Galbraith Rural Matters Summer 2023

Page 14

The emerging Free Market for Biodiversity

The opportunities and risks

Farmstrong

Scotland ‘Live well to farm well’

Wellbeing programme for all Scottish farmers and crofters of any age

Galbraith

Market Update

Summer 2023

Summer update and insights on the Arable, Dairy, Beef and Sheep Markets

Cost of Living Challenge for Landlords

Changes to the Cost of Living (Tenant Protection) (Scotland) Act

Summer 2023

Welcome to Rural Matters Summer 2023 Edition

Summer is an exceptionally busy time for rural businesses and landowners, with many competing demands on our time, whether you are involved in agriculture, a tourism enterprise, conservation, forestry, or land agency.

As I write, the market for land and farms has picked up again after a slow start to the year and land values remain historically high. Despite open market transactions being relatively quiet the level of private deals has been considerable.

The reasons for selling are diverse but the changing subsidy framework in England and in Scotland is one of the pertinent factors, causing some uncertainty but also significant opportunity.

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The flurry of announcements from policy makers relating to natural capital, biodiversity net gain, sustainable farming and naturebased solutions may seem baffling but underpinning the buzz words is a basic commitment to looking after the land. This is something with which we can all agree

Land-based businesses prove time and time again how resourceful and resilient they are. I am constantly impressed by all those rural businesses managing to adapt to a rapidly changing society, embrace innovations in technology while maintaining the long-term focus on sustainable land use.

I hope you enjoy the opinions and insights shared in these pages and I wish you all a very productive season.

Ian Hope

07968 209 543

ian.hope@galbraithgroup.com

Head of our Rural Department

4 Fight or Flight

The Impact of Avian Influenza.

6

The emerging Free Market for Biodiversity.

5 Supermarkets promise a lot and deliver little for homegrown meat producers.

8 Biodiversity Net Gain offers interesting opportunity for landowners.

9

Farmstrong Scotland ‘Live well to farm well’

9 Environmental Land Management Scheme and the Landscape Recovery Scheme.

10 Biodiversity Strategy 2045 and Environmental Improvement Plan 2023.

Galbraith is a leading independent property consultancy. Drawing on a century of experience in land and property management the firm is progressive and dynamic employing over 200 people in offices throughout Scotland and the North of England. We provide a full range of property consulting services across the commercial, residential, rural and energy sectors. Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.

12 Contract Farming Agreements. What do I need to know.

Contents
| Rural Matters | Summer 2023
14 Cost of Living Challenge for Landlords. 20 A piece of the Pork Pie. 21 Scotland on Screen What’s the process. 18 Data led Dairies. 22 Telecommunication Tribunal. 32 Maximum CoverageThe Importance of Carefully Renewed Insurance Policies. 36 Powering upDemand for battery storage sites can offer good potential for landowners. 24 No BPS No problem? 26 Market UpdateSummer 2023. 38 Right Tree Right Place. 39 New restrictions on hunting with dogs in Scotland. 30 Agroforestry. 34 Private Rental Sector Crises. 16 Rise of the machines.

Fight or Flight The Impact of Avian Influenza

Avian Influenza (AI), Bird Flu, has had catastrophic effects on poultry farms up and down the country. Supermarket shelves have been left empty or stocked with foreign replacements, meanwhile, poultry farmers and egg suppliers have been left scrambling for an income.

Bird flu has been spreading throughout the country from migrating birds that come over in the summer months. It has historically been noted that the flu is killed off when temperatures rise, however last year was an exception and the flu continued to spread, infecting hundreds of thousands of birds.

It was recommended that increased biosecurity be taken by all poultry holders. As of 17th of October 2022, England, Wales and Ireland was declared an Avian Influenza Prevention Zone (AIPZ). This meant that all bird keepers had to adhere to strict biosecurity measures by keeping the birds inside to prevent the spread of avian influenza across the country. There isn’t a requirement to house birds in Scotland, however this is under constant review.

If your poultry farm has had confirmed cases of avian influenza, any surviving birds will be culled. Your holding will be placed under strict restrictions affecting movements on and off the site. Costs relating to cleaning and disinfection fall directly on the farmer.

Insurance policies for poultry farmers are practically non-existent. It is the government which is providing support for farmers affected by bird flu. A sliding scale is used to determine the compensation value, with the age of the hen taken into consideration.

Turkey production was severely impacted at the end of last year meaning that farmers were left out of pocket for that year. This is all the more significant for these farmers as they have only one crop of birds per year. Once a case of bird flu is confirmed, the whole flock has to be

culled. These farmers are at the highest risk of maximum financial pain.

Many commercial egg units have had to close their doors because of the disease. Around half a million laying hens have either died from the disease or had to be culled in Scotland. This equates to around 8% egg production loss in Scotland and 2.5% production loss UK wide. Scotland has a higher production % loss as it has less commercial layer units compared to the rest of the UK. There has been controversy surrounding food security in supermarkets and the lack of supply of eggs coming through. Supermarkets have been claiming that the increase in Avian Flu has meant that they haven’t had the quantity of eggs to meet demand, justifying their reason for outsourcing their supply from foreign producers.

However, it is understood from suppliers that the reason as t egg supply has diminished in the UK is due to historic poor returns. Retailers refused to put up pric the shops the last couple of y regardless of the ever increasing input costs that the farmers w facing. Farmers were once again squeezed prior to Avian Influenza and ultimately couldn’t oper profitable business. Many egg producers then decided the no longer buy their next bat laying birds in a bid to mak supermarkets realise they c operate any longer. As a result, ther are 7 million fewer laying hens in the UK than there were 5 years ago

In the next year, we expect continued shortages of eggs in supermarkets. In terms of Bir there has been only one case in the

last 6/7 weeks which was a low pathogenic strain. Biosecurity could not be more important, making sure there are movement records, removing clothing once out of the area of the hens, increased traceability. Responsible bodies are looking into a poultry register whereby hens from age one upwards would have to be on a register showing their location to try and target areas when the disease risk level is high. The NFU and the Government are working together to try to alleviate the immense risk to poultry farms and are considering an insurance policy for egg producers. n

| Rural Matters | Summer 2023
beth.dandie@galbraithgroup.com

Supermarkets promise a lot and deliver little for homegrown meat producers

When several large UK retailers pledged to only sell UK lamb over the summer and autumn, the news was celebrated by farmers. However, in January Aldi announced that it would no longer be stocking exclusively British lamb, reneging on the promise it had made. Aldi is following in the footsteps of Asda which in January 2022 also backed out of a commitment to stock exclusively British beef. However, with increasing cost of inputs, an overabundance of lamb on British Farms, and the news that prices for British lamb are down by 13% compared to this time last year, National Sheep Association (NSA) chief executive, Phil Stocker says now is the time to back British produce.

Whilst Aldi has assured customers that the majority of its lamb will be from British farmers, the stocking of foreign meats from countries such as New Zealand, is reportedly to provide customers with an affordable option during the ongoing cost-of-living crisis. Other reasons why retailers may choose to stock New Zealand grown lamb is due to seasonal availability, demand and quality regulations. However, AHDB has predicted that UK lamb production will be about 8-9% higher than in 2022.

Scepticism would suggest retailers are willing to forego higher quality

local products for inferior cheaper alternatives, whilst using the “out of season” excuse as a get out of jail free card, whilst at the same time increasing food miles and carbon emissions. This would not be the first time that cost has been the key driver behind sourcing stock from overseas. In 2020, Irish beef was filling the shelves in Scottish supermarkets because, during the pandemic, the Irish government was paying a COVID19 subsidy to the beef sector. This allowed Scottish retailers to buy it inexpensively, yet sell it at the market price, bolstering profit margins. Lest we not forget that during this period, the UK government had given retailers millions in business rates relief. This, coupled with the lockdowninduced demise of the hospitality sector and subsequent reliance on supermarkets, led to recordbreaking profits.

Despite Aldi’s deviation from stocking exclusively home-grown and climate-friendly lamb, retailers such as Waitrose, Morrisons and the Co-op are upholding their commitment to British farmers. This is very welcome support - long may it continue. n

This would not be the first time that cost has been the key driver behind sourcing stock from overseas...
Cameron Finnie

The emerging Free Market for Biodiversity:

Building trust in the wild west

Climate change has been discussed for a long time, and the concept of carbon markets – paying someone to deliver carbon reduction on your behalf – is becoming familiar. But as recently as 2016, I was introducing politicians to what was for most a completely new concept: ‘Biodiversity’. It resulted in the first Scottish Parliament debate on the subject.

| Rural Matters | Summer 2023

We have come a long way: I am sure no reader can be unfamiliar with global biodiversity decline, and the need to turn around terrifying declines in habitats and species from insects to seabirds. Policy is playing catch-up: you can read in these pages about English and Scottish governments’ biodiversity plans. Yet the private sector is rapidly accelerating too, as the nations of the world agree to create frameworks which drive a ‘biodiversity economy’.

We are seeing a ‘free’ biodiversity market emerge. It’s developing extremely rapidly, attracting huge amounts of speculative interest, could represent great opportunities, could also pose risks, and is certainly something every land manager will want to be aware of. But what does it involve?

presents a great opportunity to develop projects which meet their needs. Companies are looking for all kinds of scales and descriptions of projects but broadly they have three key features:

• They will have impact – they deliver genuine and credible biodiversity benefit.

• They will be robust – that benefit will not be at risk of bad headlines exposing stories that trees were not planted, or would have been planted anyway, or communities were destroyed.

• They will have a strong story – the impact of the project will not simply be a figure on a balance sheet; it will have stunning photographs, heartwarming stories, opportunities for close engagement.

‘insetting’ or ‘remote sensing’, but in fact have little depth of knowledge themselves, or have created a business model which is profitable to them without delivering the benefits promised to the buyers. This market does urgently need brokers – the project developers –so what makes Galbraith a safer option? Our approach is to be transparent. For a start, this is still an early-stage market, and if you are looking for a safe and simple option, chances are we’ll advise that it’s not the option for you. We will honestly say that there is much we don’t know – because there is much nobody knows, when the market is evolving so rapidly. What we do have is deep knowledge of land management, business, and communities in Scotland and England, and a wide network of connections to experts who can

More and more companies find themselves under commercial pressure to demonstrate green credentials. For consumer-facing brands this pressure comes from customers. For stock-market listed companies it comes from shareholders such as pension funds which increasingly have stringent Environmental and Social Governance (ESG) requirements. For suppliers, contractors and professional firms it comes from the companies they are working for looking for green credentials throughout their supply chain.

All these companies are beginning to assign budgets to projects that demonstrate they are taking biodiversity decline, as well as climate change, seriously. This

There are as many ways to build this story as there are land managers and interested companies, so this represents a huge opportunity to develop projects.

What are the risks? The huge and rapid expansion of this potential market provides an enormous opportunity for brokers to develop projects and find buyers. Few of the players in this new and rapidly evolving biodiversity market. This makes it relatively easy for brokers to appear to be experts, and to gain the trust of both ‘sellers’ and ‘buyers’ with apparently quick and easy options. They may have command of the jargon of the useful market mechanisms evolving, such as ‘biodiversity credits’, ‘Naturerelated Financial Disclosures’,

help fill the gaps in our knowledge. If you do have a vision, and want to build a project, we will build it with you from the ground up, and won’t tie you in to a mysterious ‘black box’ methodology or long-term contract which you don’t understand.

We are actively building a portfolio of potential projects and potential financial partners, so please get in touch if you are interested in hearing more. Don’t just trust us, though: ask us the difficult questions. n

Dr Eleanor Harris 07585 900 870 eleanor.harris@galbraithgroup.com
This market does urgently need brokers – the project developers – so what makes Galbraith a safer option?
Our approach is to be transparent...

Biodiversity Net Gain offers interesting opportunity for landowners

Biodiversity Net Gain (BNG), introduced in the Environment Act 2021, will be a mandatory requirement from November 2023 for all planning permissions granted in England.

It will require all planning applications to deliver at least a 10% increase in biodiversity compared with the starting position . The BNG will either be delivered by on-site or off-site biodiversity provisions or purchasing biodiversity ‘credits’. Biodiversity is measured using the Biodiversity Metric 4.0 calculator that has been published by DEFRA. Biodiversity net gain (or loss) is calculated using the difference between the pre-development and post development habitat data.

This creates an opportunity for landowners and their advisors to monetise habitat creation by providing off-site biodiversity provisions which can be sold to developers. This will be an attractive option to developers as it will allow them to maximise house building density without having to provide on-site BNG. Depending on the scale of the development it could require extensive amounts of land to deliver at least 10 percent net gain. The other advantage to developers is that once the site has been built , they do not need to continue with habitat management as it will be the responsibility of the landowner providing the offsite units to deliver the ongoing management.

For example, the landowner establishes their baseline,

creates a biodiversity habitat that works within their current farming model, then sells the biodiversity units generated from the creation of that habitat directly to developers.

The off-site biodiversity gains will need to be secured through either a conservation covenant or a planning obligation. There will be a legal requirement to manage the units for a period of at least 30 years so it is a long term commitment for landowners and any future generations.

Habitats created after 30th January 2020 will be eligible for registration and sale of units. There is no time limit on how long units can be ‘banked’ before being allocated and sold.

Natural England will also play a role in implementing BNG as it will be given responsibility for selling statutory biodiversity with the prices being reviewed every six months and prices will be set to be ‘intentionally uncompetitive with the market’. There may be tax implications associated with utilising land for selling units to the biodiversity markets and further guidance is expected from the government in due course. n

| Rural Matters | Summer 2023
kitty.campbell@galbraithgroup.com

Farmstrong Scotland ‘Live well to farm well’

Farmstrong Scotland is a wellbeing programme for all Scottish farmers and crofters of any age, any gender and any location.

Farmstrong Scotland has adopted practices from Farmstrong New Zealand which has been running for about 8 years and promises to help farmers ‘live well to farm well’. This programme focuses on the concept that both physical and mental health are crucial to ensuring the running of a successful business and if we don’t take time to focus on our wellness we will need to take time to focus on our illness.

Mark Gascoigne is a dairy farmer from New Zealand milking 480 cows and a FarmStrong ambassador and mental health campaigner. Mark has been travelling across Scotland to talk about his experience of depression and his subsequent focus on wellbeing.

He is trying to normalise mental health struggles to reduce the stigma around it, especially being such a common issue in agriculture. Throughout January and February Mark travelled Scotland on Farmstrong tours to share his story and encourage farmers to reduce the stigma surrounding mental health. This tour is just the start of an extended campaign that the newly formed Farmstrong Scotland team has in mind for the Scottish agricultural industry. This campaign will help people discover ways to improve their mindset, stay farm fit by eating

and sleeping well, and develop relationships with others. Farmstrong outlines 5 ways to wellness;

1 Connect developing new friendships and spending time with friends. Prioritising time away from work.

2 Giving your time to others, be that through supporting those having a tough time or spending quality time with family.

3 Take notice. Take time to pause and think about what you appreciate. Find the simple things that make you happy and pay attention to them, if only for a few moments.

4 Keep learning be curious on and off the farm. Learning new things is good for your brain, will keep your mind active and help you farm smarter.

5 Be active working up a sweat releases endorphins that make you feel alert and better able to cope with challenges. Make physical activity a habit, aim for at least 30 minutes of movement a day.

The hope is by providing farmers with these simple strategies they might try and implement them to improve their own situation. This campaign is running in conjunction with RSABI a charity that offers support to farmers on both wellness and financial issues. RSABI offers a free counselling service and emphasises that the quicker people reach out for help the easier it can be to prevent the problem developing.

Environmental Land Management Scheme and the Landscape Recovery Scheme

The Environmental Land Management Scheme (ELMS) has been introduced as a replacement for the Basic Payment Scheme that is being phased out in England.

ELMS will be constituted of a number of schemes such as the Sustainable Farming Incentive, Countryside Stewardship and Landscape Recovery. The purpose of the various schemes is to attract a wide range of landowners, tenants and land managers to deliver multiple environmental benefits.

The Landscape Recovery Scheme focuses on landscape scale projects using a blend of public and private funding to deliver long term environmental and climate outcomes. The second round of the scheme will accept projects that exceed 500 hectares which can encourage collaboration between various landowners to deliver a range of benefits.

In round two there is a limit of 25 projects as there will be a complex development phase that could take up to two years to complete before moving onto project implementation.

The development phase of the project will be funded by Defra to prepare for implementation and the activities involved could include feasibility studies, obtaining consents, monitoring and evaluation plans and developing a bespoke funding arrangement that includes private funding.

The expectation is that the project will continue for at least 20 years in order to deliver the desired environmental outcomes. Defra will look to safeguard the length of the project by utilising conservation covenants or creating designations. n

More details can be found at: https://www.rsabi.org.uk/ n

Biodiversity Strategy 2045 and Environmental Improvement Plan 2023

The Scottish Biodiversity Strategy to 2045, published at the same time as the COP 15 Biodiversity Conference in Montreal, sets out a framework for the Scottish Government’s response to the nature emergency.

The strategy introduces measurable statutory nature restoration targets, localised recovery action plans, and the expansion of protected areas across both land and sea. Specifically, the Biodiversity Strategy calls for nature-friendly farming, fishing and forestry but what does this mean in practice?

Scotland’s Vision for Agriculture, published in 2022 gives a better understanding of the role of farmers, landowners and crofters in addressing Scotland’s biodiversity crisis. One of

the ways in which the Vision for Agriculture seeks to raise biodiversity levels on farms is to make this a condition for at least half of all funding for farming and crofting by 2025. The paper states that the requirement for conditionality will expect recipients of support to deliver specific outcomes for biodiversity gains and low emissions.

The conditional element of subsidy payments marks a clear intention to depart from area-based payments such as the Basic Payment Scheme (BPS). This is in conjunction with the pressure from large retailers, to ensure that their suppliers, the producers, are actively reducing carbon emissions to net-zero. Whilst this could be viewed as another attempt to unfairly punish farmers, studies have found it may have the opposite effect. Research has shown that reducing emissions and increasing biodiversity often has a positive effect on profit, even if production lowers slightly. This is due to the soaring price of inputs and business inefficiency, the latter of which is tied closely to carbon emissions.

Whilst there are scant details on the future of Scotland’s farm support payments, with only a roadmap promising the launch of an “enhanced payment structure” in 2026, the existing Agri-Environmental Climate Scheme (AECS) is promising an additional £14 million to promote organic farming in its latest round of funding. This will support farmers as they increase biodiversity on their land, meeting one of the goals of Scotland’s biodiversity strategy which states that the Government will support farmers and crofters to meet our food needs sustainably and to farm and croft with nature.

The Scottish Biodiversity Strategy 2045 represents a broad brushstroke, but gets Scotland moving in the correct direction if it is to meet its commitments to protect 30% of its land for nature. There are several outcomes listed in the strategy, some of which include natural capital being fully embedded in policy, additional funding for nature-based solutions and unlocking private green investment. If public funding can be geared to complement private

| Rural Matters | Summer 2023

financing, then landowners will be in an extremely advantageous position during Scotland’s transition to carbon neutrality and improved biodiversity.

Environmental Improvement Plan 2023

The Environmental Improvement Plan 2023, a revision of the 25 Year Environment Plan sets out actions that aim to accomplish ten goals. One of the goals is to improve biodiversity, but what opportunities and constraints does this offer to English farmers? The Sustainable Farming Incentive has been mired with issues since its conception, with a rush to push the scheme into operation without the detailed information required by rural businesses to adequately assess the viability of the scheme. This appears to now be largely resolved with six new standards being added in January as well as, to the relief of many, the continuation, enhancement and integration of Countryside Stewardship. The new farming schemes are expected to support 65-80% of landowners and farmers to adopt nature-friendly farming on at least 10-15% of their land by 2030

Looking forward to the future, farmers and landowners can expect further support if they are willing to take an active role in addressing Britain’s biodiversity crisis. One significant outcome of the plan is to raise at least £500 million a year in private finance to

support nature’s recovery in England by 2027. The shift from public to private finance will take some time, particularly as relevant frameworks become established. The funding gap has already been felt by many through the reduction in Basic Payment Scheme subsidy payments. However, the shift away from prescriptive areabased subsidies can be viewed as an opportunity which offers more bespoke opportunities to improve environmental outcomes. The 2023 green finance strategy expects to see investment channelled into nature-based solutions for carbon sequestration, flood risk management and water quality. This investment has already begun for biodiversity and nutrient impacts in the form of Biodiversity Net Gain.

Farming subsidies have rapidly evolved since the UK’s departure from the European Union, and with the change has come the test of resilience. For rural businesses to thrive, they must take advantage of the reasonable opportunities that apply to them. Galbraith, with its large client base and breadth of cross-sector experience, is well placed to advise rural businesses, so that owners and managers get the most out of their property. n

Philippa Orr 07917 220 779 philippa.orr@galbraithgroup.com

James Lighton 07342 093 469 james.lighton@galbraithgroup.com

...Meeting one of the goals of Scotland’s biodiversity strategy which states that the Government will support farmers and crofters to meet our food needs sustainably and to farm and croft with nature...
Philippa Orr & James Lighton

Contract Farming Agreements

With the next farming year nearly in sight, many farmers will already have turned their thoughts to cropping plans and securing seed and fertiliser ready for growing crops for harvest 2024. Whilst thinking about next year, now might be the time to think about how your farm business operates and is structured.

There are many and often personal reasons, around why a farmer or landowner might want or need to give up “practical" farming. However, in most situations there are ways to ensure that giving up the practical day to day activities of farming should not preclude you from still being involved in the strategic elements of farming your land and benefiting from the tax advantages that can bring about. A contract farming agreement is one such method.

Contract Farming

In basic terms the farmer instructs a contractor to undertake the practical operations and some or all management of a crop or other enterprise in line with the farmer’s stated policies and for the farmer’s business. Their roles and operations are defined by the contract between the farmer and the contractor. The crop or other produce belongs to the farmer, while the contractor provides labour, machinery and any other

services specified on an agreed basis for remuneration.

Governed only by the law of contract farming with contractors, it is a very flexible model that could be for as little as a single operation or as much as the complete enterprise or farm management.

The instructing farmer is and remains the responsible person with financial risk from the outcome of farming and so is liable for compliance and record keeping.

The contractor is a supplier of • services to the farmer. Notewithout that relationship it could be found to be a tenancy, a partnership or employment.

The contractor’s role is defined by • the contract and he or she has access to the land by the farmer’s permission (licence).

A good working relationship and • liaison between the two parties is essential to make this work aided by prior agreement including expectations and responsibilities from issues such as mud on the road to the supply of inputs. Many remuneration arrangements • for whole enterprise contracts have separate accounts kept with a division of the profit or loss between the parties.

At enterprise level it is better • suited for combinable cropping or production of progeny or milk from livestock and where the identity of the producer matters. Note - as a business relationship, both should be able to profit from it with the contractor being practical in pricing and the farmer realistic about what is sustainable for the contractor.

Tax benefits

The two businesses remain separate and independent with each recording the income and costs to calculate their taxable profit as appropriate.

The farmer, by continuing a • farming business with risk and responsibility for positive husbandry of his land (and where relevant livestock) can continue to qualify for farming and business status for tax purposes. The instructing farmer retains risk and responsibility for the business. Note - attempts to avoid that can prejudice the status of the business for tax and other purposes.

Benefits of a CFA for the farmer

To have the benefit of the contractor’s labour, machinery, skill and commercial approach while minimising their own investment in labour and machinery Many farmers prefer having a • contractor to re-investing in expensive or specialised machinery and having a good relationship on a sustainably priced basis can offer long-term value.

The contractor can manage one • enterprise e.g. combinable crops or an aspect of an enterprise while the farmer manages another.

To remain as a farmer with all the • risk and involvement in the farming business which brings about the aforementioned tax benefits. If that is not acceptable, a different arrangement is needed e.g. renting land out.

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What do I need to know?

Benefits of this model for the contractor

It is a commercial way to focus on farming professionally whether primarily a farmer or a contractor without carrying the cost of the land in question.

It can provide a large volume of • work and income to help carry the cost of machinery and labour provided the contractor prices this on a sustainable basis aware of the risk as well as potential rewards.

A contractor can have several • agreements with different farmers at the same time and whilst being the farmer on the contractor’s own land.

A contract done well will help win • others.

Remuneration

Within a CFA, remuneration for both parties is generally dealt with on a profit share agreement based on output.

Both parties would receive a prior • or first charge. The contractor’s sum will often be based on a slightly below market value figure for the work to be carried out. This figure is then usually replicated and becomes the farmer’s first charge.

This method ensures that both • parties receive a basic return but in order to achieve a higher return, they must strive to work together to maximise yield through good management, husbandry and marketing.

This margin (over and above the • basic return) is called the divisible surplus. It can be split equally or by a differing percentage (which has been pre agreed at the start of the agreement) and is paid out once all sales from a given farming year have been taken into account.

Good CFA housekeeping

In order for a farmer to qualify for favoured rates of IHT, CGT, FBR, BPR they must be seen as an actively trading farmer by HMRC. To this end, there are a number of criteria that HMRC would look for to ratify that a farmer is still trading under a CFA:

Whilst a good contractor may be • capable of carrying out not only the practical work but most of the day to day and strategic management within the agreement, the farmer must be involved in the decision making processes including; cropping planning and the purchase of inputs and sales of produce.

At least two formal meetings

• must take place each year at the farmer’s home with a set agenda covering these points. Subsequent minutes of the meeting should be kept on file and be circulated to all parties afterwards.

Purchase of inputs and sales of

• produce must be transactioned through the farmer’s bank account. In a CFA, a second farm bank account, known as the number two or contracting account should be set up. This is separate to that of the farmers own account.

Where at all possible inputs

• should be purchased in the farmers name and invoiced to the number two account. Where a contractor purchases inputs on the farmer’s behalf, these should be re invoiced to the number two account.

Produce sales should also be • made in the name of the farmer with corresponding accounts set up at merchants. A contractor may buy produce from the farmer (crops in store for example) but only at market value and with a clearly defined paper trail. Purchase standing crops is not encouraged but may be acceptable under certain circumstances.

VAT charged, paid and reclaimed • relating to CFA should come from and be paid back into the number two or contracting account.

A flexible approach to farming

A well set up CFA is a practical mechanism which allows a farmer to continue to trade, retain management control of his land and be tax efficient. It negates the worry of reinvestment in infrastructure, machinery and labour and allows flexibility in both the day to day and strategic planning of a farming business. n

07587
david.hurst@galbraithgroup.com
572 006

Cost of Living Challenge for Landlords

Restrictions on landlord’s ability to review rent and enforce evictions have been extended beyond the 31st March 2023 deadline.

Whilst the eviction ban remains firmly in place, there are some changes to the Cost of Living (Tenant Protection) (Scotland) Act. From the 1st April 2023, the rent cap increased from 0% to 3%. This change is applicable to all Private Residential Tenancies, and Assured and Short Assured Tenancies, except where an assured tenancy lease clause dictates how the rent is to be reviewed, for example by specifically referencing Retail Price Index, or otherwise. In these circumstances the lease would take precedence. The rent can also only be reviewed when out-with the contractual term.

Other exceptions include new tenancies, regulated tenancies, agricultural tenancies and commercial tenancies.

There is a further exception to the 3% cap where the landlord is facing extreme financial hardship, and may apply to the rent officer for up to a 6% increase or 50% of the increased costs they are facing. It is not clear how long this

process would take, or the likely success of such an application, or whether the additional time and professional fees associated with the claim would outweigh the maximum 6% increase in rent.

These restrictions are against a backdrop of soaring inflation, the RPI increase in the last year was 13.8%, and costs across every sector have increased, including compliance, insurance, repairs, and any associated professional fees attached to residential letting.

Basic property maintenance and repair costs have risen by between 15% and 30% over the last year, a boiler alone can cost between £4,000 and £8,000 to replace, including labour, all of which the additional 6% will certainly not cover.

In effect, this will mean that Landlords, beyond fulfilling basic compliance requirements, are unlikely to carry out any improvements to properties, not least the energy efficient improvements required to properties to meet the minimum

| Rural Matters | Summer 2023
Residential
Legislative Update
Ailsa
07917 464 262 ailsa.baird@galbraithgroup.com

standards by 2025, thereby reducing the standard of the already dwindling existing rental property stock.

The Scottish Government, in recognising the need for landlords to invest in “essential services such as home improvements and maintenance” have lifted the rent controls in relation to social housing, but have not extended this to the private residential sector.

These restrictions remain in place until the 30th September 2023, at which point they may be extended for a further 6 month period, and whilst a petition seeking judicial review of the legislation has been submitted to the Court of Session by the Scottish Association of Landlords, Propertymark and Scottish Land and Estates, the upcoming introduction of the new Housing Bill is likely to replicate a similar legislative position. In the meantime, the use of holiday lets, despite the time and expense associated with the new short term licensing scheme, becomes an increasingly attractive prospect. n

These restrictions are against a backdrop of soaring inflation, the RPI increase in the last year was 13.8%, and costs across every sector have increased...

Rise of the Machines

During the pandemic, the on-farm vending machine market soared, with many consumers choosing to shop locally.

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However, since restrictions have been relaxed demand for locally produced goods available at the vending machines has remained high.

Word of mouth and the power of social media has been effective advertising for these businesses, especially among younger consumers. This growing demand for low mileage products is reflected in the increased numberof both milk and produce vending machines across the UK and Europe.

Purchasing from farm vending machines appeals to consumers on a number of fronts, including the “feel good” factor of supporting local producers and family businesses. The experience aspect of farm vending machines has also proven to be a draw, especially if the consumer has heard about it through social media coverage and wants to share the experience with their followers. The products sold tend to have an element of storytelling to them, providing a background to the items sold and the business behind the vending machine.

Some vending machine locations have taken this a step further by allowing consumers to take a tour of the calf sheds, watch the milking or see the lambs. They may also showcase a storyline of how the product has been produced and customers can get a better idea of where their food has come from. This might be a big appeal

for parents trying to educate children on how food is produced. By having a farm vending machine more of a connection may be formed with local communities and used subsequently to create some positive PRespecially for dairy businesses, which have been under scrutiny in recent years.

The farmers that have invested in these vending machines are generally able to receive a higher price for their product as they are selling direct to the consumer and customers are usually willing to pay a higher price for a product they regard as better quality. However, set-up costs and initial investment can be significant, along with ongoing maintenance costs. Location has also proven crucial for these businesses to be successful, for example the ideal location is on the edge of an affluent village or town with ample parking. Ensuring the accessibility of the location of the vending machine is very important to ensure footfall is high, which could prove to be limiting to some farms. The current cost of living crisis may undermine the appeal of on-farm vending machines as their products are generally more expensive than in the supermarkets.

Welcoming the public onto the farm raises the question of health and safety risks. It is crucial that farmers ensure they have suitable insurance cover for any new venture. Off-farm milk vending machines are also an

option for those not wishing to deal with the public or who are limited by their location, for example having a milk vending machine in a local shop. This does however reduce the ‘experience factor’ that many consumers value. Members of the farmer co-operative

First Milk can enter the vending machine market in a different route to sell cheese and milk under its new ‘Golden Hooves’ brand. This brand is heavily focussing on regenerative farming methods and only works with producers who adhere to these principles. The sites will also have a produce vending machine planning to sell locally sourced jams, honey, cream and butter from businesses all following regenerative practices. These will be operated as a franchise agreement where the farm will pay a franchise fee and a small percentage of the profits from sales while First Milk will provide the branded vending machines as well as marketing, business and administrative support.

We will watch with interest as this route to market develops and matures. n

Christina
01292 268 181 christina.smith@galbraithgroup.com
The farmers that have invested in these vending machines are generally able to receive a higher price for their product...

DATA-LED DAIRIES

milked). Most of the latest robotic milking machines are measuring a wide range of cow data including yield, constituent values of the milk and cell counts. The machine provides this data for each quarter of the cow’s udder to allow for any specific treatments or care to be given, also allowing for more precision farming to take place. All of the data from the robot can be analysed for management purposes in order to ensure cow health is as high as possible. The robots can also measure the weight

struggle to get staff to cover these shifts.

Many farmers are making the change in order to improve time efficiency as instead of allocating a large proportion of their day to milking the cows they can use this time to manage the cows more effectively. This is further helped by the technology on the robot as if a cow is not producing what has been expected the system will automatically alert the operator. Farmers who have

| Rural Matters | Summer 2023
a significant cost due to wage price inflation.

The pros and cons of robotic milking

generally seen an increase in milk yield likely due to the free access of the robot as the cow can be milked numerous times a day, with no cows standing in a holding area for any length of time. Not having cows standing in a holding area for a prolonged period of time can also help vent lameness which is one of the most important issues to address in order to have a productive dairy herd. The cows have an increased resting time and often increased fertility which is likely due to less stress from being moved. However, the consideration of initial investment costs and a decision to invest a substantial amount of money will need to be carefully contemplated by businesses. This is further highlighted by the increased cost of borrowing due to interest rates

also be very power- hungry especially with compressors having to run for prolonged time periods and with the cost of electricity at such a high level this may reduce the farm’s margins significantly. Many businesses that have chosen to make the change and invest in the new robotic milking technology have also invested in other automatic technology such as a silage pusher to ensure the herd have easy access to fresh ration all day and a slurry collector to keep the cows as clean as possible to improve hygiene levels. These technologies complement the robots and significantly reduce the need for staff completing these mundane farm tasks. However the maintenance costs and repair costs (especially if there is a breakdown and a specialised engineer needs to come

and associated machinery will likely outweigh the reduction in staff wages. There is a trend for high yielding and larger herds to be housed all year round rather than getting to graze during the summer months which is not favouring the regenerative farming practices that some milk buyers are encouraging, and with robotic systems (although they can be run on a grazing system) generally it is easier to manage if the cows are housed 365 days a year n

APiece

of the Pork Pie

However, having guaranteed prices for pigs leaving your holding or price per pigs kept per week can prove a successful business model for any farmer. Keeping pigs on your farm on a bed and breakfast basis can provide an additional source of income for farmers wishing to diversify and utilise existing sheds. The contracts can see newly weaned piglets (7.5kg) or weaners (30kg) kept right up until they have reached fat weight of 110kg.

Pigs can be kept in vacant sheds, where straw bedding is used and dry feed is given. Alternatively, purpose built slatted accommodation can be invested in and allow for liquid feeding. The expenditure to bring these sheds up to standard falls in the hands of the farmer. Return on investment for adapting the vacant sheds is usually recoupable within the first year of operations.

The design of the sheds and courts is very important. They need to be well ventilated to ensure good air quality and temperature control. It is essential there is a good water supply as finishing pigs can drink up to 6 litres per day. Ensuring that daily jobs such as feeding and bedding can be carried out efficiently without causing stress on the pigs is vital. Furthermore, making sure that pigs can be loaded in a safe and efficient manner is vital as upset and stress on them can lead to issues such as tail biting.

Attention to detail in the stockmanship role is key as often behaviours like tail biting and bullying within the pens can arise with little warning. Pigs must be separated when this happens and usually the pig in question can’t be returned to the pen as it will be targeted again. Having a separate pen where these pigs can be kept may prove advantageous.

Bed and breakfasting pigs brings several benefits to a farm. If the pigs are kept in straw beds, this can be used later down the line as dung for the fields, adding organic matter to the soil and providing a cost efficient fertiliser. Fattening pigs also isn’t a land dependent enterprise therefore this grazing can be kept for cattle and sheep. Moreover, the cash intake isn’t seasonal. Pigs can be fattened at any time throughout the year. The only drawback would be if the sheds are required for the likes of lambing or grain storage, during in the year. n

beth.dandie@galbraithgroup.com

Beth Dandie
01224 860710
| Rural Matters | Summer 2023
Finishing pigs in the UK is renowned as a sector with high costs of production, market instability and high overall risk

Scotland on Screen What’s the process

?

Scotland is host to some of the most dramatic and beautiful countryside in the world, which is why Scotland features so often in award-winning films and TV shows.

With the right advice and expertise landowners up and down the country can 1. Benefit from free advertisement and 2. Get the best deal when film crews come knocking at the door. From Harry Potter, 007, The Crown and The Traitors, Scotland clearly has a lot to offer.

The opportunity comes with benefits such as free advertisement or the opportunity to diversify and generate extra revenue. Owners can also benefit from further income streams through commercial adverts, photo shoots for products or product launches on the back of a film or TV production.

There are a few steps in the process when seeking a dramatic backdrop for the latest Bond film or the next Outlander series. Scouts or freelance agents will approach the landowner, they will ask to scout out the location then report back their findings to the director. Once the appropriate location is discovered, negotiations can begin. This is where the landowner can outline in detail their terms, fees, access and dates can be discussed and confirmed. Extras can be added to the contract such as if the estate or filming location has holiday cottages that are in hand, these could be let to the film crew as accommodation for example and could be charged at a higher rate for exclusive use.

Depending on the budget of the film landowners can secure reasonable fees, Major, corporations such as NETFLIX or Hollywood producers are willing to pay handsomely to film the perfect scene, therefore it is in the landowner’s interest to get the best deal This is where experienced agents can assist. The one caveat to bear in mind is that smaller TV production companies do not have the same budget and sometimes the effort and time spent dealing with these organisations isn’t always worth it.

Landowners can charge more depending on the backdrop of the scene i.e. if the film crew wants to film in front of a dramatic castle, the owner can charge more for that shot compared to a shot which is in front of a woodland. The reason for this is that castles and other specific backdrops may contain sensitive information or details that can give away a film set location. This can attract unwanted public attention. Payment is typically dependent on the price per day rather than a lump sum.

Strike days are the take down days where all equipment, props, cameras and sets are taken down and removed. These can be efficient and smooth operations if planned well in advance but if not they can be timely and can be costly if things are damaged in the process.

In some circumstances staff from the estate or locations who will be employed and involved with the filming have to sign a confidentiality agreement. This is a legal document that requires the parties not to share or profit from any classified information. This gives some security to film crews to know that the staff involved won’t sell or provide sensitive information about the potential plot or production.

There are of course several disadvantages to your land being used as a film location. For one, the public can sometimes work out exactly where the location is and may therefore turn up unannounced. This can cause conflicts in the area between farmers, landowners and the general public. Due to the Land Reform Act 2003 the public have a right to roam, this can again cause conflicts with landowners bringing a halt to dayto-day farming.

Galbraith has been involved in a range of film sets due to the vast areas of land we manage. We can therefore provide professional help, expertise in negotiation skills and advice to landowners, in order to capitalise on these opportunities. n

Telecommunication Tribunal

Recent legal rulings on rental levels are sure to affect negotiations between landowners and telecom companies looking to locate phone masts on their property.

The Upper Tribunal (Lands Chamber) in England has settled on a process for determining Electronic Communications Code (Code) rental valuations. Three recent decisions issued by the Upper Tribunal concerned disputes involving rental values for telecommunication sites under the 2017 Code. The relevant cases are:

EE Limited and Hutchison 3G UK

• Limited v Affinity Water Limited (Affinity Water case)

On Tower UK Limited v AP Wireless • (UK) Limited (The Audley House case)

EE Limited and Hutchison 3G UK

• Limited v David Paul Stephenson and AP Wireless II (UK) Limited (The Pendown Farm case)

The Upper Tribunal in England and the Scottish Lands Tribunal in Scotland have the power to set Code agreements including determining disputed clauses and the appropriate rental levels.

Paragraph 24 of the Code confirms the amount of the consideration (rent) payable by an operator under an agreement imposed by the Tribunal “must be the amount or the amounts representing the market value of the relevant person’s agreement to confer or be bound by the code right (as the case may be)”.

Historically this has led to comparable evidence being placed before the Tribunal in order to assess the appropriate rental level. However, these recent cases have shifted the emphasis away from the comparable method of valuation to a new, more complex, three-stage valuation assessment, as used in the On Tower v Green (Dale Park) case.

Stage (1) is to assess the underlying value of the land and then (2) add the value of the additional benefits granted to the tenant, then (3) value the additional burden on the landowner for the grant of the Code agreement. The recent cases have produced a table of proposed Code rents under Paragraph 24 as follows:

The setting of rent levels for phone masts and related equipment has been influenced by case law. Mike Reid reports
| Rural Matters | Summer 2023 The Decision Type of Property Annual Rent CTIL v Fotheringham Rural, no housing £600 (£1,500 in year of installation) Pendown Farm Rural, no housing £750 On Tower v Green (Dale Park) Rural, adjacent to housing £1,200 On Tower v AP Wireless (Port Talbot and Huntington) Industrial area/storage yard £2,020 / £2,100 Affinity Water Suburban residential water tower £3,000 CTIL V Marks & Spencer city department stores/offices £3,850 CTIL v London and Quadrant City residential rooftop £5,000

Telecommunication rents have traditionally been based on a market rental value using the comparable method of valuation so it is unusual to depart from this method of assessment other than for stage one of the three-stage process. The mobile operators are regularly quoting the table of rents when applying for new Code agreements or lease renewals as it is beneficial for them to agree rents at these levels, often implying that there is no option but to agree to their proposed terms.

Rents are still being agreed generally above these levels and when reviewing any rental decisions, the effect of inflation since that date also needs to be taken into account.

Whereas the rental level is an important consideration for any telecoms agreement, there are many other terms of the agreement that are equally important for protecting a landowner’s future rights. For example, we often find that there are no rent review provisions offered leaving the landowner having the value of their rent eroded by inflation each year and at the end of the term potentially only having the option of a costly Tribunal process in order to update the rent to an appropriate level.

It is important to seek specialist advice ahead of telecommunication negotiations in order to protect rights and futureproof agreements.

All the landowner’s reasonable fees, without cap, should be paid by the operators for progressing a Code agreement as the Code should be costneutral to landowners.

Rents are still being agreed generally above these levels and when reviewing any rental decisions, the effect of inflation since that date also needs to be taken into account.
Mike Reid

NO BPS NO PROBLEM?

Thinking creatively to prepare for the future

are facing some of the biggest changes in a generation. The exit from the EU prompting the end to “area based” subsidy payments, coupled with a global pandemic, a war in Ukraine and the subsequent inflation of commodity prices has presented a series of challenging issues in the last few years.

challenges are out of our hands and look here to stay. But although as an industry, we may struggle with the volume of these changes there are going to be lots of opportunities and there is no reason why a farming business from any sector cannot remain profitable and look to the future.

If we take the gradual reduction in area payments, this is likely to have the largest immediate impact on arable and stock farmers. However, the war in Ukraine has helped bolster food prices both at home and abroad and generally farm gate revenue has increased. This is of course balanced out to some degree by higher input prices such as the cost of fertiliser

prices for livestock, dairy and poultry also having increased exponentially. But whilst we are unlikely to ever see a return to an area based payments system, the pot of money that this once came from is slowly being distributed through both revenue and capital grant schemes. The number of these schemes seems to be ever increasing and they offer varying levels of payments to particular target areas; productivity and innovation, fencing, hedging, traditional stewardship, water quality, air quality, the list is expansive.

By 2024 BPS payments will have been cut in half compared with 2021 and most farmers will have noticed their 2022 payment will have reduced by 20 – 40%. So with this in mind, now is the time to sit down and look at the grants available and see what is applicable for your business. There is something for everyone but you must be open minded and creative in your thinking to make the most of them.

The grants and schemes will help a lot of businesses but they are only one part of navigating this brave new world with no direct subsidy. Knowing the intricacies and nuances of your business is key to its resilience and ultimately its survival. Carrying out regular budgeting and cash flow planning has always been important but, never more so than

24 | Rural Matters | Summer 2023

with strained cash flow and increased variable and fixed costs. Businesses should be reviewing their purchasing plans and ability to fund not only day to day operations but also future investment projects. Build on working relationships with suppliers and banks to help manage these situations and don’t be afraid to change if you think you are not being offered a good deal or a relationship has become stale. It would also be advisable to look at drawing up a 5 and 10 year business plan and have a conversation if applicable about succession. Now more than ever, it will be important for everyone involved in a business to know the direction of travel, the goals set out along the way and how they might be achieved.

If the conclusion from these conversations about the future are startling, can a solution be sought? Is now the time to look at entering into a joint venture with a neighbour, a contract farming agreement or machinery sharing arrangement?

These are challenging times for farmers throughout the UK but England is one step ahead of the devolved nations with the grants and schemes now available and although Defra’s vision may appear hazy sometimes, we do have some hard facts in front of us. The environment is becoming a bigger piece in how we operate and this is only set to increase Fighting these changes is futile and probably damaging to any agricultural business, so embrace a new way of thinking and see opportunity where you once may have seen despair.

Against the backdrop of changes in England, the Scottish Government conducted their agriculture bill consultation in late 2022. This gave some indications of the expected direction of travel but scale and substance of future government support remains unknown.

In light of this uncertainty, farmers north of the border can focus on business efficiency and resilience and adaptability to prepare for future change.

The basic payment scheme is being phased out by 2024 and the replacement scheme is undecided. What can farmers and land managers do over the next two years to bolster their business and increased resilience?

A business review can be a good place to start when considering resilience, the health of a business over the past three to five years and the level of support from subsidy can help to demonstrate how the business will perform going forward. This forms the basis of determining a strong business plan which is able to adapt effectively to a changing policy landscape.

Many farming businesses are supported by subsidies especially on more marginal land. Reducing this reliance is critical to business sustainability and can be achieved through efficiency. Efficiencies, reducing the reliance on unstable input prices, going back to basics, curtailing unnecessary spending, and taking into account rising prices when budgeting can all help to improve the overall business position. This way of thinking is not new, but sometimes forgotten in an overly complex world of carbon credits, decoupling and offsets.

Carbon and financial efficiencies often go hand in hand with the same products being produced for less carbon input, more quickly or with lower intensity and fewer inputs. This demonstrates the importance of a creative approach to business planning, something Galbraith is able to assist with by offering whole business reviews and advice on grant funding applications and drafting farm business plans. n

25
David Hurst 07587 572 006 david.hurst@galbraithgroup.com Georgina Weston 07909 978 645 georgina.weston@galbraithgroup.com

Market Update Summer 2023

Wheat

Since the last Rural Matterspublished in the autumn - the Futures prices for London Wheat dropped from circa £290/t to £220/t. This drop was a result of a variety of factors, but there are now glimmers of hope as the market starts to slowly recover. Recently, factors such as poor crop conditions in the United States, and rising tensions surrounding the Black Sea grain deal for Ukraine, have resulted in a £20/t recovery in feed wheat prices (£239/t on 14th Feb). In addition, the domestic demand in the UK remains

The barley prices from the 2022 crop harvest were much higher than in 2021, which proven to have knock-on effects for 2023. It is predicted that full-season exports are expected to be 1.000Mt, up 31% from 2021/22. Domestic barley availability has increased due to a larger crop year on year. From July to November 2022, UK barley exports totaled 474Kt, a 24% increase over the previous year. However, as the season draws to a close, the export pace is expected to slow slightly as supply runs out.

Oil Seed Rape (OSR)

The May 2023 Paris rapeseed futures closed at their lowest price since

December 2021. The downward pressure on rapeseed futures has also been seen in UK delivered prices, which have now been trading below the £500/t mark for the past month or so. Over the last few months, some of the pressures driving down the price include: the continuation of the Black Sea corridor, as well as the German environment minister's proposal to phase out crop-based biofuel production by 2030

Maize

The maize markets have been driven higher as a result of weather concerns in South America. Chicago maize futures have been climbing, regaining strength last seen in November. As the South American drought continues, global maize markets are likely to continue to react, filtering down to domestic values.

Oats

The oat market remains isolated from the larger grain markets, but all eyes are on the grain corridor in the Black Sea. Although isolated, the European oat market continues to be hard going. Currently, Scandinavian oats seem to be leading the way. In terms of UK oats: Milling oats are trading but activity is light with farmers not keen to engage in the market; the markets for feed oats remain limited and growers should consider selling to avoid missing the opportunity to empty stores.

Dairy Update

-

According to the most recent AHDB data, milk production in the UK increased by 2.7% in January and

| Rural Matters | Summer 2023
Arable Update
Harry Gaisford 01738 451 111 harry.gaisford@galbraithgroup.com

Dairy Update

remained around the same through February. The market is continuing to decrease as a result of persistently strong milk volumes. The demand is being impacted by the squeeze on consumer spending which is anticipated to have an impact on domestic demand, especially with fewer sales of more expensive luxury dairy products. Defra reported that the average milk price in the UK for January 2023 was 49.20ppl, a decrease of 2.4ppl (4.7%) from the previous month. It is important to note

that this price is based on a standard litre but in reality, many producers do not hit the standard litre requirements and therefore receive less than this average price. The standard litre generally has to have constituent values of 4.2% butterfat, 3.4% protein and produce milk volumes over 1 million per annum. A premium can also be gained from bactoscan and somatic cell count levels and missing these targets can result in significant ppl penalties. Milk

buyers are also driving the producers to use more sustainable and regenerative practices which is being incentivised in a small increase in the ppl received.

The first quarter of 2023 has seen reductions ranging between 1.2ppl and 6.45ppl and some buyers have already announced additional price reductions for April. (AHDB 2023) The unexpected increase in farm input costs and the potential of milk shortages caused milk prices to climb through 2022 at an exponential rate. So far this year the majority of feed, fuel and fertiliser costs have reduced in price in comparison to 2022 where we saw unsustainable, record high prices for these inputs resulting in more pressure on the producer despite receiving an increased ppl for their milk. The prices of cull cows have been exceptionally high partly due to a contraction in the national beef herds across the UK and subsequently this may be influencing producers to either cut back on their dairy herd or sell older less efficient cows and bring in younger heifers to the herd. If the milk price continues to reduce this may be exaggerated further. Although the bigger units can benefit from economies of scale, availability of skilled labour continues to pose a challenge with no prospect of this being rectified in the short term, this is possibly encouraging producers to invest in robotic milking systems to allow for a decreased staffing level. Milk producers are now also facing pressures with legislation for example the 22week slurry storage requirements which will require significant investment for some businesses in order to ensure they are compliant. In general, the dairy industry as a whole is capital intensive and therefore is often a heavily borrowed sector. Many producers took advantage of receiving a higher milk price last year and have put in a substantial amount of investment into a range of new technologies, purpose built sheds and machinery to improve both performance and efficiency and these investments were made easier with historically low interest rates that encouraged expansion, however with interest rates rising resulting in an increased cost of borrowing this may impact on the profitability of these business and might delay further expansion.

Beef Update

It’s been a significantly strong start to 2023 for the UK beef price. In the week ending 4/3/23 deadweight heifers achieved 490.9 p/kg and steers following on at 489.0 p/kg. This is up by 76.6 p/kg and 80.5 p/kg from the same week a year ago respectively, a near 20% increase.

Cull cows are also experiencing record prices in the live ring. The high prices have allowed many beef farmers to ‘cash-in’ to get out of the uncertain beef industry at a time where the future of subsidy is also

unknown. While cashing in on the least productive older cows will have increased efficiency in the farmer’s herd, where numbers have decreased significantly the supply of the next generation of cattle is in question. The lack of numbers of beef cattle has created a shortage throughout the UK which is creating the higher prices for beef.

High finished cattle prices in turn leads to increased demand for store cattle. In Scotland this is also being driven by English finishers. They are looking for bigger, heavier bodied animals which they will pay a premium on. It is in question whether Scottish abattoirs will remove the weight limit in order to maintain the supply. A short term supply of future beef is predicted to come in from the dairy herds when the price of milk is anticipated to drop

Optimism is felt amongst the industry with the recent drop in fertiliser and grain prices, however many producers may have bought last year where prices were up and it wasn’t clear whether these were set to continue. High finished prices are required by finishers and will be should the price of feed, fertiliser and fuel rise again with inflation.

At the recent February Galbraith Bull Sales held at United Auctions, Stirling, a strong trade was achieved across all breeds. It’s not a surprise after the demand for larger bodied animals that the Charolais breed topped the sales with a Harestone bull selling for 30,000gns and a clearance of 84%. A new breed record average was also made by the Simmentals of £7,260 where 97 bulls found new homes, up 8 bulls on the year.

Sheep Update

In previous years the lamb trade reaching over £2/kg Liveweight would have been cause for celebration but this year it has felt mediocre after the extreme increase in cost of production.

The 2022 lamb trade started on the back of the dizzy heights of £3/kg+ set by the hogg trade in July. This autumn was a good time to cash lambs - with lambs reared straight off grass achieving £2.30/kg in September through October. As can often be seen prior to Christmas, there was a small lift to £2.40/kg as processors stocked up for the festive

| Rural Matters | Summer 2023
Sheep Update
Beef Update Beth Dandie 01224 860710 beth.dandie@galbraithgroup.com

season. The trade backed off to what feels like the now normal price of £2.00-£2.20/kg in January to March.

Lamb producers were left nervous in March 2023 with the well-known pre-Easter boost slow to materialise. The price of lamb feed increased by approximately 50% on the year, but finishers did not see the commodity price increase anywhere near in line with this level. This is partly due to the price of feed resulting in producers shy to offer expensive feed, slowing down the time to finish and pushing the supply of lamb later into the season. As a result, we are seeing less competitive prices being paid in early 2023 due to a greater supply of old season lamb at the time that producers would expect it to be in greatest demand. The cost of production has never been higher with the process of growing grass (seed, fertiliser and contractors) increased greatly. This has affected the grass-let market, with higher prices paid particularly for winter grazing where we see hill farmers being prepared to ship their ewes further to find grass in an attempt to keep them in good condition while avoiding feed supplement.

Forage crops have shown their importance this year. Neeps, forage rape and kale have been a very cost effective method of growing lambs and reducing the feed required to finish. While fencing is still an issue, many arable farmers are understanding the importance of adding forage crops into the rotation for soil health making it mutually beneficial and hopefully something that will see support in the future.

While the 2022-23 season has been satisfactory but challenging to lamb producers, it has driven innovation and efficiency. It has forced producers to utilise their grass more effectively, highlighting the importance of rotational grazing, quality forage production and keeping grass young. With margins slimmed the 2023 lamb crop will need to be from a healthy flock with effective vaccination programmes and lameness control that utilises grass and minimises feed in order to be operating profitably. n

Lamb producers were left nervous in March 2023 with the well-known pre-Easter boost slow to materialise...
ian.armstrong@galbraithgroup.com

One of the key characteristics of land is that it is finite. From the land that we have we need to produce all our food, energy and materials. We should look to create carbon neutral production systems and produce commodities in a way that prevents further declines in biodiversity.

Is it possible to achieve all three on one tract of land? One answer could be agroforestry. Agroforestry is an integrated approach that combines trees and agriculture on the same land. Agroforestry already exists on a large scale in the UK in the form of shelterbelts, riverine woodlands and hedgerows.

The aim of agroforestry is twofold; to spread business risk by diversifying income between separate commodities and to enhance natural ecosystem services. Ecosystem services provide public benefits such as carbon storage, flood mitigation and amenity value. Research published in 2022 summarised the results of several agroforestry papers, finding

multiple benefits to soil quality, habitat and food supply (from both trees and crops). Over and above existing practices, more intensive agroforestry methods such as silvopasture and alley cropping may be more difficult to establish but can yield long term rewards.

I spoke with an innovative forester who is doing things differently. Tim Mack, from Elderslie Estates in Scotland, has leaned on his extensive global forestry experience to trial Eucalyptus glaucescens (Tingiringi gum). Whilst the Australian tree may appear to be an unconventional choice as a forestry crop in Scotland’s exceedingly wet and cold climate, it has

some advantages that have been tested by Tim since planting in 2016. Over the last decade E. dalrympleana, E. glaucescens, E. gunnii and E. nitens have been considered and trialled in Scotland for biomass due to their rapid growth rates and high calorific value. This, combined with a short rotation cycle of 10-12 years and hardy temperature tolerance makes the timber crop highly competitive.

As part of Tim’s test trial, he permitted a neighbouring grazier to put 20-25 sheep into the 2 hectare plot. The sheep were able to graze on the 2 metres of herbage between trees. One of the advantages of Eucalyptus over native broadleaf species is that the thinner canopy of the trees allows more light in for the photosynthesis of the undergrowth. The sheep in the trial plot were found to respond well to the vegetation underneath the trees and grazed without damage to the Eucalyptus. An advantage of Eucalyptus is that it is unpalatable to both deer and livestock, meaning early grazing can begin whilst the plants are still young.

As the effects of climate change and the costs associated with increasing weather variability mount up, many have turned to nature-based solutions to create more resilient agricultural systems. Parkhill Farm in Fife made the decision of alley cropping their SSSI site, planting apple trees in widelyspaced rows across a field of malting barley. Apple trees are under-planted

with a permanent wildflower mix, encouraging pollinator species and pest eating insects so that the apples can grow without pesticides. The farm also has shelter belts and wildlife corridors consisting of Scots pine, oak, rowan, silver birch and wild cherry. The 15 acres of forest provides shelter for cows during the summer and for sheep year-round.

In Montpellier, France, one farmer has conducted his own experiment, planting rows of deciduous woodland spaced widely with cereal crops in between rows. The trees were found to stabilize ground-level temperatures and regulate water so that there were reduced droughts, flooding and soil erosion. Since planting the farmer is now reaping better harvests on the test field than on comparative fields without trees. As the climate changes, solutions developed elsewhere may become increasingly relevant, even if most of northern Britain is considered too wet at present for systems of this kind.

However, intensive agroforestry requires significant capital, potentially over many years, for initial planning, planting, establishment and fencing. Whilst some capital costs can be offset in Scotland using an agroforestry grant if native broadleaf species are planted, the grant is restrictive and is widely considered not fit for purpose. The grant pays out at two different stocking levels, an

initial payment and annual maintenance payments, claimable for 3 years. Following the 2022 COP 15 Biodiversity conference in Montreal and the commitment by signatory countries to protect biodiversity, there is a stronger commitment by the Scottish Government to publicly fund projects that restore habitats and biodiversity. As awareness of the global pressures on sustainable resource production grows, producers should be rewarded with public funding for demonstrating that their systems can achieve success in production, carbon and biodiversity.

Whilst currently available public grants can assist in covering capital expenses, it may be useful to seek additional funding from the private sector. In the face of perceived global food insecurity, many buyers are seeking to invest in their domestic food supply chains to improve resilience. Private sector funding seeking to partner with sustainable agroforestry practices may secure income over the long term. Rural businesses work best when innovation can be applied, to increase both the resilience and long-term sustainability of trading. Integrating forestry and agriculture is just one approach in which rural businesses can restore ecosystem services, and other methods should be examined prior to making an informed land management decision. Galbraith maintains an excellent position to assist landowners with expertise in maximising forestry, agriculture and natural capital assets. n

James
Lighton
07342 093 469 james.lighton@galbraithgroup.com
As part of Tim’s test trial, he permitted a neighbouring grazier to put 20-25 sheep into the 2 hectare plot. The sheep were able to graze on the 2 metres of herbage between trees...

Kitty Campbell highlighted the risk of under-insurance as a result of inflation in our Summer 2022 issue and as both inflation and the cost of building materials continue to rise, combined with increasingly unpredictable weather and the impact of rural crime trends, a careful review of insurance policies is again at the top of our agenda.

MAXIMUM COVERAGE

The Importance of Carefully Reviewed Insurance Policies and Top Tips from Lycetts Insurance Brokers

Recent NFU figures highlighted that incidents of the theft of oil, diesel and other fuels had doubled in 2022, compared with 2021, representing a significant risk to rural homes and businesses. Not just in the value of the fuel stolen but the potential damage that can be left behind. Whilst the theft of the fuel itself may be covered, it is worth reviewing the specific contingencies in place to cover the potential resulting damage to the surrounding area, and / or the goods in store. Inflation and commodity price fluctuations may also have an impact upon the values you have placed in your goods in store, for example grain and fertiliser.

Unpredictable weather patterns are also a concern. The freezing temperatures that we experienced in winter 2022-23, resulting in countless burst pipes and flood damaged properties, served as a tough reminder that carefully reviewed insurance policies and up-to-date Reinstatement Cost Assessments (RCAs) are important when it comes to damaged properties and the success of any resulting claims.

It is important to note that a reinstatement value is not an equivalent to market value. The former is an estimate of the total costs associated with reconstructing a building in the event of destruction or significant damage. This includes allowances for

demolition, support and protection, local authority and professional fees, alongside re-construction of the property itself. Taking account of any special features is also very important, as these are often overlooked when calculating a re-build value of a traditional property, or those with a unique design.

Though reinstatement sums within an insurance policy are generally index-linked and therefore increased annually to allow for inflation during the period of insurance, the significant increase in build costs in recent years has meant that the need for a policy review and an updated RCA has become increasingly important. The Building Cost Information Service (BCIS) inflation figure reached 18.5% in Q3 last year, and higher inflation increases the likelihood of error. There has been an even greater variance in relation to particular types of building materials, for example steel and concrete rising to 30% in 2022, making some buildings at a higher risk of underinsurance than others.

If you have improved or modified a property, altering the insured value, and have not carried out an updated RCA in the last 3-5 years, you may be at risk of loss. Similarly, if you have not reviewed the specific contingencies and statement of facts upon which your policy depends, for example notifying your insurer when a

| Rural Matters | Summer 2023

property becomes unoccupied, this might also put you at risk. Where buildings have not been maintained and have fallen into disrepair, insurers are likely to reduce cover to a basic level of fire, lightning, earthquake and explosion (otherwise known as FLEA). As always, good management, maintenance and compliance programmes, and communication with your insurer reduces the risk of damage but also means that where claims are necessary, the higher the likelihood of success.

We asked Wiliam Barne at Lycetts, an independent, UK based insurance broker, for some more tips to consider when it comes to insurance and RCAs: High inflation increases the 1 likelihood of an error due to greater variability in the figures over a period of time, which is why regular RCAs are particularly important. In order to ensure sums insured of properties across an estate have not lagged, it might be worth considering regularly benchmarking a sample of properties.

VAT is an important consideration 2 on sums insured. The rule of thumb is that if the insured can recover VAT (on either partial or complete replacement), the VAT does not need to be included in the reinstatement value. If, however VAT is not recoverable, then this should be included in the assessment. RCAs often leave VAT out, leaving it to the client to consider the relevant implication of tax.

When considering the basis of 3 cover, it might be worth considering insuring on a modern replacement basis. This is particularly relevant to farm and estate buildings and means that the insured can opt to replace a traditionally constructed building with a modern equivalent in the case of a total or substantial loss. Where a building has been insured on a modern replacement basis, minor or partial damage may be repaired in traditional or existing materials, provided it is economic to do so. It is important to review the policy to ensure you understand the basis of settlement. Claims are one of the key 4 influences on whether an insurer will offer competitive terms, or whether conditions, exclusions or excesses might apply. Claims tend be analysed in terms of frequency and severity. Claims for storm damage and burst pipes, both seasonal and weather related, tend

to have a relatively high frequency, and both can be affected by good maintenance and management programmes. Fires tend to be low frequency but high severity, and such claims often form the highest part of an insurer’s claims costs. As such, good fire risk management is essential, including regular EICRs, fire detection, maintenance, and systematic operations such as the regular removal of dust, oil or other combustibles from commercial buildings.

We recommend policies are reviewed carefully with renewal and a full re-calculation should be undertaken on a 3 yearly basis by a qualified building surveyor to take account of any construction related cost increases and any alterations to the property. Whilst the RICS provide indexed rates for rebuilding specific property types through their BCIS, traditional buildings often require unique values.

There is also the additional risk of the presence of asbestos, particularly in older agricultural buildings, that may result in insurers excluding or limiting liability.

However, the risk of loss is not specific to buildings alone. Public liability cover for farms and estates will generally be conditional, particularly in relation to sporting activities, upon adherence to safety and statutory regulations. It is important to review any conditionality and ensure that best practice is followed so that nothing is done that may limit cover if an incident were to occur. There is always a risk of accidents and loss. One of the key considerations when it comes t insurance is whether the management practices in place –be it maintenance, updated RCAs, security, staff training, complianc and regular reviews of the policy are designed to minimise this risk.

Our rural and building consultancy teams here at Galbraith are experienced in providing both management advice and servic alongside the necessary advice surrounding the provision of RCA in an agricultural, residential and commercial context. n

07917 464 262

ailsa.baird@galbraithgroup.com

We recommend policies are reviewed carefully with renewal and a full re-calculation should be undertaken on a 3 yearly basis by a qualified building surveyor...
Ailsa Baird

Private Rental Sector Crises

We are all undergoing a shock with the rise in interest rates and the exorbitant increases in the cost of living, but that shock does not only affect those who rent their home. It affects everyone.

The Scottish Government's consultation, A New Deal for Tenants, launched in December 2021, came with the sub-headline; ‘Views sought on plans to deliver fairer rented sector: Plans to deliver a new deal for tenants, with stronger rights, greater protections against eviction and access to greener, higher-quality, more affordable housing, have been launched.’ It is notable that the concept of ‘fairness’ in this instance appears only to extend to tenants. If

this ‘green, high quality’ housing is to be on offer, how can it also be more affordable? Who is going to stump up the capital to carry out the works and provide these homes? Who could afford to do it if the rents do not in some way reflect the product? The constant march of legislation is more of a ‘stick’ than ‘carrot’ approach, and what is to become of the private rental sector?

In his ministerial foreword to the New deal for Tenants, draft strategy: consultation, Patrick Harvie refers to ‘the role rented housing will play over the next five years as we plan for a green economic recovery from the pandemic, respond to the climate emergency and… create a fairer

country.’ He goes on to exhort that ‘the time is right to do more for people who rent their homes – to ensure everyone has a safe, high quality home that is affordable and meets their needs in a place they want to be.’ There is absolutely nothing wrong with this as a goal, and he is of course right that in this day and age, people should not live in substandard housing, but from an early age, we are taught that ‘fairness’ shows a consideration of both sides of the coin, and in all fairness, I am struggling to see a whiff of that here

Perhaps contrary to perception, Scotland’s private rental sector is apparently characterised by a large number of landlords owning small

Poppy Baggot

07557 973 220 poppy.baggott@galbraithgroup.com

| Rural Matters | Summer 2023
Is it fair? At the risk of sounding opinionated – or worse – whiney, it is with growing irritation that I read about the ongoing issue of ‘fairness’ within the private rental sector in Scotland.

numbers of property. A number of these will have piled hard-won earnings into property as a stable investment aiming for a modest but steady return. The implications of ever increasing standards and compliance coupled with the exorbitant cost of building works and materials vs rent controls and caps, cannot fail but have an impact on this sector, and as such, on the goals of the Government, and ultimately the provision of homes and well-being of the population.

Back in 2017, the private rented sector (PRS) accounted for around 15% of all residential lets in Scotland, but according to government statistics this trajectory has slowed somewhat in the last few years, and this change in course should give us pause for thought. Why is the PRS diminishing? A few plausible suggestions would be:

Rent freeze/Rent Cap: The problem 1 with emergency legislation is that it gets pushed through without consultation, and then seems to remain frozen in place. While there is no longer a freeze – the cap remains, (although not across the board.) For those landlords who have mortgages to pay, as well as factoring in the property maintenance, this is not insignificant.

Rent Controls/Regulations: With 2 regard to rent controls and regulation, this is something more widely seen in Europe, and since 2017 in Ireland, and Scotland should take note prior to forging ahead. The goal in Ireland was to stabilise rents in high pressure areas by setting limits on rent increases. However, media reports would suggest that the regulation has not been successful. To counterbalance the fact that rent increases were going to be regulated, landlords set rents at a far higher initial level, and

perhaps due to lack of knowledge, or the housing shortage, tenants did not report this. Furthermore, many exemptions were made (new homes, student accommodation, renovated homes etc.), and all of this coupled with lack of proper sanctions for offenders, and the lack of power granted to the regulator make this a lesson which the Scottish Government would be advised to heed.

Moratorium on eviction: I would 3 suggest that while this legislation has caused a bit of a hiatus, and has perhaps discouraged some landlords from remaining in the sector, it is a bit of a distraction, as under a PRT (private residential tenancy), eviction of a tenant basically requires tribunal involvement anyway. However, while it might be something of a red herring, it is worth noting as a ‘would be’ landlord, that evicting an antisocial, non-rent paying tenant will be a costly and time consuming business – tempting?

Net Zero goals and increased 4 compliance requirements: Scottish Land and Estates produced a note in February 2023 relating to Energy Efficiency in Domestic Properties. This was incredibly helpful, as the majority of us have probably been hovering between ‘head in the sand’ and panic as to how to bring managed let properties up to rating D…or is it C, and when by? SLE confirms that much of this confusion finds its source in shifting government policy, which has never actually been written into legislation, meaning that at present, although it is essential to have an EPC in place for a sale or let, the minimum standard remains unenforceable – for now. Take this as a breathing space, and programme in some works, as the

‘Heat in Buildings Bill’ is on the way. Either way, for some rural, older or listed properties, attaining the heady heights of an EPC C rating, would be financially unviable for a large number of landlords.

In April 2023, Propertymark published an article revealing data collated for a survey which the Scottish Government had requested. Timothy Douglas, their head of policy and campaigns commented; ‘The legislation is continuing to have an effect on landlord confidence. The majority of agents are still seeing landlords exiting the market. The crux of the housing problem is that demand is far outstripping supply, but the Cost-of-Living Act is having the opposite effect by pushing landlords out of the sector.’ According to the survey, 93% of agents have reported more landlords wishing to leave the PRS because of new measures designed to provide the best for tenants, but with little regard to how landlords are to achieve it.

In a podcast for BBC radio 4 entitled ‘All work and no homes,’ Pennie Stuart investigates the housing shortage in Ullapool and the Highlands. Tourism is one of the main sources of business in these areas, but hotels and local businesses are finding it very difficult to find staff, as they have nowhere to live. Houses are used for short self-catered lets, providing their owners with a better income and more flexibility should they decide they wish to sell, or use the house for another purpose. As such, while this brings tourists to the area to support the economy, it also removes the housing from families or workers who may need it to supply that economy. Badenoch and Strathspey council are hoping to legislate to prevent properties leaving the rental sector and becoming used for short lets by refusing planning but this does not remove the problem for the local economy. Unable to profit from a short let business, property owners are re-marketing and selling to second home owners. Far from a resolution, this then further damages the economy.

I am aware that in my rant above, I have highlighted problems rather than providing solutions, but as in every industry, there is no hard and fast rule about what might suit each individual circumstance. Some areas and properties are suited to longer lets, and some landlords do not have the time to consider the short let option. I would advise some careful thought before becoming a landlord, and if you would like some advice, or to discuss any concerns you may have, please do give one of us at Galbraith a call. n

POWERING UP

Renewable energy has been a part of the landscape in Scotland for many years, with the extensive windfarms to the south of Glasgow a familiar sight for residents of the central belt and large scale wind turbines off the east coast, along with various hydro schemes across the north of Scotland.

It is also not uncommon to see solar panels or wind turbines on farms, where landowners have perhaps installed solar panels in a field or have entered into an agreement with a renewable energy company for a wind turbine. Galbraith has been involved in negotiating contracts for some of these projects and they can be commercially attractive for the landowner.

As we write the cost of energy remains high for businesses and consumers alike, and there has never been more discussion about renewable energy as a means to help ensure the security of our domestic energy supply, (reducing reliance on foreign states such as Russia); to help keep costs under

control by harnessing natural assets such as wind and solar; and to facilitate the transition to net zero.

With the introduction of Scotland’s National Planning Framework 4 (NPF4) in February 2023, there is now clear support for the development of renewable energy in Scotland, in terms of both offshore and onshore schemes and smaller projects. NPF4 sets out planning options which are focused on accelerating the reduction of carbon emissions, part of which increases the possibility of renewable installations on sites which previously would have been considered too sensitive, in a bid to reach Scotland’s challenging Net Zero goals.

It is often thought that renewable energy projects only include windfarms and large solar farms, best suited to estates located in remote areas with vast areas of open land. However, with the increase in use of renewable energy sources which produce intermittent levels of electricity, there has been

| Rural Matters | Summer 2023
Demand for battery storage sites can offer good potential for landowners, says Anna Fisher and Katie Marr

increased pressure on the National Grid. Wind in particular generates an excellent amount of power in the winter but less in the summer, requiring the National Grid Electricity System Operator to balance periods when there is too little power (by using fossil fuels to provide the shortfall) and paying wind energy companies when there is too much wind and the grid is congested. The cost of these grid balancing payments reached £215m in 2022 and is predicted to rise to as much as £2.5bn per year by 2025. All of these issues result in an increase in demand for areas of land for battery storage. Battery storage sites are required to ensure that the electricity generated by renewable energy sources can be stored and then released to the grid when needed, to match the demand for electricity with the supply.

This creates an opportunity for a variety of landowners, particularly those situated close to an urban area. For a battery project, the storing of 50MW can be done on 2

acres of land, so in many cases, only a small area of land is required for such a battery, yet this kind of agreement offers a good potential income for landowners in the region of £2,000 per MW.

The battery units themselves look not dissimilar to shipping containers and the sites required vary significantly in size, depending on the capacity of the local substation and planning restraints.

Battery storage sites are situated either next to substations or colocated next to renewable energy projects and crucially are in areas where the grid is constrained.

With the introduction of NPF4 and greater commitment from politicians to aiding the transition to renewable energy generation, it is likely that planning obstacles may

be more easily overcome in the future.

Anyone considering the sale or lease of property for electricity storage should examine closely the economic drivers and seek expert advice on revenue potential and valuation.

Galbraith is actively working to link developers and landowners to these desirable sites. Our planning and energy teams are undertaking site referencing, preparing feasibility studies, negotiating site leases, and preparing planning applications. It is a fast-moving sector and it is essential to ensure that landowners will not be left behind.

For more information please contact our rural & energy teams in your nearest office. n

Katie Marr 07824 435 087 katie.marr@galbraithgroup.com Anna
07775 407 194 anna.fisher@galbraithgroup.com
Fisher
Battery storage sites are required to ensure that the electricity generated by renewable energy sources can be stored and then released to the grid...

Right Tree Right Place

My family has been farming on the Kinloss Estate in Fife for generations – my greatgrandfather bought the property in 1887 and in those days it was mainly down to grass but my father started to actively farm in the mid 1960s which I have continued, along with my wife Margo. We now use farm contractors as opposed to direct employees and we also let out holiday cottages. The farm has hosted the Fife Show for 20 years which attracts about 10,000 people on the third Saturday of May.

We have tried to encourage wildlife for many years, having already created water habitats and planted hedgerows. There is a burn which runs through the farm and an old mill pond (the farm used to be a mill) which we restored in the 1990s.

We recently planted 1,000 new trees with a subsidy from the Woodland Trust’s MOREwoods scheme.

Several years earlier we had sown an area of canary grass and it so happened that this area connected a large area of existing woodland on a couple of neighbouring estates to our own policies. By planting more trees on this area it has created a perfect and permanent wildlife corridor, linking perhaps over 100 acres of diversified cover.

Wildlife corridors are important as they bridge the gap between habitats which otherwise would be small and isolated and join them together. Linking core wildlife habitats helps to restore and preserve biodiversity, allowing movement between important habitats to maintain genetic diversity in wildlife populations.

I heard about MOREwoods through Lloyds Bank, which helps fund the scheme for the

| Rural Matters | Summer 2023
a 100-acre wildlife corridor by planting 1,000 new trees
Addison-Scott
Creating
with Chris

Woodland Trust. In particular the low levels of bureaucracy for the MORE Woods scheme appealed to me, unlike many other such initiatives.

The long term survival of trees is the key issue so to protect saplings from being eaten by grazing animals, tree guards were used.

We are able to inspect the site at least once a fortnight to carry out repairs to the protective tubes as required. We are now into the second growing season and there is at least a 99% survival rate!

It really has worked for us and I would definitely recommend it as a way to increase nature on your land.

Sarah Unia, who promotes the MOREwoods scheme for the Woodland Trust, said:

“It’s inspiring to see what Chris has done on his farm. These trees will be essential for so many reasons – not least for boosting biodiversity and combating climate change. Our MOREwoods scheme is an easy, effective and low cost way for landowners to bring more nature to their land.” n

For more information about MOREwoods visit: www.woodlandtrust.org.uk/plant

Chris Addison-Scott

07774 788 854 chris.addison-scott@galbraithgroup.com

New restrictions on hunting with dogs in Scotland

Following the Hunting with Dogs bill being passed by Holyrood on the 24th January, the bill became the new Hunting with Dogs (Scotland) Act 2023, replacing the Protection of Wild Mammals (Scotland) Act 2002.

Currently the 2002 Act will remain in place until the relevant sections of the Act are commenced, the date of which is still unknown.

The Act aims to establish a regulatory framework regarding the practice of hunting with dogs, resulting in significant restrictions regarding the purpose for which dogs are used to hunt wild mammals. Therefore organized hunting with a dog will be deemed a criminal offence unless exercised under a lawful exemption within the Act. These exemptions are subject to strict conditions which must be met if the exemption is relied upon in court.

The exemptions are as follows;

• above ground.

To manage wild mammals

• ground.

To manage foxes below

• game shooting and deer stalking.

In connection with falconry,

• injured wild mammals.

To relieve the suffering of

To search for dead wild

• mammals.

In connection with an

• environmental benefit scheme.

The Act also introduces two licensing schemes for the use of more than two dogs, the first is for the purpose of preventing damage to livestock, woodland or crops, preventing the spread of disease or protecting human health.

If a licence is being obtained on the grounds of protecting livestock, evidence must be provided to NatureScot that there is no other solution which would be effective in achieving this purpose. The second licence is for use classed under “Environmental Benefit” which must fall under a NatureScot approved scheme or plan for the following;

Preserving, protecting or • restoring a particular species for environmental benefit.

Preserving, protecting or • restoring the diversity of animal or plant life.

Eradicating an invasive non- • native species of wild mammal from an area.

The Act imposes severe restrictions on the use of dogs in rural areas in Scotland. We are concerned that this will severely limit effective protection of livestock and may prevent gundog trials. It remains to be seen how NatureScot will assess applications for a licence to use dogs for the protection of animals or plant life. n

Joe Rome
542698 joseph.rome@galbraithgroup.com
07768

Aberdeen 01224 860 710 aberdeen@galbraithgroup.com

Ayr 01292 268 181 ayr@galbraithgroup.com

Blagdon 01670 789 621 blagdon@galbraithgroup.com

Castle Douglas 01556 505 346 castledouglas@galbraithgroup.com

Cupar 01334 659 980 cupar@galbraithgroup.com

Edinburgh 0131 240 6960 edinburgh@galbraithgroup.com

Hexham 01434 693 693 hexham@galbraithgroup.com

Inverness 01463 224 343 inverness@galbraithgroup.com

Kelso 01573 224 244 kelso@galbraithgroup.com

Moray 01343 546 362 moray@galbraithgroup.com

Morpeth 01670 331 500 morpeth@galbraithgroup.com

Penrith 01768 800 830 penrith@galbraithgroup.com

Perth 01738 451 111 perth@galbraithgroup.com

Stirling 01786 434 600 stirling@galbraithgroup.com

Expertise

Galbraith operates from 13 offices across Scotland and Northern England, bringing our clients a wealth of experience in:

• Building consultancy

• Commercial forestry & woodland management

• Commercial property sales & management

• Estate, farm & forestry sales & acquisitions

• Estates, farming & land management

• Natural capital & carbon

• Property lettings

• Renewables and utilities

• Residential estate agency

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Articles inside

New restrictions on hunting with dogs in Scotland

1min
page 39

Right Tree Right Place

1min
pages 38-39

POWERING UP

2min
pages 36-37

Private Rental Sector Crises

5min
pages 34-35

MAXIMUM COVERAGE

4min
pages 32-33

Market Update Summer 2023

11min
pages 26-32

NO BPS NO PROBLEM?

3min
pages 24-25

Telecommunication Tribunal

2min
pages 22-23

Scotland on Screen What’s the process ?

2min
page 21

of the Pork Pie

1min
page 20

The pros and cons of robotic milking

1min
page 19

DATA-LED DAIRIES

0
page 18

Rise of the Machines

2min
pages 16-17

Cost of Living Challenge for Landlords

1min
pages 14-15

What do I need to know?

2min
page 13

Contract Farming Agreements

2min
page 12

Biodiversity Strategy 2045 and Environmental Improvement Plan 2023

3min
pages 10-11

Environmental Land Management Scheme and the Landscape Recovery Scheme

1min
page 9

Farmstrong Scotland ‘Live well to farm well’

1min
page 9

Biodiversity Net Gain offers interesting opportunity for landowners

1min
page 8

Building trust in the wild west

2min
pages 6-7

Supermarkets promise a lot and deliver little for homegrown meat producers

1min
page 5

Fight or Flight The Impact of Avian Influenza

2min
page 4

Welcome to Rural Matters Summer 2023 Edition

1min
pages 2-3
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