.
This seems to be “marketing speak” for Tesco reducing their prices at the cost of their suppliers, many of whom in the world of agriculture, are struggling at present with farm commodity prices at a low ebb. One only has to look at the impact that the supermarket price war on milk has had on the dairy industry in recent months to understand the difficulties this will create for the wider food and farming industry if similar price pressure is brought to bear on all products.
It is appreciated the recent fall in milk price has not been entirely driven by the downward pressure on the milk price in supermarkets but this has surely contributed to the malaise that currently afflicts the diary industry.
So, with Tesco in trouble and most other supermarkets all chasing prices down this is a worry for farmers and the wider food processing industry, which plays a significant role in our local economy.
However, Tesco is certainly going to have to do something radical because it does seem to have lost the trust of its customer base. This must be a big concern and although providing cheaper food is obviously going to be an important aspect of its recovery plan, I do also wonder how impressed customers will be if Tesco’s “investment in price” turns out to be at the cost of its suppliers rather than its shareholders and the senior management team who have done very well for many years.
Farmers and supermarkets often have a fractious relationship and it seems to me this relationship is likely to be more rather than less strained while the supermarkets vie for supremacy in an ever more price sensitive market place.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Tuesday 21 October 2014
Lack of gas safety certification will have major consequences
British Gas has revealed that 14 per cent of landlords among their customers who took part in a survey knew nothing about gas safety regulations.
It would be nice to think they had just sampled the wrong customers but that’s not likely to be the case.
With recent prosecutions seeing several landlords fined heavily for not having gas safety certificates for their properties and the startling results of that survey, perhaps it’s timely to remind all our landlords that gas safety inspections are a vital part of being a responsible landlord.
Sometimes it’s easier to remember essential electrical safety checks just because the signs of the power source are so obvious with sockets and plugs in virtually every room.
Gas, though, especially when powering hidden equipment such as boilers, is less apparent and much easier to ignore. Sadly, when things do go awry it’s also more difficult to detect. True, straightforward leaks are apparent by the smell of the escaping gas but when a gas appliance malfunctions in its combustion or exhaust processes the resulting leak of CO, a highly toxic and invisible gas with no odour, can have disastrous consequences. Victims of CO poisoning can, at worst, drift totally unaware into a deep sleep from which they never awaken.
Every landlord should ensure that all gas supplies and appliances are checked and certificated every year without fail. Where we are instructed to manage your property, we will arrange this on your behalf.
It would be nice to think they had just sampled the wrong customers but that’s not likely to be the case.
With recent prosecutions seeing several landlords fined heavily for not having gas safety certificates for their properties and the startling results of that survey, perhaps it’s timely to remind all our landlords that gas safety inspections are a vital part of being a responsible landlord.
Sometimes it’s easier to remember essential electrical safety checks just because the signs of the power source are so obvious with sockets and plugs in virtually every room.
Gas, though, especially when powering hidden equipment such as boilers, is less apparent and much easier to ignore. Sadly, when things do go awry it’s also more difficult to detect. True, straightforward leaks are apparent by the smell of the escaping gas but when a gas appliance malfunctions in its combustion or exhaust processes the resulting leak of CO, a highly toxic and invisible gas with no odour, can have disastrous consequences. Victims of CO poisoning can, at worst, drift totally unaware into a deep sleep from which they never awaken.
Every landlord should ensure that all gas supplies and appliances are checked and certificated every year without fail. Where we are instructed to manage your property, we will arrange this on your behalf.
Lisa Simon,
Partner Head of Residential Lettings
T: 020 7518 3234
Thursday 16 October 2014
Garden Cities on their own could only ever be a small part of the solution
Lord Wolfson’s recent Garden Cities Competition has really put the cat among the pigeons. A lavish bash at the RIBA was held to announce the winner of the £250,000 prize for a new Garden City concept which was visionary, financially viable and popular. Gossip at the pre-dinner drinks cited this as a somewhat cynical attempt to show that the Coalition Government was addressing the current housing crisis, but if it was it certainly backfired - with an immediate response from the housing minister vowing never ever to build on the Greenbelt (or at least until after the general election).
The irony of this announcement will not be lost on those who have actually read Ebenezer Howard’s work. Although enormously influential across the world, only two towns of just over 30,000 people were ever built in the UK, and neither followed his ideal model of a hub city surrounded by half a dozen satellite cities. This helps to explain, apart from the cosy-sounding name, why they are so popular and why everyone was so panicked by the winning competition entry’s proposal to build some 40 new cities up and down the country. Heavens, this sounds perilously like a new towns programme which is generally considered to be political suicide. The other irony is that Howard actually invented the concept of the Green Belt as a device to separate and protect the sanctity of his settlements, but once they are all over the place there is a great danger of continuous coalescence. This is pretty much what London and its commuting hinterland is now, and many people find it works quite well – London effectively already spreads from Bedford to Epsom.
The one fundamental point remains – we are massively short of housing, and Garden Cities on their own could only ever be a small part of the solution. We probably need new cities, new towns, urban extensions, urban intensification and urban regeneration, and a whole lot more besides. And we almost certainly need it on both green fields and brownfield land. Change is inevitable in both popular and less desirable areas alike, and people need to stop being such short-sighted Nimbys.
Laws passed in the time of Elizabeth I to limit the spread of London proved unsuccessful, and there is no certainty that they will be more successful today. What a delicious irony that St Martin in the Fields is sited in Trafalgar Square which most people feel is now the centre of a world-class metropolis.
John Phillipps,
The irony of this announcement will not be lost on those who have actually read Ebenezer Howard’s work. Although enormously influential across the world, only two towns of just over 30,000 people were ever built in the UK, and neither followed his ideal model of a hub city surrounded by half a dozen satellite cities. This helps to explain, apart from the cosy-sounding name, why they are so popular and why everyone was so panicked by the winning competition entry’s proposal to build some 40 new cities up and down the country. Heavens, this sounds perilously like a new towns programme which is generally considered to be political suicide. The other irony is that Howard actually invented the concept of the Green Belt as a device to separate and protect the sanctity of his settlements, but once they are all over the place there is a great danger of continuous coalescence. This is pretty much what London and its commuting hinterland is now, and many people find it works quite well – London effectively already spreads from Bedford to Epsom.
The one fundamental point remains – we are massively short of housing, and Garden Cities on their own could only ever be a small part of the solution. We probably need new cities, new towns, urban extensions, urban intensification and urban regeneration, and a whole lot more besides. And we almost certainly need it on both green fields and brownfield land. Change is inevitable in both popular and less desirable areas alike, and people need to stop being such short-sighted Nimbys.
Laws passed in the time of Elizabeth I to limit the spread of London proved unsuccessful, and there is no certainty that they will be more successful today. What a delicious irony that St Martin in the Fields is sited in Trafalgar Square which most people feel is now the centre of a world-class metropolis.
John Phillipps,
Consultant, Masterplanning
T: 020 7016 0726
Tuesday 14 October 2014
Somerset Cheese: The Great Taste Awards
With all the doom and gloom surrounding the dairy industry at present it is nice to be able to report on a success story in the form of the Somerset Cheese Company which has recently won a Great Taste Award.
The Great Taste Awards which are organised by the Guild of Fine Food, is the acknowledged benchmark for speciality food and drink. It has been described as the ‘Oscars’ of the food world and the ‘epicurean equivalent of the Booker prize’. Quite simply the Great Taste logo is the sign you can trust when buying food and drink in your local, quality retailer.
Therefore it was a great honour, when Anita Robinson and business partner and fellow cheesemaker, Philip Rainbow attended the The Royal Garden Hotel, Kensington and won the “Woman and Home Great Taste VIP Award” for one of their cheeses, Pennard Ridge.
Jane Curren, Food Director for Woman & Home and Woman & Home Feel Good Food explained, “Somerset Cheese appeared in the May/June issue of Feel Good Food this year. We feature producers who have won stars at the Great Taste Awards. We are a media partner of Great Taste and every year we give an award. We select a shortlist of producers which we call VIPs, Very Important Producers. The shortlist then goes up on our website and our readers vote for their favourite. Somerset Cheese must have a lot of fans as they were the outright winners! It is very much part of our DNA at Woman & Home and Feel Good Food to promote smaller producers who are doing great things.”
The Somerset Cheese Company, based in Ditcheat, is a young company founded by long-term friends Philip Rainbow, and Nicholas and Anita Robinson. Philip has over 40 years experience in the craft of cheese making and his expertise is well renowned and respected. He has won awards in both national and international shows on a regular basis.
Philip and Anita worked together for many years before the Somerset Cheese Co. was formed, Philip was the head cheese maker for a renowned local dairy and Anita was his assistant.
Now they have combined their individual talents along with Anita’s husband Nick who brings a wealth of day to day business knowledge.
Using high quality milk that is sourced directly from the farm, and as local as possible, the Somerset Cheese Company specialises in adapting traditional style recipes to produce characterful, naturally rinded cheese from sheep, goat, buffalo and cows milk.
So why not try some of their excellent cheeses; I have and they are delicious. We even got the thumbs up from some hungry dairy farmers when we featured one of their cheeses on Carter Jonas’ stand at the Dairy Show which was held recently at the Bath and West Showground.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
The Great Taste Awards which are organised by the Guild of Fine Food, is the acknowledged benchmark for speciality food and drink. It has been described as the ‘Oscars’ of the food world and the ‘epicurean equivalent of the Booker prize’. Quite simply the Great Taste logo is the sign you can trust when buying food and drink in your local, quality retailer.
Therefore it was a great honour, when Anita Robinson and business partner and fellow cheesemaker, Philip Rainbow attended the The Royal Garden Hotel, Kensington and won the “Woman and Home Great Taste VIP Award” for one of their cheeses, Pennard Ridge.
Jane Curren, Food Director for Woman & Home and Woman & Home Feel Good Food explained, “Somerset Cheese appeared in the May/June issue of Feel Good Food this year. We feature producers who have won stars at the Great Taste Awards. We are a media partner of Great Taste and every year we give an award. We select a shortlist of producers which we call VIPs, Very Important Producers. The shortlist then goes up on our website and our readers vote for their favourite. Somerset Cheese must have a lot of fans as they were the outright winners! It is very much part of our DNA at Woman & Home and Feel Good Food to promote smaller producers who are doing great things.”
The Somerset Cheese Company, based in Ditcheat, is a young company founded by long-term friends Philip Rainbow, and Nicholas and Anita Robinson. Philip has over 40 years experience in the craft of cheese making and his expertise is well renowned and respected. He has won awards in both national and international shows on a regular basis.
Philip and Anita worked together for many years before the Somerset Cheese Co. was formed, Philip was the head cheese maker for a renowned local dairy and Anita was his assistant.
Now they have combined their individual talents along with Anita’s husband Nick who brings a wealth of day to day business knowledge.
Using high quality milk that is sourced directly from the farm, and as local as possible, the Somerset Cheese Company specialises in adapting traditional style recipes to produce characterful, naturally rinded cheese from sheep, goat, buffalo and cows milk.
So why not try some of their excellent cheeses; I have and they are delicious. We even got the thumbs up from some hungry dairy farmers when we featured one of their cheeses on Carter Jonas’ stand at the Dairy Show which was held recently at the Bath and West Showground.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Monday 13 October 2014
New code will help tenants and landlords
The Private Rented Sector Code of Practice endorsed, and commissioned, by the Government and drawn up by the Royal Institution of Chartered Surveyors (RICS) has launched.
Another 16 industry bodies, including ARLA and The Property Ombudsman to which, with RICS, we are affiliated, joined RICS in its creation. Some key points of the code affecting landlords are:
- Landlords should choose agents who are members of an accredited body; belong to an independent redress scheme; have client money protection; and have insurances such as professional indemnity.
- Agents should keep client money separate, in a dedicated client account which should be in credit at all times and kept in an FCA-authorised bank or building society. Any interest earned on client money should be credited to the client or tenant.
-Agents should declare any commission received from the repair and maintenance contractors at the time that estimates for work are provided to the landlord.
-Carbon monoxide detectors should be provided in all properties with a gas or solid fuel appliance.
Electrical certificates should be provided to the tenant. Full wiring tests should be carried out every ten years (five years in HMOs). There should also be regular portable appliance tests (PATs).
-If the tenant refuses access, neither landlord nor agent can enter without a court order.
It’s all fairly straightforward but the difficulty has always been that many tenants, and quite a number of landlords, don’t know what to look for when they are seeking a property to live in or, in the case of a landlord, someone to manage a letting on their behalf.
Hopefully, this new guidance will make life easier for those who need to buy rather than rent and we are looking to put all parts of it into practice.
The Code can be downloaded here.
Another 16 industry bodies, including ARLA and The Property Ombudsman to which, with RICS, we are affiliated, joined RICS in its creation. Some key points of the code affecting landlords are:
- Landlords should choose agents who are members of an accredited body; belong to an independent redress scheme; have client money protection; and have insurances such as professional indemnity.
- Agents should keep client money separate, in a dedicated client account which should be in credit at all times and kept in an FCA-authorised bank or building society. Any interest earned on client money should be credited to the client or tenant.
-Agents should declare any commission received from the repair and maintenance contractors at the time that estimates for work are provided to the landlord.
-Carbon monoxide detectors should be provided in all properties with a gas or solid fuel appliance.
Electrical certificates should be provided to the tenant. Full wiring tests should be carried out every ten years (five years in HMOs). There should also be regular portable appliance tests (PATs).
-If the tenant refuses access, neither landlord nor agent can enter without a court order.
It’s all fairly straightforward but the difficulty has always been that many tenants, and quite a number of landlords, don’t know what to look for when they are seeking a property to live in or, in the case of a landlord, someone to manage a letting on their behalf.
Hopefully, this new guidance will make life easier for those who need to buy rather than rent and we are looking to put all parts of it into practice.
Lisa Simon,
Partner Head of Residential Lettings
T: 020 7518 3234
Monday 6 October 2014
Single Payment Scheme payments: the lowest in 7 years
The value of this year’s Single Payment Scheme (SPS) payments was set last week at 77.7 pence per Euro which is the lowest rate for 7 years. The Single Payments, which are defined in Euros, are converted to Sterling in order to be paid to British farmers, based on the Euro/Sterling exchange rate on 30th September.
This will come as unwelcome news to farmers who are already facing difficult trading conditions as wheat prices have plummeted to around £100 per tonne while milk prices continue to fall with most dairy farmers now being paid below 30 pence per litre for their milk and some as little as 25 pence per litre. At these prices farmers will be losing money and with European support payments also falling farmers are facing a tough year ahead.
It is estimated the Single Payment received by farmers this year will be approximately 12% less than last year which is in part due to the exchange rate referred to above but also due to other deductions.
These other deductions include 10% compulsory modulation and a 12% transfer from direct payments (Pillar 1) to rural development (Pillar 2). Together these total 22% which is 3% higher than the deductions imposed in 2013. In addition there is also a 1.6% cut in the UK CAP budget and the European Commission’s Financial Discipline Mechanism (FDM) will also be imposed on those farmers receiving more than 2000 Euros. The FDM rate is currently proposed to be 1.3% although this could vary up or down.
NFU vice-president Guy Smith commented, “For many farmers, looking at increasingly tight cashflow projections in the face of plummeting commodity prices, news that SPS payments are also going to be down will feel like another unwelcome turn of the financial screw.
“Farmers should always be wary of crying ‘wolf’ too early but many of us are getting nervous that there might be some serious financial difficulties on the horizon at the moment,” he said.
So, farmers are definitely feeling the pinch and this was evident at the Dairy Show held at the Bath and West showground on 1st October. Although the show itself appeared to be a great success there were definitely a lot of worried dairy farmers around although opinion appeared to be divided as to how to deal with the falling milk prices. Some favoured direct action while others seemed resigned to the fact that world commodity prices have fallen sharply and this was the primary driver as to why prices have fallen sharply.
However I think all were agreed that they need to be treated fairly by the various milk purchasers so as to ensure farmers are not taking an unfair proportion of the burden imposed on the whole industry by the fall in world commodity prices. It is clarity on this particular point which I think needs to be sorted urgently.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
This will come as unwelcome news to farmers who are already facing difficult trading conditions as wheat prices have plummeted to around £100 per tonne while milk prices continue to fall with most dairy farmers now being paid below 30 pence per litre for their milk and some as little as 25 pence per litre. At these prices farmers will be losing money and with European support payments also falling farmers are facing a tough year ahead.
It is estimated the Single Payment received by farmers this year will be approximately 12% less than last year which is in part due to the exchange rate referred to above but also due to other deductions.
These other deductions include 10% compulsory modulation and a 12% transfer from direct payments (Pillar 1) to rural development (Pillar 2). Together these total 22% which is 3% higher than the deductions imposed in 2013. In addition there is also a 1.6% cut in the UK CAP budget and the European Commission’s Financial Discipline Mechanism (FDM) will also be imposed on those farmers receiving more than 2000 Euros. The FDM rate is currently proposed to be 1.3% although this could vary up or down.
NFU vice-president Guy Smith commented, “For many farmers, looking at increasingly tight cashflow projections in the face of plummeting commodity prices, news that SPS payments are also going to be down will feel like another unwelcome turn of the financial screw.
“Farmers should always be wary of crying ‘wolf’ too early but many of us are getting nervous that there might be some serious financial difficulties on the horizon at the moment,” he said.
So, farmers are definitely feeling the pinch and this was evident at the Dairy Show held at the Bath and West showground on 1st October. Although the show itself appeared to be a great success there were definitely a lot of worried dairy farmers around although opinion appeared to be divided as to how to deal with the falling milk prices. Some favoured direct action while others seemed resigned to the fact that world commodity prices have fallen sharply and this was the primary driver as to why prices have fallen sharply.
However I think all were agreed that they need to be treated fairly by the various milk purchasers so as to ensure farmers are not taking an unfair proportion of the burden imposed on the whole industry by the fall in world commodity prices. It is clarity on this particular point which I think needs to be sorted urgently.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
Friday 3 October 2014
Breaking up is hard to do
While it’s not Scots away, Will Mooney, Carter Jonas partner and head of its commercial agency and professional services in the eastern region, wonders what the genie might get up to if it refuses to go back in its bottle.
Being Northern Irish, I’m no stranger to the damaging effects of political division and and the negative economic impact schism can have on successive generations. I’d suggest that those of us with Celtic origins followed Scotland’s Independence Referendum with a keener eye than our Anglo-Saxon peers – at least until that September weekend when that poll mobilised Westminster’s biggest guns.
The financial markets reacted in the way they always do to uncertainty. Yet, at the same time, how could a ‘little local difficulty’ in the United Kingdom influence global capital and currency markets when there is so much else going on on the international stage?
Cue a number of high profile businesses and corporate interests who expressed their concern or hinted what the consequences might be if expected to do business with, or in, a post-independent Caledonia.
Pro-independence business commentators countered by making the distinction between uncertainty and risk. Do people become entrepreneurs because they take risks or do you have to be a risk taker, first, in order to become an entreprenuer? What has to be certain before a risk becomes designated as a calculated risk and, thereby, worth taking?
In these weeks following the referendum result, there is the sense that many of the old certainties of The Union have gone or are going or are changing or are being challenged.
Not being sophisticated in the ways of psephology, I can’t say whether a 10 per cent differential in favour of remaining part of the United Kingdom is a close run thing or not. But there’s no denying that the referendum debate, has opened-up another layer of debate about a more federated British Isles.
It’s to be hoped that this opening will not become a fissure because, apart from anything else, that’s not our style of doing things in any part of Britain.
The turbo-charged timescale suggested for further devolutionary powers for Scotland - more Devo-medium than Devo-max, as it turns out - promised by the three mainstream party leaders pre-referendum has raised some eyebrows, not least of all those of the Whitehall mandarins who will be charged in getting legislation through in time for Burn’s Night on 25 January, or not.
Being Northern Irish, I’m no stranger to the damaging effects of political division and and the negative economic impact schism can have on successive generations. I’d suggest that those of us with Celtic origins followed Scotland’s Independence Referendum with a keener eye than our Anglo-Saxon peers – at least until that September weekend when that poll mobilised Westminster’s biggest guns.
The financial markets reacted in the way they always do to uncertainty. Yet, at the same time, how could a ‘little local difficulty’ in the United Kingdom influence global capital and currency markets when there is so much else going on on the international stage?
Cue a number of high profile businesses and corporate interests who expressed their concern or hinted what the consequences might be if expected to do business with, or in, a post-independent Caledonia.
Pro-independence business commentators countered by making the distinction between uncertainty and risk. Do people become entrepreneurs because they take risks or do you have to be a risk taker, first, in order to become an entreprenuer? What has to be certain before a risk becomes designated as a calculated risk and, thereby, worth taking?
In these weeks following the referendum result, there is the sense that many of the old certainties of The Union have gone or are going or are changing or are being challenged.
Not being sophisticated in the ways of psephology, I can’t say whether a 10 per cent differential in favour of remaining part of the United Kingdom is a close run thing or not. But there’s no denying that the referendum debate, has opened-up another layer of debate about a more federated British Isles.
It’s to be hoped that this opening will not become a fissure because, apart from anything else, that’s not our style of doing things in any part of Britain.
The turbo-charged timescale suggested for further devolutionary powers for Scotland - more Devo-medium than Devo-max, as it turns out - promised by the three mainstream party leaders pre-referendum has raised some eyebrows, not least of all those of the Whitehall mandarins who will be charged in getting legislation through in time for Burn’s Night on 25 January, or not.
Will Mooney MRICS
Partner
Commercial, Cambridge
Monday 29 September 2014
Great produce at the great Wells Food Festival
With many commodity prices on the slide farmers are feeling the pinch and yet the food and drink industry represents a very important part of our economy in the south west. Therefore it is important that both sectors recognise the importance of each other and work together for mutual benefit.
In this context any event which promotes the importance of food, its connection to local producers and the community within which the food is produced and consumed must be a good thing.
Therefore it is great news that after last year’s successful inaugural event, the second Wells Food Festival is scheduled to take place on Sunday 12th October. The event aims to celebrate the best of Somerset’s local produce featuring over 50 stalls manned by artisan food producers.
But the event goes further than just celebrating food itself; education and broadening people’s horizons is also important. For instance, one of the great successes of last year was the invitation which was extended by TV chef Valentina Harris to 10 pupils from the Blue School in Wells who, having helped with the Great Somerset Lunch 2013, were invited to the Universita dei Sapori, a state-of-the-art cookery school in Perugia, Italy. In return, this year the Food Festival organisers have invited 10 students from Perugia to come to Wells to help prepare a superb Italian Sunday lunch using Somerset produce.
In addition to the Italian lunch, chef Tom Hunt will be hosting the Forgotten Feast’s Autumn Banquet where the emphasis will be on using produce that may be rejected by the picky buyers of supermarkets and other retail outlets. In so doing he will try to open everyone’s eyes to the wastefulness of some of our current practices by producing a delicious seasonal feast prepared from the abundance of Somerset’s autumn produce, much of which is forgotten, unused or otherwise going to waste.
The festival will include a whole host of other events including kids activities, a vintage tea party, food related talks and walks plus foodie quizzes and other competitions. There will even be a tent in which you can try your hand at a radio controlled ploughing competition!
So there should be something for everyone and in my view the more people who come to appreciate the importance of food and its connection with the farmers who produce it and the landscape which has been created by farming practices over the centuries, the better.
For more information about this event or to purchase a ticket for one of the lunches go to www.wellsfoodfestival.co.uk.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
In this context any event which promotes the importance of food, its connection to local producers and the community within which the food is produced and consumed must be a good thing.
Therefore it is great news that after last year’s successful inaugural event, the second Wells Food Festival is scheduled to take place on Sunday 12th October. The event aims to celebrate the best of Somerset’s local produce featuring over 50 stalls manned by artisan food producers.
But the event goes further than just celebrating food itself; education and broadening people’s horizons is also important. For instance, one of the great successes of last year was the invitation which was extended by TV chef Valentina Harris to 10 pupils from the Blue School in Wells who, having helped with the Great Somerset Lunch 2013, were invited to the Universita dei Sapori, a state-of-the-art cookery school in Perugia, Italy. In return, this year the Food Festival organisers have invited 10 students from Perugia to come to Wells to help prepare a superb Italian Sunday lunch using Somerset produce.
In addition to the Italian lunch, chef Tom Hunt will be hosting the Forgotten Feast’s Autumn Banquet where the emphasis will be on using produce that may be rejected by the picky buyers of supermarkets and other retail outlets. In so doing he will try to open everyone’s eyes to the wastefulness of some of our current practices by producing a delicious seasonal feast prepared from the abundance of Somerset’s autumn produce, much of which is forgotten, unused or otherwise going to waste.
The festival will include a whole host of other events including kids activities, a vintage tea party, food related talks and walks plus foodie quizzes and other competitions. There will even be a tent in which you can try your hand at a radio controlled ploughing competition!
So there should be something for everyone and in my view the more people who come to appreciate the importance of food and its connection with the farmers who produce it and the landscape which has been created by farming practices over the centuries, the better.
For more information about this event or to purchase a ticket for one of the lunches go to www.wellsfoodfestival.co.uk.
James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk
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