Welcome to our latest agriculture update for UK farmers.

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Farm leaders worry about new National Living Wage

Farm leaders have warned that the introduction of the new National Living Wage will devastate the UK horticulture sector. From 1 April 2016 the new rates come into force, meaning workers aged 25 and over must be paid at least £7.20 per hour.

From its starting point of £7.20 per hour in April (50p above the current National Minimum Wage), the National Living Wage is projected to rise to more than £9 per hour in 2020.

A report from Christie + Co, using data from The Resolution Foundation, found that the estimated wage increases by 2020 for the agriculture, forestry and fishing sector is 1.7%. This is almost three times more than the average UK sector.

Other agriculture news…

  • DEFRA has cancelled plans for new industry led animal welfare codes at short notice despite planning them since 2012. The poultry sector was the first to implement on 27 April 2016. There has been strong criticism from animal welfare bodies.
  • Richard Keenan & Company, which was a producer of mincer wagons and diet feeders, went into receivership on 12 April, reflecting the financial pressure on agricultural machinery suppliers following pressure on farm incomes and low confidence in the sector. Plimsoll have suggested almost 25% of companies are making a loss.
  • The new Inheritance Tax “the residence nil rate band” is due to be phased in from April 2017 with a threshold of £100k for each individual, but rising to £175k by April 2020. This is in addition to the existing nil band of £325,000.
  • Farmland values fell in the first quarter of 2016 as weak agricultural commodity prices and EU uncertainty made buyers more cautious. Knight Frank have said that English values of bare arable and pasture land fell by 3% in the first quarter to average £8k per acre. However, values are still 32% higher than 5 years ago and 176% higher than 10 years ago.
  • The Scottish government has announced million pound projects aimed at improving sustainable food and farming production Scottish Rural Affairs secretary, Richard Lochhead, said that the £48m has been allocated to strategic scientific research, including crop science, animal welfare, food security and climate change.
  • Countryside Stewardship applications have been extended to 30 September.
  • The National Association of Agricultural Contractors (NAAC) has launched an Assured Land Based Contractor (ALBC) scheme designed to provide a review of businesses and help contractors improve their record keeping.
  • Public Health England has issued an updated eatwell guide.
  • Pressure is mounting for a full government enquiry after MPs blamed late BPS payments on DEFRA and the Government Digital Service’s inability to work together. There has been a failure to introduce an IT solution for delivery of the BPS.
  • In March, more than 1000 farmers marched in London to highlight the slump in the livestock and arable sectors.
  • Oilseed rape prices have risen sharply over the past week (8 April) following a weakening of sterling.
  • Potato prices have improved with the average up to £3.22 per tonne to £188.32 per tonne.

More from our agriculture experts

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Martin Wilmott is a partner at Hawsons

Martin Wilmott acts as lead engagement partner for a wide range of corporate and non-corporate clients in the Doncaster office, especially in the Legal and professional, agricultural, transport, property and construction, manufacturing, healthcare and hospitality sectors. For more information or advice on anything covered in this article please contact Martin on [email protected] or 01302 367 262.