7. September 2020
Residential and rural property update - September 2020 – 1 von 4 Insights
The lockdown caused by the global COVID-19 pandemic has been a strange time for land and estate owners.
On the one hand, farming operations remained largely unchanged; with the technology at their disposal, social distancing is not tricky to maintain in the middle of several hundred acres. On the other hand, the increase in the British public's desire to escape their urban confines and explore new rural retreats has put pressure on those who own the British countryside to open their gates.
The boom in the popularity of 'staycations' since the lockdown was lifted has boosted the coffers of an industry hit hard by lower than average yields from the 2020 harvest. When the move away from subsidy payments under the Basic Payment Scheme begins to bite next year, those enterprises without a diversified income stream will invariably be hit hardest.
Before the pandemic, there were already a number of column inches dedicated to the UK's exit from the European Union and, in turn, the UK leaving the Common Agricultural Policy (CAP). This has given the UK government a unique chance to formulate a domestic agricultural policy free from the constraints of European law.
Landowners – or more accurately, people in control of a holding, which can include tenant farmers – currently receive payments under the Basic Payment Scheme (BPS) and other environmental schemes under the CAP. BPS payments are made based on the area of a holding; so, at the most basic level, the more land someone owns or controls, the greater the amount they receive under the BPS. This is perceived as an unattractive way to distribute public money and will fundamentally change under the government's new domestic agricultural policy.
The government's Environmental Land Management Scheme (ELMS) will provide a three-tiered system for direct payments to landowners, which all landowners are eligible to participate in and benefit from. This is an entirely different approach to the area-based subsidy payments which are currently in place. The government hopes this will produce a market for public goods in which landowners will receive payment based on the environmentally-beneficial actions and projects that they carry out or carry on – in effect, receiving more if they do more.
Within each tier, there are a number of different actions that a landowner could take to suit their holding and ensure that the work they undertake under the ELMS fits seamlessly and sustainably within their wider farming operations. We don't yet know the level of payments receivable for the actions under the different tiers, but pilot schemes are currently underway and further clarification should be available soon.
In terms of each tiers' focus, the policy consultation information already in circulation sets this out as follows:
Although not widely lauded in the initial consultation documents, the third tier is also the one under which rewilding projects could be conceived and enabled.
Rewilding – reducing human intervention in land and allowing it to return to its natural state – has traditionally regarded as a niche concept. Concern about climate change and the decline in the biodiversity of our native eco-systems, coupled with the success of projects such as that on the Knepp Estate in Sussex, have drawn it more into the public consciousness.
Rewilding's mainstream acceptance received a further boost in July 2020, when Environment Minister Zac Goldsmith confirmed that the government was "[placing] a lot of importance on rewilding" and wanted to see it receive a "much greater uptake". This is not to say that quality food-growing land should be taken out of production, but rewilding as a means to providing an income stream is something that could be considered, particularly in areas where farming is only sustainable due to the receipt of subsidy payments.
It's also worth noting that, contrary to popular opinion, rewilding does not necessarily involve the introduction of an apex predator such as Eurasian lynx or wolves to land. It may be possible in remote areas of Scotland or Wales one day, but broadly speaking the UK is too densely populated to eliminate the risk of human casualties from the presence of such animals, given the size of the territory they may try to establish.
Instead, a rewilding project can be complementary to existing farming operations, and a recent example of a rewilding success story can be found on the River Otter in Devon. Beavers were found to be living on the river in 2013 and, rather than having them removed, the Devon Wildlife Trust was granted a licence to allow the beavers to remain so that their impact on the local environment could be monitored.
The study found that the beavers' presence and dam building activity enhanced local wetland habitats and increased biodiversity, reduced the risk of flooding and improved water quality. Accordingly, when the licence expired in August, Defra confirmed that the beavers would be allowed to remain. The work done on the River Otter now forms a blueprint for the reintroduction of beavers in other parts of the country.
At the other end of the scale, a rewilding project could also take in the wider estate, by moving away from intensive agriculture altogether and allowing the land to be returned to pasture, and then possibly introducing once-native species or rare breed livestock which can help to naturally manage the area. In time, nature will flourish in the vacated space and attract other animals to the land.
If a Tier 3 project is carried out on an estate then – as well as the public money received for the project – there are also opportunities to increase the income generated from the land from the diversified enterprises which can stem from it, depending on the level of human intervention that is undertaken as part of the project. These are almost limitless in scope and depend whether there wants to be a focus on producing 'wild' food, entering the market for carbon sequestration or attracting day visitors, holiday makers or commercial activities and enterprises – or any combination of them!
There is no question that we still need food and the bulk of UK farmland will continue to provide us with food and food security in the uncertain post-Brexit world. However, there are opportunities available under ELMS for ambitious landowners to do something bold and exciting with their holding and leave a sustainable 'jewel in the crown' for generations to come.
If you have any questions about rewilding or the Environmental Land Management Scheme, please reach out to a member of our Residential and Rural Property group.
von Luke Callaghan
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