Origin Rural is a consultancy with the rural sector at its heart.
Through first-hand experience, we provide owners and managers of land and property with high quality support from the ground up.
Confessions
As 2025 gets underway, global events are shaping the landscape more than ever.
Domestic policy feels increasingly infiltrated by the effects of global markets, geo-politics and the clutches of supply chains beyond our control. So what is in store for rural businesses as we enter the next quarter century?
The pending inauguration of President Trump above all has and will continue to effect the rural sector. A policy of import tariffs will have direct consequences for UK exports, with agricultural produce one potential victim of an unseated supply dynamic around the world. Broader still is the destabilising effect on defence coordination across Europe and the Middle East; environmental collaboration underpinned by the Paris Climate Change agreement; and regulation of US exports. Markets have been pricing in these destabilising factors for months, and the effects on interest rates, the costs of good and services, and inflation are already being felt at individual business scale.
The consequences for ongoing and potential conflict, alongside domestic pressure on the Treasury to pick up the slack appear particularly gloomy. As illustrated by the outbreak of war in Ukraine, the knock-on effects beyond the war itself are undeniable and lasting. In agriculture, while grain and protein prices have returned to ‘pre Ukraine’ levels, the inflation of overhead costs associated with machinery and power have not. 2024 margins in the arable sector are some of the poorest in recent memory, compounded by poor weather and buoyant global stocks. Consequently, investment and associated fanning of service sectors, employment and innovation is inhibited.
At domestic level, the Government’s Autumn Budget was broadly seen as ‘anti-business’, and not without justification. Changes to Inheritance Tax (IHT) relief is the headline for the rural sector, with effective capping of both APR and BPR due to take effect from April 2026. Steven Reed recently reiterated his Government’s commitment to its IHT policy, (effecting just 500 of the wealthiest estates each year in their assessment) while preparing the ground for a 25-year farming road map. In attempting to regain credibility at the Oxford Farming Conference, Mr Reed outlined ambitions to reconfigure the regulation of agriculture, supply-chain fairness, planning policy and series of pro-business measures.
As things stand, the Government has committed £5bn to farming investment over the first two years of its tenure. Alongside continued roll-out of the Sustainable Farming Incentive and ELMS, there will be support for a transition towards a “more productive and environmentally sustainable agricultural sector, ensuring food security”. The global markets may have something to say about that commitment, along with wider public spending targets when the OBR reassess compliance with the Chancellor’s own Fiscal Rules in March this year. Watch this space.
The rhetoric around transition and supply-chain reform suggests that DEFRA policy is focused on fewer ‘hand-outs’, and instead creating a trading environment where rural businesses are self-sufficient without subsidy. Given the black hole in public finances and promised land of an optimised market place, the subtext appears to be a withdrawal of public funding for public goods. In practice I foresee three themes for the agenda:-
Narrow targeting of agri-environment schemes to only the most important habitats
Regulation in place of incentivisation
Longer term commoditisation of agricultural and land-use output
Highlights
🦔 CIEEM Releases Biodiversity Net Gain for Small Sites Report - CIEEM shares a new report summarising responses to a Biodiversity Net Gain (BNG) for small sites in England survey
🐝 Guidance now available for improved Countryside Stewardship Higher Tier offer - Ahead of the improved Countryside Stewardship Higher Tier (CSHT) scheme opening for applications, we’ve published the new scheme guidance on GOV.UK.
🏠The Government Response to Proposed Reforms to the National Planning Policy Framework and the revised NPPF - The UK government published its response to the consultation on proposed reforms to the National Planning Policy Framework (NPPF) and other changes to the planning system on 12 December 2024.
⚖️Consultation on right to renew business tenancies published - The Law Commission has published its first consultation paper considering how the right to renew business tenancies, set out in Part 2 of the Landlord and Tenant Act 1954 (and which is called “security of tenure”), is working and whether it meets the needs of business tenants and landlords
⚡Budget 2024 - IHT winners and losers - The Autumn Budget 2024 – who are the winners and losers from an Inheritance Tax perspective?
🌳The Bristol Avon Catchment Market is a new opportunity for farmers and landholders to earn money by creating new woodlands, wetlands and grasslands - long-term nature-based projects will deliver valuable environmental services such as Biodiversity Gain, carbon sequestration, natural flood risk management and nutrient mitigation.
Update from the farm
Winter brings with it a familiar routine. Early dark mornings, and in dairy farming; straw, silage…and something else beginning with s. It is strangely satisfying to persevere through the challenging conditions and see livestock continue to flourish in their winter regime. Most farmers share a similar steely determination to overcome and mid-winter brings it the fore. The recent protests and organised demonstrations have reinforced a united front shared across the farming community a mutual understanding of the challenges we all face. Even those who are unaffected by IHT changes drew together in recognition of the need to support one another. From a professional perspective, the last few months have really reiterated why I am invested in the sector and take great satisfaction from working with my clients.
My previous newsletter landed prior to the Ride Across Britain, and I am pleased to report that we made it to John o’Groats in the autumn unscathed. It was an incredible experience and perhaps more of a challenge than anticipated. Seeing the length of Britain on two wheels gives a unique perspective, and cycling into Scotland after just 5 days was surreal. I am not rushing to go camping again immediately, but I could get used to being followed everywhere by a very obliging catering tent. Thank you again for all the donations and messages of support.
Best wishes,
Chris
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Chris Jones
Owner / Origin Rural
originrural.co.uk
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Origin Rural is a consultancy with the rural sector at its heart.
Through first-hand experience, our independent professional services provide owners and managers of land and property with high quality support from the ground up.
Origin Rural is a trading name of Origin Rural Ltd. Company No. 13591790