The future of the countryside

Page contents

• Priorities
• Replacing the CAP
• Farm tenancies
• The problem of dilapidations
• Subsidies and grants
• Responsibilities
• Town v country
• The reality of farming
• When things go seriously wrong
• What is to be done?
• Solving the problem of land value

Priorities

The top priority of any government is security of food, water and energy supply. These are followed by infrastructure, health, education, housing, security, environment and others.

If security of food supply is top of the list one would expect governments give top priority to policies for agriculture and the countryside.

No government, of any colour, has ever done this.

After the Brexit vote it seemed that some attention was being paid by Michael Gove with the development of the Environment and Land Management Scheme (ELMS). With the arrival of Liz Truss as PM this seems to have been quietly dropped - or at least pushed to one side, with a banker now in charge of DEFRA.

The lack of priority given to food production, agriculture and the countryside probably explains why civil servants at DEFRA keep a stack of flash cards ready for any new minister: "this is a cow / sheep / pig / chicken / duck /... and this is a field of grass / wheat / barley / oats / turnips / sugar beet / carrots /... and this is a tractor / combine / side rake / mower / baler / wrapper / plough / seed drill /..."

"Let the market decide" has been, and continues to be, a disaster for our countryside and our wider environment. Farmers do what is asked of them - the job of government is to ask them to do what we, as a society, need.

Replacing the CAP

Leaving the EU meant an alternative had to be found to the wasteful Common Agricultural Policy (CAP) which paid farmers (large or small) an amount per acre - no matter if they needed the money and no matter what they did with it.

At the moment (January 2022) the Basic Payment Scheme (BPS), which replaces the previous CAP subsidy, provides £1.6 billion per year to English farmers but is being reduced each year until ending in 2027.

Payment by land area (CAP and BPS) is a subsidy for large, wealthy landholders.

The Queen and Prince Charles continue to receive BPS payments as does James Dyson (second largest private landholder in England and supporter of Brexit), the Duke of Westminster (whose landholdings go back to The Great Theft of 1066), and Paul Dacre (ex-editor of the Daily Mail, major landholder and supporter of Brexit). Until his death in 2021, the billionaire racehorse owner and friend of the Queen, Prince Khalid bin Abdullah al Saud of Saudi Arabia, also received the payment.

In theory BPS should go to the person farming the land but in many cases the landholder claims the BPS (by pretending to be a farmer) and also claims rent from the tenant farmer who actually does the work.

The ending of BPS will destroy many small tenant farms.

From an eye-pleasing, peaceful field of cattle:

to yet more "efficient" green desert - in under 6 years.

Examples

These examples are fictitious but represent the reality of rural tenancies..

Landholder X has the freehold on 2,000 acres of land in the English Midlands. Neither he nor his family are farmers but his family has been living off rent for several hundred years.

Farmer A is a tenant on a 150 acre farm. He used to be a dairy farmer but falling milk prices and a lifetime of early mornings and late nights, 7 days a week, 52 weeks a year, persuaded him to give up his milk quota and go over to beef cattle.

Farmer A has a full agricultural tenancy so he has security of tenure. He pays the landholder £75 an acre rent (£11,250 per year) and he receives £94 per acre (£14,169 per year) from the Basic Payments Scheme (BPS). BPS pays the rent.

Farmer B is a tenant of the same landholder and he has 250 acres under a business tenancy. His tenancy is limited to 10 years so he is unwilling to make significant capital investments.

Farmers B pays the landholder £120 an acre rent (£30,000 per year) and he receives £94 per acre BPS (£23,500 per year). The BPS does not cover his rent.

Farmer C, like Farmer A, has a full agricultural tenancy with the same landholder but he also rents an additional 100 acres under annual licence. He pays £75 an acre rent under his tenancy and £130 an acre under the licence contract. He has zero motivation to maintain hedges, ditches etc. on the land he rents under licence.

In all three cases the BPS is providing a guaranteed income for the landholder.

Farmer A may survive after BPS ends. Farmer B will find it difficult to survive and farmer C may be forced to give up the land he rents under licence.

Something has to give.

• Farmers may go broke - this has happened regularly in the past.
• Farmers may find some magic way to replace the BPS payments. Perhaps from the same Magic Money Tree that provided billions to the Government's friends during the Covid pandemic.

  There are only so many farm shops, petting farms, ice-cream sheds and yoghurt sheds that the economy can stand! Farm shops etc. require additional labour, additional investment and additional management, while the jobs on the farm still have to be done. If one is working 12 to 18 hours a day there is not much slack for new "enterprises".

  Those justifying wine and cheese parties on the grounds that "they have been very busy" haven't a clue what real farm work is all about.

• Landholders may have to accept lower rents.

The problem of dilapidations

Tenants often find it impossible to get landlords to live up to their obligations. Farm houses and farm buildings fall behind reasonable modern expectations and repairs are delayed or never carried out. Many farm houses still have no central heating, no double glazing and none of the facilities that everyone else has come to expect as normal - no "townie" would put up with this.

Life becomes an almost endless battle between tenant and landlord - often with "land agents" standing in the middle when the landlord is either unwilling or unable to negotiate for his/herself.

No battle is more bitterly fought than the one over dilapidations when a tenancy ends - so bitterly fought that buildings end up being demolished and tenants risk losing their life savings. In theory the tenant should be able to claim for any improvements made to the farm and any loss of income caused by landlord's failure to keep buildings in good repair. The landlord should be able to claim for anything the tenant was contracted to do but failed to do - like the maintenance of gates etc.

Advice to tenants: put all your assets into a trust so when the tenancy ends there is nothing for the landlord to claim against. Landlords frequently put land into trusts to avoid paying tax so tenants should use the same trick to protect their assets.

Lawyers and land agents make a great deal of money during dilapidation battles.

There are good landlords who take an active interest in how their land is farmed, who talk to their tenants as a group and as individuals, who are keen for tenants to adopt modern agricultural practice, who are willing to make capital investments when it increases the value of their assets, who invest part of their rental income in the maintenance of farm houses and farm buildings, who wish to ensure that their tenants make a good living and who wish to improve the environment for society, their tenants and themselves.

There are landholders who are good, decent, well-meaning people but incapable of running a business where they have to work with their tenants (they lack people-management skills) and not simply treat them as cash-cows while resenting every penny spent on maintenance.

There are rapacious landlords, out for every penny they can get and determined to maximise their income while making the minimum investment.

Any landholder will recognise which group they fit into.

Subsidies and grants

The range of subsidy and grant payments to agriculture currently include:

• Basic Payment Scheme.
• Countryside Stewardship Scheme.
• Environmental Stewardship.

The government plans for "Future Farming" involve phasing out BPS and other schemes in favour of three new ones under the overall heading "Environmental Land Management" (ELM):

• Click here for a straightforward overview.
• Sustainable Farming Incentive - for on-farm work, fairly small scale.
• Local Nature Recovery - encouraging farmers to work together on local environmental projects.
• Landscape Recovery - large scale projects.

The intention of these schemes is to stop handing over cash (with no strings attached) and replace it with payment to farmers for work done for the social good - the maintenance and restoration of our countryside. It is indeed "our" countryside since all land in England is owned by the "Crown" (that's us) and permission to "hold" it is granted in the form of "freehold". You "own" everything on the land (buildings, plants, whatever) but you "hold" the land itself.

Before commenting on these schemes it is worth refreshing our minds about who is responsible for what.

Town v country

There is a temptation for those who live in towns and cities to assume that the countryside is full of rich farmers operating mega-farms who all think in the same way, who are in favour of hunting and factory farming and who want to tell everyone else to "keep off my land".

There is a temptation for those in the countryside to see all "townies" as ignorant litter louts who trample on crops, frighten livestock with their dogs (see below), leave gates open and treat the countryside as a theme park and race track for cyclists! "Townies" fail to understand that the countryside, and its lanes, are a farmer's office - a place of work - so lanes will contain slow moving tractors and surfaces will often be muddy - the countryside is a muddy, and sometimes smelly and noisy, place!

The reality of farming

The reality is very different.

• Only a tiny minority of people who live in the countryside are involved in agriculture. Most rural dwellers commute to work in towns or cities, work at home, or have retired to the countryside.
• The average farm size in England is 87 hectares (214 acres).
• 33% of farmland is rented.
• Average annual income (*) for livestock farmers is £14,100.
• Average annual income (*) for cereal farmers is £63,800.
• The average farm supports 2.9 people.
• Many (most?) farmers don't support hunting across their land. This is certainly the case in Trusley.
• There are wealthy people in the countryside - landholders living off rent from tenants.
• Farmers are not a homogeneous group - like the rest of us, they have a wide spectrum of views about the world. It is true that, on the whole, they tend to be conservative (small "c" and often capital "C") - their lives are dictated by the weather and the rhythms of the year rather then by flavour of the month fads.
• Farmers have always responded to social and market pressure. When, in the 1950/60s, they were asked to produce more food, they were encouraged (with grants!) to rip out hedgerows to create larger fields for larger machines. They are incentivised to use more artificial fertilisers and to use genetically modified seeds to increase yields. When the market price for wheat goes up, more farmers grow wheat.
• It is unfair to blame farmers for the enormous damage done to our countryside over the last half century. Nitrogen run-off from farmland has poisoned our streams and rivers, the reduction in hedgerows and lack of headlands (the motorways of the countryside) has had a horrendous effect on wildlife species.

  The mono-culture of The Great Green Deserts of Eastern England is not helpful to wildlife nor pleasing to the eye - it is boring countryside which results in high levels of loneliness, mental illness and rural suicide!

  Farmers have followed the demands of society and the market - and, like the rest of us, they work to make a living! Some have bucked the trend and made the personal decision to do otherwise (and frequently reduced their income as a result) - but, on the whole, farmers have simply done what was expected of them.

  If you want to blame anyone for the state of our countryside and wildlife habitats, you simply need to look in the mirror - we are all responsible.

Click for source.

* note: this is "income" after costs. A livestock farmers has to buy stock and provide food - as well as covering the cost of equipment needed to run the farm - for ploughing, sowing, spraying and cropping. Then there are vet's fees, auctioneer's fees, "fallen stock" fees, farm secretary's fees (the paperwork for a modern farm is horrendous!) accountant's fees and animal transport costs.

In the case of the 33% of farmers who are tenants, there is rent to pay to the landholder - in 2018 the average rent was £170 per hectare (£69 per acre) so the average 87 hectare (214 acre) farm has to pay £14,790 rent.

Click for source.

Most small farmers are in debt (usually for buying stock or equipment) and, in terms of hours worked, most small farmers earn below the minimum wage.

When things go seriously wrong

Someone has to produce food.

Someone has to look after the countryside - it won't look after itself - even if "rewilded"!

Certain aspects of our economy should be in public hands: key infrastructure and services should not be the source of profit for private (often foreign) companies. As we have seen over the last few years, private companies charged with providing key infrastructure projects and services can go broke, leaving the taxpayer to clear up the mess.

Food is obviously of strategic importance yet history shows that governments have frequently misunderstood the countryside and those who work in it.

Both the USSR and China decided that the best way to organise food production was through central planning and public (state) ownership of land. Land was seized from landholders and those who worked on the land ("peasants") were instructed to work on collective farms.

Both countries failed - and millions died of starvation as a result of famine when agricultural production plummeted. Peasants saw no purpose in working hard since additional hard work brought no additional personal benefit. People are easy to understand: if those who work least get the same as those who work most then the hard working will do less - it ain't rocket science.

Both countries learned a lesson. Both have now engaged in land reform that returns land to those who work on it and this has resulted in a significant increase in food supply.

Civilisations are built on the back of agricultural surplus. Those working the land produce more than they need for subsistence and sell or barter the surplus.

An unmotivated peasant, without the freedom to generate and sell a surplus, does no more than is necessary to feed his/her family.

In 2021 the government in Sri Lanka decided to tell farmers how to work their land. They dictated that Sri Lanka would "go green" with no use of artificial fertlisers, pesticides etc. The result is serious food shortages and the country is potentially bankrupt.

During the Irish Potato Famine of 1845-1852 up to one million people died of starvation and another million emigrated. In this case both Tory and Whig governments decided to support the market and allowed huge quantities of food, particularly grain, to be exported from Ireland even as people were starving. The greed of large landholders and merchants, supported by the MPs they bought and paid for, led directly to the deaths of thousands.

What is to be done?

A balance must be struck between the need to grow food and the need to look after our environment.

Farmers farm to make a living - they will adapt as long as we are clear about what we want them to do and show how they can make a living out of it.

Not all land will be 100% productive - upland sheep farmers would not survive in an open market without help. Naturally they feel angry with Liz Truss when she announces a deal to allow cheap Australian and New Zealkand meat into the UK market without any controls.

Do we want sheep on Welsh hills or do we want all our uplands to revert to scrub? Do we want the land to be managed in the best interest of the environment so farmers can make a living and we can enjoy the countryside? Whatever we want, someone will have to do it and they have every right to be paid for it.

Obviously it isn't fair to give farmers money based solely on how much land they have - the wealthy simply get wealthier!

The government proposals are based on the reasonable idea that payment should depend on an agreement to carry out certain acceptable work and to show that the work has been done or is being done. Defining targets, and monitoring their achievement, become key to ensuring that such a system works - we can't have payment simply based on what farmers promise to do - after all, some of them may not do it!

At the moment the new schemes are about to start pilot trials which will allow more details to be tied down. For example:

• How do tenant farmers enter a scheme if their landlord doesn't agree to it?
• How do we ensure that the payment goes to the people who do the work rather than putting yet more money into the pockets of wealthy landholders like James Dyson et al?
• How do we stop wealthy landholders dumping their tenants, taking land out of food production and walking off with the "rewilding" payment?
• How do we ensure that we meet the number one responsiblity of government: "a secure food supply without excessive dependence on food from outside the country."

  Going "green", and cosily environmental, doesn't help if we starve to death because we can't source food from outside the country - just as we are having difficulty sourcing gas today! What level of sustainable self-sufficiency is acceptable?

The best things is wait and see how thing progress - while keeping an eye on what farmers and their organisations say as well as on what environmentalists say.

Solving the problem of land value

This type of activity, forcing up the price of land, is relatively simple to deal with by introducing a Land Value Tax (LVT} based on the open market value of all land nationwide.

LVT is:

• Not a new tax - it replaces Council Tax and Business Rates.
• Simple to understand - an annual, national, flat rate tax on the open market value of all land (rural and urban) - no matter what it is being used for.

  ("Open Market Value" is what someone would pay for it if it came on the market.)

• Fair -those with most, pay most.
• Impossible to avoid - it is paid by the freeholder and you can't hide land in a Swiss bank account or in a tax haven!

As a replacement for grossly unfair Council Taxes and Business Rates, LVT would go a long way to resolving the problems of land values and land usage. It will also encourage the efficient use of land and, by reducing land values, encourage new entrants into the industry.

Please click here for more details on LVT.