Galbraith Rural Matters Summer 2022

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n The Covid Recovery Reform Bill n Food security or natural capital:

What should Scotland be growing? n Farming in protected landscapes n Scotch Lamb: Counting the carbon

Summer 2022

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Contents 3

Scotch Lamb: Counting the carbon

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Food security or natural capital: What should Scotland be growing?

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BPS, ELMS and CS in England

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Accurate insurance valuation: Six key considerations

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Farming in protected landscapes

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Funding the purchase of a small holding. Is it possible?

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Thinking outside the bag

10 The Snug at Logie Farm 11

Urban fringe access

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Tourism, leisure, farming & forestry all support strong market for rural property

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Lifestyle properties that have it all

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Full steam ahead for the electrification of Scotland’s rail network?

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A permanent change for residential tenancies

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Short Term Lets Legislation: What Are The Implications?

20 Scottish Tea going from strength to strength!

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Training endurance horses

22 Leading the way on lead 23 Project Laxford

Welcome to Rural Matters Summer 2022 There is a saying, ‘Ne’er cast a clout till May is oot’ and as I write the first May flower has appeared on the Hawthorn.

Warmer days are ahead and with it will bring growth in not only our crops but also the newly born livestock.

The war in Ukraine has seen the uncertainty within the industry increase. With 29% of the world’s fertiliser produced in Ukraine, this has been the most concerning impact due to the escalation in price. At least the grain markets have reacted accordingly, however we are yet to see this transfer to the livestock sector and with feed costs rising exponentially we must hope for a price uplift.

The situation has highlighted that food security must stay on any government agenda and whilst we must find sustainability and enhance biodiversity, we must also

find a balance between food production and the environment.

Many of our articles within the latest edition of Rural Matters will cover the above points and offer a greater insight to the challenges facing the industry. We also look at the opportunities embraced by some landowners together with a roundup of the latest legislation and market updates.

We hope you enjoy reading our latest version of Rural Matters.

Ian Hope 07968 209 543 ian.hope@galbraithgroup.com Head of our Rural Department

24 Scottish estate market. Demand significantly outstripping supply 26 A9 Dualling Update 27 Virtual Events 27 Approached by BT Openreach about wayleaves to facilitate broadband?

28 Market Update 31

Farm Consultancy Update

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Residential Property Letting.

Compliance Checks

33 Telecoms update: Landowners should beware future pitfalls of code agreements 34 Successfully farming and contracting since 1892

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.

Follow us on twitter: @Galbraith_Group Like us on Facebook: www.facebook.com/GalbraithPropertyconsultancy See us on instagram: www.instagram.com/GalbraithGroup Join us on Linkedin: www.linkedin.com/company/galbraith

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Scotch Lamb - Counting the carbon Never before has there been such awareness of the carbon footprint of the food we eat.

In one study conducted by the World Wildlife Fund in 2018, a lamb dish (lamb crawl) was found to have the highest carbon footprint of all British dishes, with a huge 5.9kg of CO2 per serving.

This could easily be attributed to the poor feed conversion rate of lamb relative to more intensively reared meat such as pork or salmon. It could be from supplement concentrate feeding to allow for lambs to grow through the harsh winters. It could be from the diseases that cause inefficiencies of growth such as foot rot, keratitis and pneumonia.

However, not all Scotch lamb is intensively reared or exposed to disease. The uplands of Scotland offer a native, natural, forage fed lamb product. Extensive grazing systems reduce disease concentration and their selective grazing increases biodiversity and encourages plant regrowth. This positive effect can renew and develop the upland habitat which results in a negative CO2 output for the lamb reared there.

When considering Scotch lamb, the idea of black smoke billowing from tractors and precious cereals being used to feed stock can be left in the lowlands. Up in the hills the shepherds gather in the clean air with dogs and crook, as they have done for decades. n

Ian Armstrong 07825 535 491 ian.armstrong@galbraithgroup.com

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Food security or natural capital

What should Scotland be growing?

As concerns of a national food crisis grow, the knee jerk reaction has been to propose planting more crops.

NFU Scotland has called for a moratorium on Ecological Focus Areas, currently requiring the majority of arable farmers to put 5% of their arable land into hedges, margins, agro-forestry, or otherwise.

It is thought that this change will free up 17,500 hectares for additional cereal growth. And what of ‘natural capital’? Now doesn’t appear to be a good time to be planting trees when Russia and Ukraine, two of the largest exporters of wheat, accounting for 29% of global exports, are at war.

Countries across Europe have sprung into action, with France publicly announcing the prioritisation of production over sustainable farming, other European countries contemplating potential bans on exports of wheat, and the EU Executive considering delaying the Green Deal policy. Where does that leave Scotland?

The current focus on natural capital and agri-environmental schemes seems to conflict with broader questions of efficient land use and production. However, cereal shortages need not necessitate a reversion to post-war intensive farming techniques. As it stands, the majority of cereals grown in Scotland are used

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for animal feed and alcohol production. This is in a country where Less Favoured Areas account for 85% of agricultural land. The total area sown to cereals in Scotland has remained steady in recent years, and only the yields have varied, entirely dependent upon weather and land grade. There are criticisms that agrienvironmental schemes and EFA requirements take yet more valuable land out of production, when in reality the majority of these areas were marginal and unproductive to begin with, being better suited to grazing livestock or providing other ecosystem services.

Natural capital is not solely the process of planting trees. It encompasses all aspects of the physical world around us, including soil, water, habitats and species, and from these assets we reap the benefits of food, water and materials.

This is known as provisioning, and the more we invest in the natural capital around us in the form of better management practices, the more benefits and goods may be provided.

It is not only trees that are capable of storing carbon: grasslands can store between 606-626 tCO2e /ha, compared with approximately 612 tCO2e /ha stored in coniferous

woodland. This same grassland can be used to feed livestock, as opposed to grain feeding. Whilst arable soils have a lower carbon content, certain management practices such as use of green cover crops, minimum tillage and crop rotations all improve soil structure, increase carbon storage and ultimately lead to a reduction in inputs. Limiting the use of inputs is becoming increasingly important, at a time when fertiliser and fuel prices have reached record highs.

Cereals cannot be grown on every inch of Scotland. If the areas best suited to growing cereals were used as such, with sustainable techniques, and the marginal grassland and hill areas for feeding livestock, the grain that is produced in Scotland might then be able to fill the void left by Russia and Ukraine.

Recent events need not force us to re-think sustainable farming and natural capital, they may just compel us to think more carefully about what we grow, how and where it is grown, and for what purpose. n

Ailsa Baird 07917 464 262 ailsa.baird@galbraithgroup.com

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BPS, ELMS and CS in England DEFRA’s Agricultural Transition Plan sets out the changes to the Government’s farming policy which are due to take effect in England.

This includes phasing out the Basic Payment Scheme (BPS) and the introduction of three new Environmental Land Management Schemes over the next 5 years.

Countryside Stewardship will continue to be available for new applications in 2022 and 2023.

The current focus on natural capital and agrienvironmental schemes seems to conflict with broader questions of efficient land use and production.

Ailsa Baird.

It is vital that Farmers and Landowners understand the transition process, and what it will mean for their businesses. BPS has been a staple of farming in the UK for many years, so a new era of farming in the UK is right around the corner.

BPS is a direct payment available to farmers with eligible land, providing that they comply with Cross Compliance Rules. Whereas ELMS will be available to farmers and other land managers for delivering specific environmental benefits. The new ELM schemes are: Sustainable Farming Incentive (SFI), Local Nature Recovery (LNR) and Landscape Recovery (LR).

ELMS will gradually be rolled out from 2022, with the SFI being the first scheme launched. The SFI is currently a pilot scheme that will initially become available to any applicants who are currently eligible for BPS . The standards are based on three key principles: create greener landscapes and improve biodiversity; promote cleaner air and water, and guard against environmental risks such as climate change and flooding.

When the SFI is fully rolled out, there will be three tiers of payment: introductory, intermediate and advanced. The aim being that farmers will be rewarded with payments relative to the level of action to which they formally commit.

SFI agreements will last for 3 years, with some amendments allowed up to 12 months after the start date.

This should allow for more flexibility on amending agreements compared to the current Countryside Stewardship agreements.

The initial rollout of the SFI, which is due to open for applications in

2022, will include the following standards: • Arable and Horticultural Soils standard (introductory and intermediate level) • Improved Grassland Soils standard (introductory and intermediate level) • Moorland and Rough Grazing standard (introductory level) Farmers will also be able to receive payment for an annual health and welfare review for livestock. The advanced levels, and further standards will become available as the SFI develops.

It is understood that SFI payments will be paid in equal quarterly instalments, with the first payment being made 3 months after the agreement starts.

While the new ELMS might provide an opportunity to deliver DEFRA’s environmental objectives, it will also provide new challenges to farmers and land managers who will be required to adapt their enterprises. Farmers and land managers who have not already taken advantage of the existing Countryside Stewardship (CS) schemes may wish to do so now, in order to secure an agreement for 5 - 10 years.

The current schemes available are: • • • • •

Mid Tier Higher Tier Wildlife Offers Capital grants Protection and Infrastructure grants • Woodland support grants • Implementation Plan (PA1) and Feasibility Study (PA2) grants DEFRA have reviewed the payment rates for CS revenue options and supplements; with effect from 2022, some of these rates have increased by an average 30%. n

Kitty Campbell 07385 930 697 kitty.campbell@galbraithgroup.com

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Accurate insurance valuation - Six key considerations The dreaded insurance renewal comes around on an annual basis but it is becoming increasingly important to make sure that the following considerations are made to minimise the risks of being underinsured or even worse, not insured.

The following should be considered when renewing insurance for rural properties. With the rapidly increasing cost of building materials and the like, we have discovered that a few clients’ estates have been marginally underinsured as a result of inflation.

1. Average clause – The average clause appears in the small print of insurance policies and ultimately it allows insurers to pay less for any claims if you have underestimated, either deliberately or accidentally, the value of the contents of your property. For example, if you insure your contents at £25,000 but the actual value is £50,000 and you make a claim of £12,500 due to a burglary, this is 50% of your contents value but only 25% of their actual value. As you are underinsured by 50%, the insurers would then use the ‘average clause’ to only pay out 50% of the value of the claim being made as only half of the true value was insured, therefore only receiving £6,250.

2. Inflation – Insurers generally increase the sums insured in line with inflation, however due to the level of inflation and the rate at which it is increasing, it is difficult to accommodate inflation at the market rate. The construction sector is particularly volatile to changes in global prices; allowance should be made within the policy to accommodate the impact of inflation in building costs.

3. Correct sum insured – it is important that the building is insured for a sum that accurately reflects the market cost to replace the building. With the volatility in materials and general building costs at the moment we advise that Reinstatement Cost Assessments should, ideally, be undertaken at renewal and 6

certainly not index linked for more than three years.

4. Site conditions – it is important that the building is insured for a sum that accurately reflects the market cost to replace the building. With the volatility in materials and general building costs at the moment we advise that Reinstatement Cost Assessments should, ideally, be undertaken at renewal and certainly not index linked for more than three years.

5. Hazardous materials – The presence of hazardous materials, such as asbestos will significantly increase the costs of demolition, decontamination and disposal and therefore needs to be considered in the ‘sum insured’ for each property.

6. VAT – are you able to reclaim the VAT and, if not, is it covered under the policy? Are there provisions within the policy to cover your legal and professional fees?

Our rural team and building surveying team work in partnership to advise clients on reinstatement cost assessments and insurance policies for all types of rural property. Please call us if you would like to discuss your options. n

Kitty Campbell 07385 930 697 kitty.campbell@galbraithgroup.com

Farming in Protected Landscapes (FIPL) is a funding programme for one off projects for farmers and land managers within Protected Landscapes Areas of Outstanding Natural Beauty (AONB) and National Parks in England.

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Farming in protected landscapes The funding will support projects that achieve nature recovery, mitigate the impact of climate change, provide opportunities for people to discover and enjoy the landscape or support nature friendly, sustainable farm businesses.

The programme will be assessed by Local Assessment Panels, for projects over £5,000, against four outcomes to ensure that the projects meet at least one of the outcomes as well as providing value for money. The four themes for the outcomes are climate, nature, people and place. For example the programme might support restoring drystone walls, creating wader scrapes or ponds to support a variety of wildlife, promoting connectivity between habitats or conserving historic features on a farm such as traditional buildings. In addition to the four themes, each body (such as a National Park) may have additional objectives that are part of their landscape masterplan or specific initiatives.

Galbraith has been involved with applying for FIPL funding for gathering data and evidence to help inform conservation and farming practices in the form of a Natural Capital Assessment. The assessment serves as a baseline assessment and is a working document for management practices.

Projects that demonstrate collaboration between farmers or land managers are favourably looked upon by the Local Assessment Panel as the resulting evidence will benefit a wider landscape.

The programme runs until March 2024 with each Protected Landscape body being responsible for their applications and funding.

For example, in the Northumberland National Park a relevant project is able to apply for a maximum grant of £250,000 with the minimum grant being set at £2,000. The funding can be used to cover both capital and revenue spend. If the project has no

obvious commercial benefit then 100% of the eligible costs will be covered. Otherwise if there are commercial benefits, the grant funding will range from 40% to 80% depending upon the level of commercial benefit generated by the project.

The funding has been allocated until March 2024, therefore if the funding is not used up it is unlikely to be made available again. We would strongly advise that applications are submitted whilst the funding is available as it may be considered to be ‘filling the gap’ before the rollout of the Environmental Land Management Scheme (ELMS) which will include landscape recovery. n

Kitty Campbell 07385 930 697 kitty.campbell@galbraithgroup.com

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Funding the purchase of a small holding

Is it possible?

Many of my colleagues have written previously about the pros and cons of lotting rural properties in order for vendors to achieve maximum sale price, however funding can become challenging.

This often results in the farmhouse, farm buildings and a relatively compact area of land, for example up to 10acres, being made available as a separate lot in addition to further areas of bare land and woodland for example.

This is quite often a method used in order to achieve best sale price, however critical factors to consider include how is this approach from a lending perspective. We are often faced with a situation where potential purchasers make an offer subject to funding but are unable to find a financial institution which will back them in order to purchase such a property.

The reason for this is that the properties sometimes fall somewhere between a personal regulated mortgage backed up by a home report over the house and generally 1 to 2 acres, but short of the commercial lending criteria which is required in order to secure a business loan.

There are two main ways of approaching such a purchase in order to maximise acquisition opportunities, as follows.

Splitting titles It is possible to further split titles during the purchase of a property and this may allow a residential mortgage to be obtained over the principal residence or residential elements of

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the property with the remainder of the buildings and land being subject to either a commercial loan or paid for in cash. The benefits of obtaining a residential mortgage include generally a high loan to value ratio and more competitive margins when compared to a rural business loan. It is critical that a well-constructed home report is acquired and it should also be noted that there is considerable legal process involved in splitting titles which can be an additional cost.

AMC Rural Business Loan A rural business loan through the Agricultural Mortgage Corporation Plc (AMC) could be another route for funding, however there are a number of critical points which would need to be proven in order to evidence that the loan was for a business purpose.

The reason for this is that AMC only provide business loans and do not provide any form of personal lending.

There are a number of tick boxes which would need to be satisfied in order for AMC to consider lending.

Firstly, the property must be capable of generating an income, through some form of rural business with this income being capable of contributing towards the servicing of the loan. It is also critical that the security includes an area of agricultural land which makes up an absolute minimum of 60% of the area of the property. One of the main tests here is proving that the property is commercial and

capable of generating this income, quite often backed up by a business plan and budget, which are in turn stress-tested in order to demonstrate affordability.

When looking at the purchasing of smallholdings it is possible to take earned income into consideration when looking at serviceability, and this is looked at in conjunction with income and expenditure statements, evidence of income and financial statements evidencing the purchaser’s financial position.

In terms of loan-to-value, AMC are generally very conservative and a rural business loan, which is designed for non-standard agricultural businesses which are dependent on external income loan-to-value ratios are restricted to 50%. The balancing 50% would need to be made up of either cash or alternatively security over an unencumbered property which provides further equity. This can be owned by the applicants or indeed a connected third party.

Whilst the funding of the purchase of small holdings can be challenging, it is absolutely possible given the correct understanding and the correct advice at the time of purchase. n

Alistair Christie 07500 794 201 alistair.christie@galbraithgroup.com

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Thinking outside the bag Over the past year the agricultural sector has been faced with many cost increases, particularly the price of artificial fertiliser which has soared to unseen levels.

A rural business loan through the Agricultural Mortgage Corporation Plc (AMC) could be another route for funding.

Alistair Christie.

This price increase is having an effect on the majority of farm businesses across the country. To help manage costs, I believe there is no better time to explore other methods in order to reduce the requirement for artificial fertiliser.

A great starting point before growing any crop whether it is wheat, barley or grass is to soil sample the fields. Testing levels of phosphate, potash, magnesium and sulphur will give a better understanding of what additional nutrients are required.

Additionally, soil sampling identifies the pH level, the optimum level is 6.5-7, as soil which is outwith this range may start to lock up nutrients meaning that they cannot be utilised by the crop. It is common practice for farmers to test only their most productive fields in order to achieve the best yields, however by sampling poorer fields farmers will have a full picture to enable them to improve pH levels across their holding.

Field mapping is a more advanced method which allows variable rate spreading of nitrogen, phosphorus, potassium and lime to create a balance across fields by specially applying nutrients where required. This allows farmers to reduce the large variations of nutrients within their fields, achieving consistency.

As the price of artificial fertiliser continues to rise, this in turn

makes slurry and manure more valuable. Regular slurry testing is important to evaluate the requirement for artificial fertiliser.

Slurry analysis will vary according to an animal’s diet, therefore the nutrients being applied to land will also vary. Correctly timed application of slurry helps to reduce the loss of nutrients through run-off or leaching.

Slurry additives are another way of getting more from slurry. The addition of an additive to the slurry during storage helps to break down the solids faster allowing nutrients to be readily available when applied to crops.

Finally, clover is a legume which works well with many grass rotations, helping to reduce the artificial nitrogen requirement.

Studies have shown that clover can contribute as much as 100kg of nitrogen per hectare per year.

2022 brings many uncertainties for landowners as no one is able to predict whether crop prices will rise to cover the higher fertiliser costs. We encourage farmers to explore some of the options outlined above to help reduce expenditure during these unprecedented times. n

Mairi Macdonald 07342 053 318 mairi.macdonald@galbraithgroup.com 9

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Guest article

In December 2018, The Morris family made the decision to move from Olrig Farm, Caithness to Logie Farm, Fife.

Andrew Morris, who is from a long line of farmers’ moved alongside his wife Joanna, their three children and Andrew’s parents.

Previously running a herd of cattle at Olrig, the family made the decision to downscale the herd as a result of the move and today they are running 7 suckler cows, with 550 breeding ewes and an arable operation extending to 400 acres. The arable operation is based around Winter Wheat, Spring Barley and Spring Oats with around 100 acres per year let out to local vegetable growers.

From December 2018 onwards the family have invested significantly in over 2000 metres of new fencing, the erection of a new house for Andrew’s parents and they have entered into an environmental scheme with 1000 metres of new hedging a key part of the project. They have also commenced a new reseeding programme to improve grassland swards and reduce the reliance on bought-in concentrates.

Over the last 3.5 years there has been many challenges from Brexit to Covid-19 and now the Ukraine crisis. Markets have fluctuated significantly over this period as well as input costs.

A few months after the move to Logie the business decided that a further enterprise was required to spread out 10

risk and reduce the reliance on direct farming income. Consequently ‘The Snug at Logie Farm’ was founded.

The Snug is a 1 acre holiday pod site with dramatic hillside views over the River Tay. There are 2 luxury 5 star pods which are nestled into the hillside, complete with hot tubs, fire pits and the breath taking views over the River Tay and the hills to the North.

The Snug offers a private, unique, luxury “get away from it all experience”. The perfect combination of modern comforts but located in a rural, off-grid countryside setting. Each snug sleeps two people with an infant upon request, with one of the Pod’s Dog friendly.

The Snug opened at the end of October 2021 and has been going from strength to strength, with the business only advertising through social media platforms at the moment. Bookings have been consistent and regular with a strong level of bookings for the remainder of 2022. The Hot Tubs and the elevated decking are one of the main attractions to the Pod’s.

Each snug is themed and has links to the salmon bothies scattered on the shore line of Logie farm and other neighbouring farms. Included in the price are delicious breakfasts and an abundance of information for guests on local places to eat and visit.

The Snug at Logie Farm Overall The Snug has been a great success offering an alternative income stream to the business. The largest challenge was Covid-19 through the building and operational phase, however as restrictions ease and normality returns running the Snug has been much easier and simpler.

Galbraith offer the business ongoing consultancy advice and have assisted with the feasibility and financial planning of the business. As businesses review the ongoing subsidy position and potential shift to environmental based measures, undertaking and implementing diversification measures such as the Snug could be a consideration for many farming businesses.

Further information on The Snug can be found on their website; www.logiefarmsnug.co.uk

Andrew Sanderson 01738 456 071 andrew.sanderson@galbraithgroup.com

Martin Rennie 07899 923 138 martin.rennie@galbraithgroup.com

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Urban fringe access There are many opportunities for estates on the urban fringe, in terms of development and accessibility, however with this comes some problems.

The closer estates are to dense populations, the greater the issues with fly tipping and public access.

The land on the fringe is often left as scrub land, to almost act like a buffer between urban land use and more intensive agricultural practices and is therefore not checked as regularly by farm workers for example.

These issues appear to have worsened since the Covid pandemic, for many reasons. With many waste and recycling centres being closed during lockdowns, it has caused a phenomenal increase in fly tipping. This can have a detrimental effect on estates, as if the fly tipping is on private land, it is the landowners responsibility to clear this. This can mean that estates are having to use their own vehicles to remove sometimes large household items, such as washing machines and ovens, which can incur a charge for disposal. Private road ends and field entrances are usually the most common spot for this to occur, meaning that not only does it take farmers and landowners time and money to clear, it also detracts from them being able to perform their standard day to day work.

There have been many methods adopted by farmers and landowners to help reduce the amount of fly tipping taking place, including

locking gates and blocking field access with logs and other large objects.

The increase in people taking up walking during the periods of lockdown, has also caused further issues with rubbish on the ruralurban fringe with people littering smaller items such as plastic bottles and wrappers on farmland. This increased footfall has also resulted in additional issues such as damage to crops, worrying livestock, and gates being left open, causing livestock to get out onto highways.

Within Scotland, due to the right to roam, there are few options for landowners to mitigate the effects of increased public access.. It appears to farmers and landowners that the only way to help reduce this, is to educate people, by erecting signs along common areas of access. n

Holly Scott 07917 220 784 holly.scott@galbraithgroup.com

Anna Fisher 07775 407 194 anna.fisher@galbraithgroup.com

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Tourism, leisure, farming & forestry all support strong market for rural property The overriding characteristic of Scotland’s rural property market is the current imbalance between supply and demand.

Farms, agricultural land, and rural property are all attracting considerable interest but there is a shortage of property to meet the demand. The number of acres of land on the market in 2021 was approximately 40 per cent lower than in 2020.

Farmland The vast majority of land holdings, whether a working farm, rural property or a smallholding are either selling at a competitive closing date or else an offer is made and accepted before the property is publicised on the open market.

Productive prime arable land remains highly sought after, with demand driven by existing agricultural businesses in the local vicinity. Parts of East Lothian, Perthshire and Fife have all seen an increase in prices being achieved for prime arable land but there is often significant variation within the same area.

The underpinning market fundamentals remain similar to

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previous years, in terms of lack of supply and relatively low costs of borrowing but there is now a perceived long-term positive outlook for agricultural land. However a continued interest in land for forestry and natural capital ventures from a variety of buyers is creating a distortion in the land market. The significant shift in the number of lifestyle buyers coming into the market following Covid, has improved interest in the smaller holdings and land areas particularly if local authorities have a favourable view of rural development, and depending on the location and the local planning rules in place.

These factors have combined to support higher prices overall and have led to some exceptional premiums being paid in some circumstances especially for the least and most productive types of land.

Forestry and natural capital Some of the more marginal farms and estates appeal to parties looking

to use the land for afforestation purposes. This has been a theme of the market over the last 24 months with little sign of reduced demand for land for forestry.

Aside from mainstream farming businesses, there is now significant demand for land for afforestation purposes and from buyers with ‘natural capital’ interests.

This trend has contributed to the significant increase in price for land which is not suitable for crops over the past 24 months, with values of £3,000-£7,000 per acre being achieved for areas of hill ground and marginal permanent pasture. Again, pricing varies significantly between sites. This section of the market is predominantly underpinned by forestry investors and institutions looking to make a return on land for planting purposes in the longer term.

There are a number of key factors which will determine whether a plot is suitable for tree planting, such as the presence of deep peat, statutory

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designations (Sites of Special Scientific Interest, Scheduled Monuments and Special Protection Areas for example) and soil depth.

If more commercial planting is being considered, ease of access for planting and harvesting timber is also a material consideration which will influence demand and consequently pricing.

Amenity, Business and Leisure Interests For some buyers, the need for a property as a family home is now only part of their search criteria.

There is a growing segment of the market interested in rural property for leisure, business or amenity use.

In Scotland it is often the more remote and scenic areas of the country that are the most in demand for amenity and tourism use.

Duncan Barrie.

Agricultural properties by nature often present the potential for a variety of alternative uses, as long as planning permission/change of use consents can be obtained.

Rural tourism businesses can, if marketed and designed correctly, generate good returns for buyers or investors.

Following the pandemic there has been a growing interest in smaller farms and bare land from amenity, leisure and rural tourism buyers. In addition, since the start of the pandemic, some larger landholdings of up to 300 acres plus have attracted interest from buyers looking to create ‘wellbeing’ retreats, which can provide direct access to rural space and the associated mental health benefits.

In addition, some buyers are looking to improve their own lifestyle and general situation in relation to rural surroundings, while some investors are also looking at properties with this type of business use in mind.

In Scotland it is often the more remote and scenic areas of the country that are the most in demand for amenity and tourism use, particularly if they are within close proximity to the coast, established areas of water, and

hills or larger designated areas such national parks. We have recently launched Gart Farm by Callander which has attracted a significant level of interest from a variety of different parties looking to utilise the site for recreational, amenity and business purposes.

However in some cases buyers do require a level of proximity to larger populations and easy access to transport hubs to ensure good footfall for a future rural business, especially if this use requires regular public attendance such as farm shop with cafe, recreational activities or other well-being type projects.

Strong market likely to be maintained For the remainder of this year, most indications suggest that the market will remain broadly the same. There remains a significant lack of properties for sale to satisfy the strong demand, which is helping to drive competition between buyers and boosting prices.

Further interest rate rises could erode some buyer’s borrowing power in the longer term, but there is still a significant level of money in the marketplace chasing too few suitable properties.

The significant flexibility offered by farms and rural property continues to attract a wide variety of buyers. We expect that more farmers close to retirement may decide to sell given the strong market, especially due to significant demand from natural capital interests, but also having taken time to reflect over the periods of lockdown during 2020 and 2021, and increased pressures on margins in terms of input costs and the likelihood of further instability within the wider global economy. n

Duncan Barrie 07766 250 798 duncan.barrie@galbraithgroup.com

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Lifestyle properties that have it all The desire for a better lifestyle has been a dream for many people for some years, reflected by the popularity of numerous television programmes such as Escape to the Country and others.

Over the past two years this distant dream has become a determined ambition, and we have seen an extraordinary boom in those actively seeking to move to a rural property.

The national lockdown at the start of 2020 allowed people to reflect on their home setting, and in some cases their whole lifestyle, with many completely re-evaluating their priorities. The ability to work from home was a novel concept for many industry sectors, and for the first time people began to think that the daily commute might be a thing of the past. This freed them to search for rural property that previously would have been too remote to consider.

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Dumfries and Galloway has benefitted from this shift as it encapsulates many aspects of the rural dream in one region – with superb coastlines, historic villages, forests and picturesque lowland hill settings.

this as the ‘Pony Paddock Premium’ and land can achieve anything from £8,000 to £15,000 per acre. This phenomenon has been well supported by our sales over the last two years.

Property in the region offers excellent value for money compared with other parts of the UK.

The ideal smallholding would also include an attractive house and garden, a range of traditional outbuildings, or more modern general purpose sheds. Premiums paid range from between 5 per cent to 30 per cent over the asking price.

Smallholdings generate particularly strong interest from potential purchasers for the range of lifestyle opportunities they offer.

A property with between 2 and 20 acres of land can expect to attract a premium above and beyond its value as part of a larger unit – we refer to

The recent sale of Slaethorn Croft demonstrates the strength of the demand. Slaethorn is a delightful rural smallholding close to Dumfries on a quiet country lane, providing the ideal

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| Rural Matters | Summer 2022 mix of appealing house, land of about 7.9 acres including two pony paddocks, a range of outbuildings including stables, and a traditional workshop. The property was marketed for offers over £370,000 in September 2021, generating 30 viewings and 9 notes of interest and was successfully sold at a closing date, well in excess of the asking price.

Smallholdings come in many different forms, often catering to the specific vision of the purchaser, and it is possible to identify the ‘tribes’ who will be interested in a smallholding for their own lifestyle dream.

The first of these tribes is ‘The Good Life’ group – opting for selfsufficiency, such as growing their own vegetables, keeping a few chickens or sheep, perhaps planting fruit trees or installing beehives - think Richard Briers and Felicity Kendal.

Equestrian buyers (the ‘Horse & Hounds’ tribe) are also a defined group very much on the rise – in addition to the paddocks their wishlist includes stables, a fenced riding arena, and ideally in a situation where the surrounding area provides opportunities for hacking. Demand for smallholdings from riding enthusiasts has been a notable trend in Dumfries & Galloway and many other parts of Scotland.

A further defined tribe are the gardening enthusiasts (the ‘Monty

Dons’) – their priorities are generally an area of garden adjacent to the main house, either with an established garden or space to create one, and perhaps a larger area with woodland or wildlife-friendly habitat. The location must be peaceful and private.

Creative types (the ‘First Novels’) are those pursuing artistic projects such as painting or creative writing. Privacy and a peaceful location are a must, a view is a definite bonus and perhaps the space to create a writing hut with an inspiring outlook.

The ‘Tourism Potential’ tribe are those looking towards secondary accommodation, or adding a small camping or glamping site, or shepherd’s hut for the potential to create an income stream from the property. Location is key for these buyers, with several areas of Dumfries & Galloway recognized as tourism hotspots.

The retired farmer is another defined group (the ‘Love to Farm’ tribe) for whom smallholdings have great appeal. They may have retired from the business but they are still keen on keeping livestock, just on a much smaller scale.

The ‘Savvy Neighbour’ is another group of buyers - existing farm businesses looking to expand their acreage to keep up with the ever changing agricultural sector. It has been a common trend for farmers to buy an additional farm, often

neighbouring, for the purposes of expanding their enterprise and creating economies of scale. With only the land required, the farmhouse and steading are often surplus to requirements. Given the ‘pony paddock premium’ we advise these clients to spare a few acres from the farm they are acquiring to create a smallholding, to be sold separately.

The property market will fluctuate in the coming months and years, in common with any other market.

However the demand for properties that offer the smallholding lifestyle is part of a significant and longer-lasting trend.

Unlike other residential properties, smallholdings tend to be owned for a long period of time. When this is paired with the high of the post-Covid property market, there has never been a better time to sell, and a clear reason to act quickly if you are purchasing. n

Katie Marr 07824 435 087 katie.marr@galbraithgroup.com

Aaron Edgar 07899 877 737 aaron.edgar@galbraithgroup.com

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Full steam ahead for the electrification of Scotland’s rail network?

Whether it’s the switch to an electric vehicle, electric heating urged for our homes or the growing interests in electric motorsports, never has there been a greater focus on ‘going electric’.

With transport being Scotland’s biggest emitting sector, accounting for nearly 36% of greenhouse gas emissions in 20181, the Scottish Government published the Rail Services Decarbonisation Action Plan in July 2020. This sets out ambitious plans to electrify more of the rail network and remove diesel from passenger trains over the next 15 to 25 years.

The Action Plan is considered a fundamental aspect of achieving NetZero by 2045 by removing diesel trains and encouraging travellers to ditch their cars and hit the rails, especially now with the increase in fuel prices and the recent report from the UN’s Intergovernmental Panel on Climate Change (IPCC) which states that carbon emissions need to peak 16

within three years, and fall rapidly after that. With that in mind, Holyrood is committed to a substantial rolling programme of electrification that will bring economic, social and environmental benefits, but the roll-out is no small task.

Alongside the electrification of the infrastructure, two other green technologies that are likely to be well enough established to make an impact in the future are hydrogen, and battery-powered trains. Whilst these are currently expensive and limited in power output and performance, they are flexible and can be used independently or in conjunction with ‘discontinuous electrification’ – leaving gaps in overhead line equipment where there are non-compliant structures, instead

using on-board energy storage systems to power trains across these gaps.

With some 1,616km of track to be electrified and physical and geographical constraints to navigate, there is light at the end of the tunnel for the Scottish Government’s ambitious target, but the challenge of reaching it cannot be overlooked.

Currently, our surveyors are seeing increased approaches from Network Rail and other delivery partners seeking to collect soil samples and ground data from landowners adjacent to the existing rail networks that are to be electrified to make sure the land is suitable to support the necessary poles and cables. It is anticipated that Network Rail will also require compounds along the lengths

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| Rural Matters | Summer 2022 of the track to store machinery and accommodate welfare facilities. Landowners and managers may be entitled to a rent should a compound be installed on their land.

Whilst the end goal is clear, it is important to ensure access, land right terms and temporary occupation agreements are agreed to protect the landowner’s position from the outset. Any landowners who are approached by Network Rail will be entitled to compensation for reasonable damages and losses incurred as part of the works and we would recommend that a pre-entry record of condition is carried out prior to the commencement of the works to assist with compensation claims.

If you are either a landowner or occupier who has been approached in relation to railway upgrade works, please do get in touch with your local Galbraith office and we would be happy to assist. n 1

Source: www.netzeronation.scot /take-action/public-transport

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

Rachel Russell 07884 657 219 rachel.russell@galbraithgroup.com

Map of decarbonised rail network in Scotland, 2035 The map shows the rail network in Scotland; as there are no rail lines on the islands they are not shown.

Electrified network 1,616 km (single track km) to be electrified. Sections of route could potentially include discontinuous electrification.

Electrification of some freight-only lines may be subject to review.

Alternative traction transition solution, e.g. partial electrification and/or the use of alternative technology prior to electrification.

Alternative traction permanent solution, i.e. the use of battery or alternative traction.

Alongside the electrification of the infrastructure, two other green technologies that are likely to be well enough established to make an impact in the future are hydrogen, and battery-powered trains.

Rachel Russell.

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A permanent change for residential tenancies The Coronavirus (Recovery and Reform) (Scotland) Bill is currently passing through parliament and will, if enacted, make the temporary changes that were brought in by the Coronavirus (Scotland) Act 2020 in the wake of the pandemic, permanent.

The Coronavirus (Scotland) Act 2020 came into force on 7th April 2020, signalling significant changes to housing legislation in Scotland.

These changes applied to Private Residential, Assured and Short Assured Tenancies alike, increasing most of the notice periods for the repossession of residential tenanted property to up to 6 months and amending all grounds for eviction to discretionary, as opposed to mandatory. In effect, these changes meant that any claim by a landlord for possession had to be determined by the First Tier Tribunal and an eviction would be only granted by reference to ‘reasonableness’. Landlords were additionally required to follow ‘preaction’ protocols from 30th September 2020, where a tenant was in rent arrears, which included the provision of clear information on a potential repayment plan and other forms of financial support to the tenant, such as the Tenant Hardship Loan Fund. This communication would then be looked at as evidence of ‘reasonableness’ when the Tribunal was assessing the case.

These legislative changes were initially brought in in the early stages of the Coronavirus, when the true effects of the pandemic were yet unknown. The rationale was to prevent homelessness, amidst concerns that some unemployed or self-employed 18

tenants may struggle to pay their rent.

Notice periods to terminate residential tenancies returned to their original form from 30th March 2022 (two months for Short Assured Tenancies, 28-84 days for Private Residential Tenancies), however the pre-action protocols remain in place, and all grounds to terminate remain discretionary, having been extended to 30th September 2022 by the Coronavirus (Scotland) Acts (Amendment of Expiry Dates) Regulations 2022. These changes will become permanent for all residential leases after this date if enacted by Part 4 of the Coronavirus (Recovery and Reform) (Scotland) Bill. The principal change here is in relation to Short Assured Tenancies, where prior to the coronavirus, tenancies could be brought to an end at the end of the fixed term on the mandatory “no fault” ground. Under the proposed legislation, all actions for repossession would permanently require First Tier Tribunal determination.

The justification given by the Scottish Government for these changes to be made permanent are that the pandemic has caused a reduction in household incomes and the changes brought in under the 2020 Act made the system more equitable, despite there not having been a sufficient review period to gauge this. In reality, Patrick Harvie has stated that only 6

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per cent of the (£10,000,000) Tenant Hardship Loan Fund had been awarded in November 2021, to 233 households, and in the last year 94 per cent of eviction applications that proceeded to the Tribunal, resulted in an order being granted. One might question, if 94 per cent of cases were awarded by the Tribunal, whether the referral of all applications is an efficient use of judicial resources.

Presumably there will be lengthy delays in the judicial process, and therefore to landlords realising vacant possession, extending beyond the original notice periods, all of which will require sufficient public (and private) funding.

Short Term Lets Legislation – What are the implications?

Legislation was passed at the beginning of 2022 meaning that all short-term let properties will require a licence.

Understandably there are concerns that this will negatively impact the property market, causing a shortage in rental housing, with both lenders and landlords alike unwilling to engage and invest in residential property when vacant possession cannot be realised, entirely reliant upon the First Tier Tribunal and the ‘reasonableness’ test. A housing shortage would also have the effect of driving up market rents, detrimental to the tenants that the legislation is intending to protect. A comparison may be drawn with the legislative changes brought in in relation to agricultural tenancies, where it is widely felt that the security of tenure now afforded to agricultural tenants has caused higher rents and a shortage of available land to rent on a longer term.

The Bill is currently in Stage 1, where its provisions and the views submitted in response to its provisions, are under consideration.

Membership bodies such as Scottish Land & Estates continue to lobby against its implementation and we await what form, if any, the final piece of legislation will take. However, in addition to the upcoming introduction of minimum EPC regulations, the new proposed housing standard contained within the Scottish Government’s ‘Housing to 2040’ strategy, and the rent control measures recommended in the most recent Scottish government consultation paper ‘A New Deal for Tenants’, there is a continual and very clear shift in policy against landlords.

As a landlord or managing agent of residential property, these changes require careful consideration as to future management strategy and any long term investment in residential property. n

Ailsa Baird 07917 464 262 ailsa.baird@galbraithgroup.com

This legislation is perhaps somewhat draconian being a response by government to address a relatively small number of nuisance instances arising out of so-called ‘party flats’ in the capital.

Where a self-catering enterprise has been operating for a period greater than 10 years it should be possible to apply to the Council for a certificate of lawful use rather than a formal planning application.

However, the resulting legislation requires all Local Authorities to establish a short term let licensing scheme by 1st October 2022, and existing hosts and operators will have until 1 April 2023 to apply for a licence. Licenses will be granted for an initial period of up to three years, but the costs are presently unclear and it is understood fees will be at the discretion of Councils.

Many landowners have self-catering as part of their wider rural business and it will be important for them to ensure that such is appropriately licensed.

Whilst the self-catering and tourism sector considers the legislation to be Ill-conceived and unnecessary, it is now a matter of law and it is important that owners and operators of short term rental accommodation understand its implications.

In order to operate within the law it will be necessary to obtain formal planning permission in order to be eligible for the necessary license.

Galbraith have been following the progress of this legislation and previously issued briefing notes whilst the legislation was under review. Now the law has been passed we are actively assisting clients in getting their affairs in order in light of the licensing deadline in 12 months time. If you wish to discuss how this legislation might impact your business and what you may need to do, please contact Nicola MacGruer. n

Nicola MacGruer 07899 914 865 nicola.macgruer@galbraithgroup.com 19

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Scottish tea

Going from strength to strength!

Two years ago, I wrote of our Tea Garden in South West Scotland, a follow up article from the original back in 2017 when we embarked on this venture.

walk in the park compared with the logistical conundrums faced by those living in the Highlands and Islands, some of whom were relying on the services of Calmac and Northlink and so time constrained by factors outwith their control. However, all of the leaf arrived in good condition and the complicated tea making process started, taking that afternoon and the next day to make, with Beverly watching the leaf drying processes in much the same way as a chef will watch a soufflé rise – waiting for the perfect moment.

My first article contained the barely suppressed excitement of one setting out on a voyage into new and unchartered waters, with a nod to the fact that it might be a long road to the first cuppa.

The second article three years on, was written with slightly more circumspection, but where there is life there is hope, and our tea plants, while not resembling the terraces of Ceylon, were still alive and slowly growing.

Added to this hope, was our membership of the Association of Scottish Tea Producers; Tea Scotland, they say that a problem shared is a problem halved, and it has been both inspiring and comforting to come through this journey with others from all over Scotland, who have experienced troubles and triumphs to the same degree as us. The outcome of Tea Scotland’s journey, is that ten of our members, determined to have that first taste of home grown tea, but realising that this would not be possible on an individual basis due to the quantities required, bought their leaf together to make Scottish grown tea with impeccable provenance.

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Tea Scotland applied for, and were awarded grant funding by the Regional Food Fund (supported by the Scottish Government.) This provided the opportunity to undertake the development process required to achieve the best possible product, while also affording some of our members with first hand experience in making tea. Making this all possible was Beverly Wainwright, interviewed in my last article, and pioneer of the Scottish Tea Factory in Comrie.

Beverly guided us through this process, which was somewhat fraught for reasons which I will expand on shortly, from start to finish, with her passion and knowledge of the product giving us the impetus, and direction which we needed.

The main issue with making this blend, was that for the tea to be of the highest standard, it would have to be picked fresh, and the ‘tea making’ process commenced within the shortest time possible. For us, this meant a 6.30am start to pick and prep the leaves before the school run and working day started, and for one of us to take a fast car north with the precious cargo. However, this was a

The tea made, we then had to consider branding, packaging and a market, and were greatly assisted by the grant funding which enabled us to have a website designed for Tea Scotland https://tea.scot/, some branding developed and our first tea on sale for Christmas 2021. We called this, our first tea, ‘The Gathering’, and I speak on behalf of all those involved, that it was a triumph for all of us, a delicate black tea, golden in hue, and pure in flavour; and adding to the satisfaction which habitually comes with a mug of tea, was the knowledge that it was all grown and made in our gardens in the UK. ‘The Gathering’ was marketed via social media and sold out online within three days, while a second tea which we developed in a very different way involving wok roasting, produced a really original and delicious flavoured black tea, which we named ‘Blackhouse’, and which was sold exclusively to a Michelin starred hotel in Scotland.

We have a way to go before we could fulfil the Brits’ infamous desire for a cuppa, but the triumph and satisfaction of this journey and finally producing an end product has been immense. n

Poppy Baggott 07557 973 220 poppy.baggott@galbraithgroup.com

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Training endurance horses Endurance Horse Riding is a timed event where competitors navigate a set route with their horse at a minimum speed.

We called this, our first tea, ‘The Gathering’, and I speak on behalf of all those involved, that it was a triumph for all of us, a delicate black tea, golden in hue, and pure in flavour...

Poppy Baggott.

Competitions range from 30km to 160km in a day and horses must pass strict veterinary inspections every 30-40km as well as having a rest to recover and refuel.

Routes are marked and riders are provided with a map that they must follow. The sport could be described as orienteering crossed with formula one but on horseback!

Riders have to take into account the weather conditions, terrain, and their horse’s ability on the day while judging the speed they ride at, this becomes particularly important during races where riders are competing to win while maintaining the highest standard of horse welfare. Racing horses over 80 to 160km is very technical and tactical and takes all the rider’s concentration and skill. It's a very tough sport, I have been unlucky enough to cross the line in first place after 160km only to be eliminated at the post-race vetting as the horse was slightly stiff, but you learn from these experiences and they help prepare you for the next race.

Training for a 160km endurance ride takes up to four years as you prepare a horse through multiple seasons of competition. It takes a combination of long-distance training rides, cardiovascular training, and strength and conditioning exercises. Training starts in the early spring, meaning some soggy evenings after work getting those miles in.

As the year progresses the training intensifies and horses are asked to go further and work harder, all to ensure they are as fully prepared for the demands of a big race. Riders must also be physically fit as an unfit or tired rider negatively affects a horse’s performance, so not only do you have to find time to train an equine athlete, you have to train yourself too. At home, I currently have one horse in training for myself, alongside my retired horse who has been one of the most successful horses in Scotland throughout his career, and a youngster who I hope will take me to an International level competition in time.

At the top level, a 160km endurance race can take anywhere from 10 to 24 hours to complete depending on the terrain, weather, and the horse underneath you. Completing this length of course in one day with a horse is certainly a superb feeling and I have been lucky enough to compete all across Britain as well as in South Africa and Australia. In the UK there are national competitions run by governing bodies in Scotland, England and Wales, and Ireland as well as international competitions which attract riders from Europe. n

Iain Paterson 07899 877 727 iain.paterson@galbraithgroup.com 21

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Guest article

Leading the way on lead In February 2020 nine of the main shooting and countryside organisations announced that they wanted to phase out the use of lead shot by 2025, and urged their members to start switching, while also protecting the growing market for game meat.

These organisations have also called for an end to the use of single-use plastics in shotgun cartridges.

There are already bans on the use of lead shot in the UK and EU in wetlands with total bans in Denmark and the Netherlands. The use of lead ammunition in England is restricted by the Environmental Protection (Restriction on the use of Lead Ammunition) (England) Regulations 1999. (Similar existing regulations apply in Wales) These Regulations prohibit the use of lead ammunition on all foreshores in England, in or over specified SSSIs (predominately wetlands) and for the shooting of all ducks and geese, coot and moorhen. While in Scotland and Northern Ireland, it is banned in wetlands, where a more restrictive definition of wetlands is applied compared with the EU ban introduced in 2021.

Scientists from the University of Cambridge have been undertaking a study on the use of lead shot and their study last year obtained 336 whole birds or oven-ready prepared carcasses from 70 businesses of various types, from this they identified that 99.5% of

recovered pheasants contained lead shot. This snapshot would suggest there needs to be a more concerted effort to transition away from lead shot before 2025.

Cartridge manufacturers have reservations over the time frame without having considerable support from the industry and this would appear to be an ongoing discussion.

In 2021 the UK Government announced that lead ammunition could be phased out under government plans to help protect wildlife and nature. They have stated that large volumes of lead ammunition is discharged every year over the countryside, causing harm to the environment, wildlife and people. The government is now considering a ban under the UK’s new chemical regulation system – UK REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) – and has requested an official review of the evidence to begin with a public consultation in due course.

The organisations are collectively calling for the support of shooters, noting that the change will benefit wildlife and the environment. n

Neil Wright 07920 725 814 neil.wright@galbraithgroup.com

Project Laxford is a partnership between Grosvenor’s Reay Forest Estate and the Atlantic Salmon Trust, supported by Marine Scotland Science and the West Sutherland Fisheries Trust.

The River Laxford is one of the most remote, yet productive, rivers in the Scottish Highlands, but in recent years its wild Atlantic salmon populations have seen a rapid decline. This mirrors the situation right across the native range of this iconic fish.

Salmon have a complex lifecycle with stages in the freshwater, transitional and marine environment. Research suggests that the key driver for the decline in populations relates to changes in the marine environment, specifically climate change. However, freshwater factors are also believed to have a significant impact on the survival of salmon at sea.

Recent studies suggest that bigger smolts have better marine survival, meaning that ‘bigger is better’ when it comes to body size. With management options in the ocean limited, restoration efforts should therefore concentrate on freshwater life-stages, with aim of maximising the number of healthy wild salmon smolts going to sea from our rivers.

The overall aim of Project Laxford is to identify and understand the primary factors, or pressures, limiting wild Atlantic salmon and sea trout production in the River Laxford. This will help to inform the delivery of targeted management actions to restore the catchment and provide the best possible conditions for salmon and sea trout to thrive.

The first stage in the process is the completion of a desk based catchment audit. This aims to bring together existing information relating to the catchment to inform an understanding of its current condition, capacity to produce salmon and trout, key limiting factors and where to prioritise restoration efforts for best effect.

On completion of the catchment audit, the partnership will develop a detailed three-year catchment restoration programme. This will focus on elements of native riparian woodland creation and addition of large woody debris.

Historically the land beside the Laxford would have been extensively wooded with native tree species. This provides shading, nutrient input, refuge for fish and invertebrates in root structures, bank

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Project Laxford stablisation, flood attenuation and water quality benefits. Woody debris would have been a common feature its river channels, providing cover for fish and increasing the diversity of channel features. Better conditions for the juvenile fish will hopefully maximise numbers of healthy wild smolts leaving the Laxford.

The effectiveness of these management actions will be assessed over time using robust science and up-to-date monitoring techniques. The catchment will be equipped with fish telemetry equipment funded by Marine Scotland Science. The installation of four passive integrated transponder (PIT) tag arrays at strategic locations around the catchment will provide recognition of previously tagged fish. Together with biological information collected at the point of tagging the fish, will help us to determine the contribution made by different parts of the catchment and cohorts of fish, together with their freshwater and marine survival.

A Marine Scotland Science funded ARIS (Adaptive Resolution Imaging Software) fish counter will be installed in the vicinity of Laxford Bridge on the lower River Laxford. This will permit a much more accurate assessment of the number of returning adult salmon (spawners) than is currently the case.

This type of counter uses a very high definition fixed beam sonar to record an image of passing fish. Image recognition

software provides identification of and various parameters relating to the fish.

At present we are reliant on rod catch data which has significant limitations.

This new infrastructure, combined with enhanced juvenile salmonid and wider environmental monitoring (e.g. water temperature, environmental DNA and macro-invertebrate sampling) will allow us to closely monitor how salmon and sea trout populations, together with the wider ecology and environments within which they live, respond to the restoration of the Laxford catchment.

The Laxford will become what is known and an ‘index’ or ‘monitored’ river, potentially linking in with a network of other monitored rivers ranging from the south of England to the north-east coast of Iceland.

Although the primary driver for Project Laxford is the conservation of wild Atlantic salmon populations, there is an inextricable link between salmon and the health of the wider aquatic and riparian environment.

The salmon is well known for its dynamic migrations between the freshwater and marine environments. They fight their way back to the same area of river where they were born and are extremely sensitive to changes in water quality, quantity and the degradation of riverine and riparian habitat. They bring with them significant amounts of marine nutrients which enrich what are often nutrient poor habitats, benefiting a wide

range of plants and animals. Their presence in a watercourse is widely recognised as an indicator of a healthy environment and has benefits for a wide range of other species.

Project Laxford also has the potential to significantly improve the wider natural capital value of the Laxford catchment, enhancing a wide range of ecosystem services. From a cultural perspective, salmon have represented a valuable resource for fisheries for centuries. In more recent times, salmon angling has become a popular sport, making a significant contribution to the local rural economy. The potential ecosystem benefits of this catchment restoration for salmon extend much further than this, for example natural flood attenuation and carbon sequestration by riparian woodlands, carbon storage via peatland restoration, the provision of cool, clean water and even the subtle health and wellbeing benefits that humans derive from visiting a pristine natural environment.

Going forward, as a monitored index river system, the Laxford has the potential to provide an ideal testbed for developing the science and tools required for the identification of critical natural capital and the quantification of its ecosystem service values. n

Chris Conroy Atlantic Salmon Trust 23

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Scottish estate market

Demand significantly outstripping supply Scotland is world famous for its outstanding beauty, open spaces, quiet corners and highly varied countryside, offering a bounty of outdoor activity opportunities, not to mention the numerous business opportunities in farming, forestry, leisure, tourism and traditional field sports which are generated from this rural environment and contribute significantly to the economy.

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They are also some of the principal reasons why there continues to be huge demand to buy a Scottish estate.

Over the last three years we have seen a notable change, not only in the increasing number of buyers but also the type of buyers for these iconic properties. We continue to see the traditional estate buyer with such interests as grouse shooting, stalking and fishing being some of their principal reasons for buying an estate.

However the ever-increasing desire by many to offset carbon footprints and the very tangible need by businesses and corporations to meet “green” goals has meant the estate buyer now includes corporations, institutions, investment houses and business owners, as well as private individuals, all with their own personal environmental motivations and interests.

The rise in value of estates with potential to embrace delivery of ecosystem services has been fascinating to observe.

Emma Chalmers.

As a firm, this changing market has been particularly marked over the last three years. For example, in 2019 we brought to the market Auchavan Estate, an idyllic estate, lying within the iconic Angus Glens and offering the usual field sporting interests together with a number of houses, hill farming opportunities and forestry. Those interested in buying were principally traditionally-based with one or two more conservation/re-wilding orientated buyers. Ultimately, it was a ‘traditional’ buyer who acquired the property. However, a year later Kinrara Estate in Inverness-shire was brought to the market and there was a much greater range of buyers looking to invest in woodland creation potential and associated natural capital outputs.

We also arranged the sale of an extensive stock hill farm and without exception, all the interest was in the potential to manage the Natural Capital. This increased demand from a deeper pool of purchasers has meant values have gone up.

This market intel is interestingly reflected by the recent report from the Scottish Land Commission “Land Market Insights Report - April 2022” which demonstrated increased demand and investor interest.

However, it must not be thought that the more traditional buyer has disappeared, that is very much not the case with buyers, not only based in Scotland and the wider UK, but also internationally keen to purchase an estate in Scotland, driven by their appreciation of the notable scenery, the great amenity and history, together with the traditional sporting interests of stalking, fishing and shooting. Also, it is important that communities also aspire to acquire land and where they have registered an interest, by law, they have the first option to buy.

Continued investment in the Scottish

Land fund enables these transactions to continue.

The diverse range of buyers with a broader base of interests/ outcomes from the land, has led to significantly greater demand, particularly when the estates for sale offer green potential such as woodland creation, peatland restoration, conservation/biodiversity and natural capital opportunities. Of course not all land is suitable for tree planting, or offers degraded peat but equally not all buyers are looking to singularly follow a green agenda or a sporting focus. There are equally buyers keen to knit in all such elements and perhaps take a more balanced approach; retain farming interests, continue with the sporting interests currently enjoyed whilst introducing some native or productive woodlands for a future income, potentially installing a hydro scheme, turbines or maybe generating further income from holiday letting units or even a degree of development such as the more bespoke ideas of a distillery, holiday tree houses or wedding venue. Thus such an acquisition can be seen as a “win/win” investment as it can allow Environmental and Social Governance (ESG) requirements to be met whilst providing a financial return from other parts of the estate. Indeed we have just successfully acted for a client in purchasing a traditional sporting estate which is continuing to be managed as such but with investment into the properties, expanding conservation elements including hedgerow establishment and the intention to install a hydro scheme.

Demand for estates and upland farms is very much outstripping supply resulting in the much talked about increase in their capital values. Consequently valuing and how we market estates is also now changing. As a firm, who have specialised in the sales, valuations and management of estates for many decades we consider this changing and evolving market in the Scottish estate is at a pivotal point.

The rise in value of estates with potential to embrace delivery of ecosystem services has been fascinating to observe.

The clear conclusion is that those looking to buy an estate have increased in number, they come with a much wider variety of interests than previously seen but the supply remains extremely tight and limited. So for those considering a sale of a either a traditional estate or stock farm, this appears to be an optimum time. The one that is not in short supply are potential buyers. n

Emma Chalmers 07899 877 732 emma.chalmers@galbraithgroup.com 25

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A9 Dualling Update

Delays beyond 2025 now inevitable In December 2011, the Scottish Ministers confirmed a commitment to upgrade the A9 between the cities of Perth and Inverness to full dual carriageway by 2025 as part of their Infrastructure Investment Plan.

Transport Scotland’s £3 billion programme is designed to deliver economic growth through improved road safety and reliable and quicker journey times, as well as better links to pedestrian, cycling and public transport facilities.

With 80 miles (129 Kilometers) of road to be dualled, the project was split into 11 deliverable sections. At the time of writing, only two sections are complete (13 miles worth of dualling) and with only three years until the A9 is scheduled to be completed a delay to the completion of the dualling is inevitable due to the time it takes to construct each section. The alternative would be significantly delayed journey times between Perth and Inverness over the next 3 years as the majority of the A9 would be limited to 40mph through the roadworks.

The global pandemic has hindered many building and construction projects across the country including the A9 dualling, but as the country opens up discussions are progressing with three possible contractors to dual the six miles between Tomatin and Moy. Transport Scotland hope to announce later this year which contractor has been successful in delivering the £115 million project with the expectation that work will start in 2023 for a projected completion date of 2025.

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Preparation work has recently started on the C1121 Tomatin to Kylachy road which requires improvement prior to the main dualling work commencing.

The preparation work includes a new access road for Tomatin Distillery and the replacement of a pedestrian footbridge over the Allt na Frithe.

As part of the compulsory purchase procedure, any landowner or occupier, who has had land taken is entitled to compensation for losses and damages incurred. The assessment of compensation will take into account the value of the property and the value of related effects known as severance, injurious affection and disturbance. Individuals who do not have land taken may also be entitled to compensation as a result of the physical factors associated with the use of the newly dualled A9.

The Scottish Ministers will meet surveyor’s fees to assist with the compensation negotiation and we are able to assist with all aspects of the CPO process and therefore should any landowner be approached by Transport Scotland, we would advise you seek professional advice and Galbraith would be happy to assist. n

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

Extending high-speed broadband to rural areas is a key part of modernising the economy at a time of rapid change but it’s important to note the potential disruption involved and look at ways to cope.

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| Rural Matters | Summer 2022

Virtual events – A Covid cameo or gearing for the future?

The smell of grass; the rabble of arriving patrons and a bubbling sense of excitement, ah, it must be show time! After more than two years in obscurity, shows are back and the Galbraith team are all set for a busy year of events.

It wouldn’t be truthful to say events completely disappeared whilst Covid-19 restrictions were in place for some it just meant going online! Virtual events were no new concept in March 2020, but what followed meant they went from being a tasty side dish to the full buffet.

The annual Galbraith AgriConference last February was our first headliner to take place over the web and it proved to be a roaring success. Although it would never have replaced the buzz of real socialising, it provided an evening of entertaining content, informative speakers and a fleeting escape from the reality around us.

Comedy skits from Jim Smith, interviews with Edinburgh Rugby players & coaches and a live interactive quiz allowed Galbraith to showcase our work and services to the agricultural community despite prohibiting travel and social restrictions.

We weren’t the only ones. A raft of events went virtual – some to different degrees of success – and none bigger than the Royal Highland Show. The thought of the RHS going behind closed doors could have meant curtains, but the organisers

managed to adapt and piece together a global spectacle.

Without the usual geographical restraints, the ‘Royal Highland Showcase 2021’ streamed 252 hours of live footage to 87 countries, watched by 270,000 people, and reached two million mobiles via social media.

That’s a lot of eyes peering over the Galbraith Bridge!

With us all set for face-toface events returning it will be interesting to see how organisers utilize their virtual space going forward. The RHS has plans to utilise online alongside their physical show this year in the hope of maintaining the international reach of 2021. Nothing beats the real thing, but being forced to cast a wider net online last year opened up a wealth of opportunities too good to lose.

Although restrictions are easing, we do live in a digital world and adapting to the times were an inevitability – for some Covid-19 just helped accelerate the process. n

Callum Kerr 07920 496 824 callum.kerr@galbraithgroup.com

Approached by BT Openreach about wayleaves to facilitate broadband?

Since the introduction of the £15 million Scottish Government-backed Reaching 100% (R100) programme, aimed at providing every home and business in Scotland with broadband speeds of at least 30Mbps, we have been instructed by a number of clients across the country to act on their behalf and have negotiated favourable wayleave terms to facilitate the works.

As a landowner approached by BT Openreach about the installation of apparatus, you have a right to be represented by a surveyor and have your reasonable fees covered, as set out in the Electronic Communications Code.

The standard wayleave form that Openreach prefers to use omits certain

clauses with regard to ‘lift and shift’ provisions which you need in place should the apparatus need to be moved in the future, for example due to development. Also excluded are clauses in respect of compensation due to the landowner, such as for any reinstatement works required following the installation.

It is imperative to consider practical matters, such as stipulating apparatus be buried to a minimum depth of 900mm on farmland to avoid interference with normal agricultural operations.

We would also recommend meeting with Openreach and its contractors Morrison Telecom Services on site to discuss the proposed works as there may be small changes, such as the relocation of a cabinet further along a hedgerow, or a

slight change to the cable route that may reduce the interference with your day-to-day practices. One client used the ducting being installed to facilitate a power cable to a farm steading, so it is worth considering these points once an approach has been received.

If you have been approached by BT Openreach to have apparatus installed on your land, either with regard to the R100 programme or otherwise, please do not hesitate to get in touch as we would be delighted to assist. n

Callum Woods 07824 142 069 callum.woods@galbraithgroup.com 27

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Update

Market update As a result of the Russia – Ukraine conflict which started on 24th February 2022, the global economy has been hit by significant uncertainty and increasing inflation.

Russia and Ukraine are both major producers of essential raw materials such as oil and grain and the increasing cost of these commodities is already having an impact. Supply chains have also been disrupted causing new logistical challenges.

In response to sanctions imposed on Russia by several countries, Russia has banned the export of over 200 products until the end of 2022 including commodities such as timber, and essential medical, electrical and transport equipment, all having a direct impact on the agricultural sector.

The agricultural sector has been significantly affected by the conflict as well as several other dynamics over the last four months. We will now summarise the trends and issues within each of the key sectors of British agriculture.

Cereals 2022 Wheat: Wheat markets are currently experiencing notable price volatility due to the Russia – Ukraine conflict. No-one knows how long the conflict will last, and therefore futures are experiencing contract highs. The rate of grain production this year will be significantly reduced in Ukraine and this will limit global supply.

Futures Prices for London Wheat have increased at a much greater rate in the first 4 months of 2022 than in previous years. Data provided by the AHDB shows that the price has increased dramatically since the end of February 2022.

Although there has been a steady increase in price since the start of 2020, we have not experienced an increase of this magnitude before. On 1st April 2022, future prices were at £303.50/t. This is a substantial increase from April 2021 where they were £190.35/t and from April 2020 when they were £155.25/t.

Feed wheat: whilst not sourced from Ukraine or Russia, feed wheat is likely to see a price increase due to the conflict in the ‘breadbasket of Europe’.

The UK largely produces its own wheat, with only 15% being imported, mainly from Germany or Canada, however this worldwide reduction in supply will inevitably place pressure on the feed barley market.

Barley: Demand for barley by the brewing, malting distilling trades is expected to bounce back to near pre-pandemic levels in the upcoming season. A rise is also expected in the demand for barley in animal feed, despite still being down compared with the year before.

Oats: Oats have recently experienced an increase in production with the 2021 oat crop reaching 1.1Mt. Due to the large availability of oats this

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Having the right animals in the herd is critical, as is to maintain a healthy and balanced diet for them.

Jack Marshall.

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| Rural Matters | Summer 2022 season and the relatively inelastic demand domestically, oat exports are now forecast to reach 100Kt. This is partly down to the fact that there is a limited volume that can be used as feed on farms. End-season stocks are currently forecast at 175Kt, the highest level since 1999.

Maize: The demand for maize as animal feed has decreased this season from feed producers, due to the relative price compared to wheat. In the latest estimates, Maize imports are forecast 31% lower than 2020/21, at just under 2.0Mt. Regarding domestic consumption, this is also expected to fall as a result of the ever-increasing prices.

As a result of the Ukraine situation the global supply of maize could be very limited.

OSR: The supply of OSR to the market is also being heavily impacted by the conflict. In the last 3 years, the Ukrainian supply of OSR accounted for 39% of EU OSR imports. The majority of Ukrainian OSR imports to the EU occur between July and December. Therefore, the full effect of the conflict on Ukrainian exports is yet to be realised.

Andrew Sanderson 01738 456 071 andrew.sanderson@galbraithgroup.com

Beef As we enter 2022 following on from an excellent back-end performance the strength of the average deadweight cattle price has continued to flourish. At the time of writing beef prices reached a peak price in the week ending 26th March with the average price for deadweight GB prime cattle increasing to 419.8p/kg. The question remains whether the high prices will be enough to counteract the increase in input prices experienced across the sector.

Cull cows have likewise enjoyed a strong start to the year reaching record prices, on April 6th the average GB cull cow deadweight price was £1/kg over the 5-year average.

Rising input costs are causing many to consider the future of their cattle enterprise. Many producers have either reduced suckler cow numbers or cut them all together, after an analysis of the net margin to date

and the potential margins based on the current prices.

Looking at some recent figures produced by AHDB, the volume of beef purchased in the UK has dropped by 10.1% year on year to March 2022. With the rising cost of living, we are concerned that the demand for beef in both the retail and hospitality sector will decline.

As consumers make financial sacrifices the premium attributed to Scotch beef is likely to price the product out of many customers’ budgets.

Lamb As we entered the new year the deadweight price of lamb had a late resurgence finishing at 620.1p/kg. It appears that this strength could not be carried through into 2022 with the monthly average declining to 568.6p/kg in March. This decline is largely due to a greater supply of lamb in the market. In terms of demand, consumers may be feeling the effects of inflation compounded with the ever-increasing cost of living.

The hospitality market likewise may feel this effect with consumers reducing their meals out. As we enter the Easter period it is expected that both dead and liveweight prices will gain ground recently lost.

According to the AHDB, consumption of lamb has fallen in the year-on-year change to March 20th 2022. The most notable decreases being a 9.2% decrease in roasting and a 21% decrease in the consumption of lamb chops. Notably, consumption increased in ‘ready to cook’ and burgers and grilled lamb.

It will be interesting to see how the lamb price fluctuates throughout 2022, as the issues last year were likely down to lower supply from New Zealand as a result of rising fuel costs.

As lambing progresses the weather up to the end of March has largely been favorable for outside lambing, which may lead to a high lamb stock for the 2022 season.

Calum Chalmers 07917 220 785 calum.chalmers@galbraithgroup.com

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Update Milk The dairy industry is no stranger to tough times and continually goes through periods of peaks and troughs every five years or so. The current global pressures with rising costs across the board impact on the sector heavily due to the high input nature of the industry. To combat the growing pressures of inputs rising, milk processors are raising the price they pay producers, with many set to be paid upwards of 40ppl. The question many farmers are still asking is, is this enough? This comes at a time when milk production naturally increases moving through spring.

UK Farmgate average price for January 2022 was 35.46ppl (AHDB, 2022) which is an increase of 12.32% from 31.72ppl in September 2021. This further extends the current run of the UK average price being 30ppl or higher to 9 months.

Jack Marshall 07899 980 246 jack.marshall@galbraithgroup.com

Conclusion Prices in the next 12 months are likely to fluctuate significantly and there is no certainty with regard to prices next week, never mind in the Autumn of the year. Globally, 26 countries sourced at least half their wheat imports from Russia and Ukraine.

With exports from these countries decreasing, prices will increaseThis is likely to have a knock-on effect on maize, oilseed and fertiliser.

Russia is a major exporter of potash and phosphate, vital ingredients in fertiliser production. Yara International, one of the world's leading agricultural chemical producers, reports that half the world's population consumes food which has received fertiliser application at some point during its production. If there is a failure to supply these crops with fertiliser then a decrease of up to 50% in yield could be experienced.

The rise in fuel costs are a further challenge for UK farmers and this is particularly highlighted in the following table.

Most days now we are getting questions and statements from our clients along the lines of “Will I just buy enough fertiliser for 1st cut?”, “How much slurry can I put on”, “Do I need to put on P & K?”, “How little

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fertiliser can I put on”, “We are simply not buying any fertiliser this year”, “I will need to sell some cows”. These are tough questions for us to answer, but through changing some practices and mind-sets we are confident that some of these input costs can be mitigated, even a little.

It all starts with looking to Regenerative Practices, which some milk processors are already encouraging by way of paying their processors a bonus for committing to these. We are advising clients to start with the fundamentals of their businesses, initially looking at their soils and grasses.

Start by getting soil samples taken to get a baseline of what the ground is currently like. Some processors and fertiliser companies are even offering subsidised sample programmes. If the pH levels are not right fertiliser is simply not being utilised to its fullpotential. Spreading of fertiliser, slurry and FYM will alter the pH of the soils over time, so it is vital that this is

corrected by the application of lime.

Another key point to soil sampling is that it identifies what the ground needs in terms of magnesium or calcium lime, so the landowner can apply the correct product.

Reseeding is another exercise that can help in the face of soaring fertiliser costs. An expensive task in its own right, however fertiliser will be needed regardless and it will benefit a younger sward as opposed to a field with 20 year old plus grass. In return fresher grass should provide more feed value and in a greater volume on the same area.

Having the right animals in the herd is critical, as is to maintain a healthy and balanced diet for them. While some farmers are talking about down selling some cows due to input costs, shift that focus on to selling out the under performers, cows with repeat feet and fertility issues and consistent low yielders.

Now is not the time for passengers. n

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| Rural Matters | Summer 2022

Farm consultancy update Over the last four months the farm consultancy team has been particularly busy with entitlement trading work with the transfer deadline concluding on 4th April 2022.

This year was one of our busiest trading periods with (10,000 hectares) traded on the open market. The average value for region 1 entitlements in the year was £160 per unit.

Ongoing farm business consultancy is taking place as normal including regular budget and farm management advice to meet current and future policy objectives.

With the regular IACS deadline now approaching, subsidy and grant applications are our main focus as we help clients to complete greening plans and the regular online applications. It is important to review and check all eligibility requirements in the year to ensure greening, minimum stocking and cross-compliance eligibility requirements have been met.

The rise in input costs may lead to overdraft pressures and all options to mitigate that pressure are consequently now being discussed. The impending Agri Environment Application deadline will bring forward many opportunities for infrastructure and environmental enhancement but, more importantly, offer annual management payments to farming clients.

At Galbraith, we are available to undertake Farm Consultancy works throughout Scotland and the rest of the UK. If you have any queries in relation to Farm Consultancy matters, please do not hesitate to get in touch with your local area office. n

Martin Rennie 07899 923 138 martin.rennie@galbraithgroup.com

Residential property letting - Compliance checks Compliance checks for the residential letting sector are forever growing and it is imperative that landlords and agents keep abreast of the changes.

From registering as a landlord to checking that any furnishings comply with fire regulations (1988), there are fines of up to £50,000 for landlords who fail to comply.

Under Health and Safety legislation, all landlords are required to undertake a legionella risk assessment then carry out and monitor any measures necessary to control any identified risk. Landlords or a professional can conduct the assessment. Once the risk assessment has been completed you are required to carry out any measures required to control any identified risk. The risk assessor will be able to provide guidance on any works required. Under letting legislation you are also obliged to undertake regular reviews in the future, particularly if changes to the water system have been made. During any void periods you must also ensure that the water system is regularly flushed through.

EPC Regulations – Following the pandemic the Scottish Government placed a pause on the introduction of minimum Energy Performance Certificate (EPC) standards across rental properties in Scotland due to the

disruption of the Coronavirus Pandemic.

Instead, the Scottish Government plans to introduce a minimum EPC rating of C at any change of tenancy from 2025. All rental properties (regardless of whether a tenant has moved out or not) will have to reach the minimum C standard by 2028, with some exemptions for certain properties. Energy efficiency standards will be raised for all properties, not just the rental sector.

Private Water Supply The Water Intended for Human Consumption (Private Supplies) (Scotland) Regulations 2017 came into force in October 2017, and are regulated and enforced by the local authority. The main objective of the regulations is to ensure the provision of clean, safe drinking water and to deliver significant health benefits to tenants with a private water supply. This could mean protecting the source by making sure fences are well maintained, or limiting the possibility of contamination, including from pesticides, grazing animals or septic tank waste.

It is also important that your water treatment is operated and maintained

appropriately. Otherwise, your supply may become unsafe and be a risk to your tenant’s health. This could be something as simple as making sure the UV filter is cleaned and the bulb replaced. Also, if there are any storage tanks on your system, you may need to check them to make sure dirty water doesn't enter them. And they may need to be cleaned regularly.

Septic tanks are common in rural properties- if the property has a septic tank or is connected to a sewage treatment plant, a tenant must use cleaning products recommended for septic tanks and sewage treatment plants and must not dispose of any household chemicals, oil, pesticides, antifreeze, paint, feminine hygiene products, contraceptive devices or any other item that can stress or destroy the biological treatment in the system or block or damage the system. n

Susan Guthrie 07778 000 657 susan.guthrie@galbraithgroup.com 31

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Update

All the landlord’s reasonable fees should be paid by the mobile operators for negotiating and progressing a consensual agreement.

Mike Reid.

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| Rural Matters | Summer 2022

Telecoms update – landowners should beware future pitfalls of Code agreements Since the introduction of the new Electronic Communications Code in December 2017 there have been more telecom Tribunal cases than there were in the previous 30 years.

This is perhaps understandable given that significant changes in the Code have led to reduced incomes for landlords hosting sites on their land or buildings.

The Government intends to reform the Code with further legislation later this year but unfortunately the whole focus of the review appears to be about granting mobile operators further rights without additional safeguards for landlords.

While the focus for many landlords is the reduction in income, people shouldn’t lose sight of the longer term implications of a Code Agreement. Landlords need to ensure they aren’t signing up to terms that ultimately could damage their retained property interests and add significant problems and costs at the end of the agreement.

Future compensation The Code provides various safeguards for landlords but some are only available if an agreement has been imposed by Tribunal so, if a consensual agreement is agreed, rights need to be included to ensure the protection by the Code.

A good example of this is the landlord’s right to receive compensation for any loss or damage that has been sustained or will be sustained as a result of the exercise of the Code rights granted by the Lease. This is a Code right but only if the agreement is imposed by the Tribunal or appropriate terms are agreed in the consensual terms.

Many operators propose consensual terms which don’t offer any compensation for any loss or damage incurred in future so the landlord won’t be protected and no

compensation will be payable should any losses be caused.

their future property rights and interests.

Rent reviews Whereas there is focus on the level of the commencing rent under a new lease, attention should also be on the rent review mechanism and frequency.

Once a new Code Agreement is agreed it will be very difficult to terminate and any changes will potentially require an expensive Scottish Lands Tribunal procedure so any terms agreed now may be in place for many years to come, leaving landlords unprotected by the rights they could access under the Code from a properly negotiated consensual agreement.

If there is no provision for the rent to be reviewed or if there is one specific identified date during the lease when the rent can be reviewed, it may be very difficult for the landlord to have the rent reviewed at the end of the Lease without, in Scotland, an expensive ‘Paragraph 33 application’ to the Scottish Lands Tribunal.

Taking into account the level of rents now paid for telecommunication sites, the cost of such an application is likely to far exceed the benefit of any increased rent making an application uneconomic and not worth progressing. The rent would then continue at a lower than market level for many years.

Misleading code approaches When mobile operators approach a landlord about a new lease or a lease renewal they often give the impression there is very little option to agree with their proposed terms and conditions when that is not the case.

Every landlord should be able to agree a negotiated consensual agreement rather than have terms imposed upon them by the mobile operators. This misleading approach will lead many people to think that they have no option but to sign up to the proposed terms, which could end up unnecessarily prejudicing

Take advice to protect your rights In times of changing legislation it is always good practice to obtain advice on any new agreement, particularly one that could potentially last in perpetuity due to the protection of Code rights.

All the above issues can be agreed in an appropriate way in a consensual agreement to protect the landlord’s property interests so it is very important to obtain advice on any new Code approach.

All the landlord’s reasonable fees should be paid by the mobile operators for negotiating and progressing a consensual agreement. Most consensual terms put forward by mobile operators only propose a contribution to the landlord’s professional fees rather than confirming that all the reasonable fees will be paid, again offering no protection to any landlord who doesn’t obtain professional advice from a Code specialist. n

Mike Reid 07909 978 642 mike.reid@galbraithgroup.com 33

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Successfully farming and contracting since 1892 Fin Hay of Hay Farms provides an insight into the current challenges facing the agricultural sector and contract farming in particular.

My great, great grandfather came to Easter Rhynd Farm, Perth in 1892 and started renting the land from Wemyss and March Estates.

Messrs Charles Hay (MCH) have been in the game a long time but not always contract farming, why contract farming?

We were given the opportunity to buy the farm in the 1940’s and have been here ever since. Over the years we have changed our focus from a mixed farm in the 70’s to an arable and potato farm and then gave up growing potatoes in 2014 to focus on cereals and contract farming.

We saw it as an opportunity to expand without incurring the financial costs of buying land. We probably had slightly too much machinery for our own work at home and were looking for opportunities to make use of our equipment and I guess stumbled across contract farming.

After starting up the first one and seeing how it could work well for both parties, we actively went looking for more and started to notice there were opportunities out there. There is no doubt that the costs of running a farm have soared over the last few years and while many landowners still like to have control over their land and be the farmer, they don’t have the will, capital, or knowledge to make it work. That’s where we would come in as the contractor to provide the machinery, labour, and expertise while allowing the famer to retain control over their land.

We had purchased a couple of small farms neighbouring us over the years but in the early 2000’s saw an opportunity to grow our business without the financial burden of buying expensive arable land and that was through contract farming. Our first one was set up in 2003 and we have never looked back, currently running 9 different agreements along with 5 rental agreements and a bit of contracting work. In 1999 we were farming 308 hectares and today we are farming 3,300 hectares.

As mentioned, we had spent a lot of years building up the potato side of our business, growing around 200 hectares a year but we became pretty disillusioned with the way that market was going and decided in 2014 to stop growing and focus solely on cereals and increasing our contract farming portfolio. Since then, we have started up a 4 hectare apple orchard producing for Lost Orchards Cider company based in Dundee and also planted a 4 hectare honeyberry orchard.

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There was a lot of hype about contract farming agreements about 5 years ago, do you think they are still increasing in popularity?

There has been a bit of a slowdown in contract farming opportunities over the last few years. New ventures are not happening as much in our area. I feel the whole of Scottish agriculture is in a bit of a holding period just now with several very important issues still without clarity and that’s making people nervous to venture into new things or change what they are currently doing. A big one is leaving Europe and how that’s going to affect subsidy – we (in Scotland) still don’t have a clear idea of what money is

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| Rural Matters | Summer 2022 going to be available and what farmers must do to get it. It’s a substantial amount of money to take out of anyone’s farming business.

There is also a big push coming on greenhouse gas emissions, regenerative farming, and the more recent issue of rapidly increasing input costs. I think all these factors are contributing to a cautious approach that is not conducive to new agreements. That said, I still firmly believe in the principle and once businesses prove that they can still work effectively in this current climate I believe opportunities will continue.

The farming landscape and agricultural sector has altered a lot in the last 10 years in terms of regenerative agriculture, what do you think have been the biggest changes for MCH and how has the business adapted?

I think the last 10 years have been a hugely turbulent time around the world never mind just agriculture.

Brexit, Covid, the energy crisis, a larger focus on greenhouse gas emissions and rising input costs have all provided challenges to agricultural businesses. I think we must be careful with regenerative agriculture that we don’t get too hung up on doing things the way someone else is doing it!

Everyone’s soils, climate and conditions are different all round the world and it’s about finding the best way of managing and maintaining your soils, biodiversity and carbon footprint while continuing to achieve the yields we need to feed the world.

We bought a direct drill last year to run alongside our conventional power harrow drill and a disc drill. This has allowed us to try out and experiment with different ways of establishing crops and putting some cover crops into the rotation. Some have been successful while other things we have tried have not worked so it’s a continual learning process which must be balanced against producing a good return to our farmers.

Industry standards are ever increasing, for example PepsiCo’s recent partnership with LEAF Marque, has this been a challenge to the farming industry and MCH business?

I think it’s the nature of the beast, every supermarket/ packer/

distributer is looking to have an advantage over their opposition and increasing standards is a way to do that. It doesn’t always create a lot of extra work as many farmers are often doing many of the recommendations, but it creates extra paperwork making sure everything is documented and recorded to prove you are meeting the standards. I think it’s a good thing that we as Scottish / British farmers are at the top of the welfare and standards ladder, globally, I just don’t always think this is effectively communicated to the consumer. When I ask friends outside of Agriculture what a LEAF stamp on a packet means – none of them can tell me!

Do these changes affect your contract farming agreements? Do you feel that as contract farmers, it is easier or more challenging to adopt these changes?

I think it can vary hugely depending on the landowner. We are very lucky in that most of our landowners are very open to change and keen to look at ways we can improve what we are doing as a partnership. Many will often come to us to suggest we, for example: • conduct a carbon audit • try sowing some cover crops • look at an AECS Scheme • look at reducing cultivations This means if we try things on one contract farm and it is successful, we can take that information and share it with our other clients to suggest we try a new approach. This collaborative approach is one of the benefits of working in partnership. At the same time, we are aware as contractors our job is to grow high yielding crops that produce a good return to the landlord and ourselves year on year, so we need to be careful with how much experimentation takes place at one time.

Right now, we, as growers of cereals and oilseeds, are in the fortunate position that the value of our produce has also risen to figures not seen before. As long as they stay up there this goes some way to mitigating the effects of the rising inputs. On our forward budgeting, our gross margins continue to work even with fuel over £1/L and fertiliser over £1000/T if

wheat is at £300/T. Of course, if the commodity price began to drop and the input costs stayed where they were it could get more difficult. The crucial thing, for us, is to try and maintain high yields. The higher the yields the more thinly spread our input costs are and the more income we generate. Trying to continue with the high standards and follow sustainable agriculture policies will still be possible as long as it is not having a detrimental effect on yield.

What do you see the next year looking like for the agricultural sector?

Looking ahead to this harvest I am positive about where we might end up. We bought a lot of our inputs last summer before the prices went soaring up and although fuel and labour is up a bit, we have had a relatively kind winter of weather and have some promising crops with the potential of good prices. I am a bit more pessimistic for harvest 2023.

With prices of inputs where they are currently, we will have the difficult decision as to whether we buy forward this year or hope that the prices drop by next spring. If we wait, we run the risk of supply issues, also where will the price of wheat become summer 2023? As always, a crystal ball would be helpful to see into the future but failing that we will need to make some big decisions in the next months that could have big financial consequences on our bottom line.

Hopefully we will have a bit more clarity on how the subsidy system in Scotland will look going forward in the next year. I hope we might see some settling down of global issues that’s causing so much of the turmoil just now, but I suspect we will have a few more months and years to see out yet.

Our philosophy, as a business, is to remain flexible and adaptable to change and hopefully we, along with everyone else in the industry, don’t just survive but thrive in the next year. n

Ailsa Baird 07917 464 262 ailsa.baird@galbraithgroup.com

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Aberdeen 01224 860 710 aberdeen@galbraithgroup.com Ayr 01292 268 181 ayr@galbraithgroup.com Blagdon 01670 789 621 blagdon@galbraithgroup.com

Hexham 01434 693 693 hexham@galbraithgroup.com Inverness 01463 224 343 inverness@galbraithgroup.com Kelso 01573 224 244 kelso@galbraithgroup.com

Castle Douglas 01556 505 346 castledouglas@galbraithgroup.com Penrith 01768 800 830 Cupar penrith@galbraithgroup.com 01334 659 980 cupar@galbraithgroup.com Edinburgh 0131 240 6960 edinburgh@galbraithgroup.com Elgin 01343 546 362 elgin@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