People, Planet, Profit

Andrew Shirley, Head of Knight Frank’s Rural Research team, explains how the firm is helping to make the countryside a better place for the natural habitats and communities that lie at its heart, but argues that policymakers should be doing more.

As I write, permacrisis has just been nominated as the word of the year for 2022 by Collins Dictionary.

Shirley Head of Rural Research Knight Frank

The definition of permacrisis, an extended period of instability and insecurity, at first glance ties in rather nicely with the theme of this year’s CULS magazine: There is no education like adversity - staying the course through relentless change and disruption. Indeed, some in the agricultural sector might argue that the industry, through no fault of its own, is in a state of permanent crisis. However, I think its connotations are far too negative.

It suggests rural businesses are constantly fighting fires, solving one problem only to be confronted with another. Of course, we all know some that do seem to lurch perpetually from one crisis to another – one step forward, two steps back. But for our growing Rural Consultancy team and the increasing number of forwardlooking farms and estates that we work with, at least, we don’t see crises, we see opportunities, often increasingly challenging and disruptive to be sure, but opportunities nonetheless.

Thought leadership

Staying the course is not about standing still, it’s about moving forward and accelerating, but, crucially, not in a blinkered way, blind to the wider world. The “Three Ps” theme of the recent edition of The Rural Report, Knight Frank’s annual thoughtleadership publication for its rural-property owning clients, sums up our approach: people, planet, profit. Good businesses deliver prosperity not just for themselves, but for the communities and natural environment around them.

And challenging though they may seem, many of the issues that rural businesses are having to face currently will be catalysts for a more sustainable, long-term future.

Escalating fertiliser prices, driven through the roof by Russia’s invasion of Ukraine, will, for example, certainly hit the bottom line of arable businesses next year, but our expanding Agri-consultancy team is helping many of them to reduce their reliance on artificial nitrogen by adopting techniques such as regenerative or restorative agriculture.

As Jake Fiennes, Conservation Manager at the 25,000-acre Holkham Estate in Norfolk explains in an interview in The Rural Report, it is possible to increase profits, make space for nature and boost biodiversity. “Everybody wins,” he told me.

Regenerative

Some critics of regenerative agriculture dismiss it as a return to 18th Century farming, but it is very much science-led. Using fewer chemicals certainly doesn’t mean eschewing technology and often goes hand in hand with it via applications such as precision agriculture.

The use of big data, in particular, is something that we believe will deliver huge benefits around each of the Three Ps. Increasingly sophisticated mapping software means our geo-spatial teams can help estate owners make more informed decisions, whether that’s the location of tree planting to prevent downstream flooding or selecting sites most suited to growing grapes.

Higher energy costs, another consequence of the Ukraine crisis, have also ramped up the focus on renewable energy solutions and at the same time revealed weaknesses and contradictions in government policy. Our specialist teams are helping farms and estates to become less dependent on fossil fuels, but planning restrictions on ground-mounted green-field solar and on-shore wind are holding back the transition.

Geo-political instability and conflict may be hogging the headlines at the moment, but the Black Sea conflagration has only exacerbated the impacts of the two big issues that were already underpinning the rural land agenda and our clients’ future strategic direction: Brexit and climate change. If the Putin-enforced cost of living crisis and the revelation that our food supply chains are far more fragile than we had perhaps assumed them to be is to have any silver lining, hopefully it will be to make policymakers realise that it is they who are holding back the rate of change that is required, not landowners.

Natural capital

Our continued reliance on natural gas, for example, reflects a long-term lack of joined up government policy on renewable energy, while the UK’s new environmental support schemes that will replace EU subsidy payments and are supposed to boost biodiversity and mitigate climate change are too long in the planning. Ambitious government tree-planting targets are not matched by the incentives available. Important reports such as the Dasgupta Review, which investigated the economics of biodiversity, or Henry Dimbleby’s National Food Strategy are side-lined.

Notwithstanding, this policy deficit, natural capital is still a buzzword of the moment and much of our work with our estate-owning clients revolves around helping them identify and measure their natural capital with a view to releasing its potential value. This could involve carbon credits, biodiversity o setting or other schemes that deliver public goods and nature-based solutions such as flood mitigation, habitat restoration, rewilding or even green social prescribing.

These all have the potential to create new income streams for our clients that will temper the impact of some of the issues described above, but we have a responsibility to ensure the family silver isn’t sold o for a bargain price or that tax and other liabilities aren’t created for future generations. Polluting businesses see buying carbon credits generated in the countryside as a great way to o set their own emissions and hit net-zero targets, but one day those credits may well be needed by the farms and estates in question when their own customers ask them to hit net zero, too.

It is a steep learning curve that we are all on at the moment, but it’s an exciting journey and rural property experts are playing a key role in shaping the future of the countryside for the better and ensuring a permacrisis is a more of a permaopportunity.

To request a copy of The Rural Report please email andrew.shirley@ knightfrank.com