Farming Today

09/10/24 - Natural capital report, Thames Water reservoir, beef prices

We cannot achieve food security or climate stability without restoring nature according to a new report from Natural England, which outlines the value of the natural world to our society and our economy. The State of Natural Capital Report says the wildlife and countryside in England should be seen as a 'National Wealth Service' - an economic asset which is vital to national prosperity. It puts a figure on the value of some natural services - for instance it claims pollination is worth around 500 million pounds to agriculture.

Thames Water wants to build a new reservoir near Abingdon, Oxfordshire, which could hold 150 billion litres of water! It would cover 4 and half square miles and the company says it would secure future water supply for 15 million people across the South East. But local campaigners say Thames Water should focus on reducing water leakage, before building it. We hear from one farmer facing a compulsory purchase order of some of their land if the plans are approved.

And farmers are getting the highest price for their beef animals in England and Wales, for ten years. Part of the reason, according to Meat Promotion Wales (Hybu Cig Cymru), is growing domestic demand.

Presented by Anna Hill Produced by Heather Simons

Broadcast on:: 09 Oct 2024
Audio Format:: other

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Give it a try at Mint Mobile dot com slash Switch. $45 up from payment equivalent to $15 per month. New customers on first three month plan only. Taxes and fees extra. Speed slower above 40 gigabytes of detail. BBC Sounds. Music. Radio. Podcasts. Hello, it's Anna Hill here with Farming Today podcast where we hear about the impact of a new reservoir in the Thames Basin. We find out why beef prices are higher than they've been for 10 years in England and Wales. And could our countryside and natural assets become the national wealth service if we invested in it more? We may be approaching points of no return. We may be approaching what we would call tipping points with the state of our natural assets in this country. And given the value of nature to the economy and to society, that's hugely worrying. We'll have more on that a little later. But let's start with the price of beef. Farmers are getting the highest price for their beef animals in England and Wales for 10 years. Part of the reason, according to meat promotion Wales, is growing domestic demand. Hannah Clark is senior red meat analyst at the Agriculture and Horticulture Development Board, which covers both England and Wales. Prime cattle prices through the four weeks to the 28th of September, which is the latest data we have at the moment, have been 6% on average higher versus the same period last year. And average cow values have been up by a similar amount as well. So we are at the historic high level. Okay, so why? What's happening? Well, prices have really come to their level currently, despite there being more supply on the market from both increased slaughter levels and imports as well. It would suggest that demand drivers affirm. So just to put it simply, you're basically saying that people are eating more beef. Yeah, we've seen an increase in volume sales of beef through retail. The cost of living pressures that we've seen over the last few years and price inflation and cost inflation have eased a little this year. And that would have taken some pressure off consumer spending as well. Now, seasonally, we're heading into winter. We're seeing increased buying interest in the supply chain ahead of that really key period of Christmas. Will this mean prices are up on supermarket shelves? So that's quite a difficult one to tweeze out. Markets are all interlinked. But in terms of direct costs on shelf, we wouldn't have really any evidence on that point. So what does it mean for farmers then? If the prices are up, does it mean they're making good profits? Yeah, I mean, as we all know, the industry has had to tackle, you know, significant increases and volatility and input costs for, you know, things like fertiliser feed and fuel over the last few years. We've seen that input cost inflation generally cool into 2024, which will have created a more stable picture in terms of farm inputs. But even when we factor those adjustments in on farm costs and the strong beef price, the latest cost of production data we have from our farm bench programme shows that only the top 25% of beef producers, that's across suckler and finishing enterprises, are in a profitable position. So does that mean then that 75% of beef producers and farmers are not actually making a profit? So even with a strong beef price, we know that profitability is still an issue across the vast majority of the sector. Does there need to be a change in the way beef is produced so that farmers are more farmers and making a profit out of it? We've recently released a report on the top 25% of farmers and what they do differently. We always advocate farmers to really understand their cost of production and we have a lot of tools and resources available on AHP website for farmers to do that. But, you know, of course, a lot of things are outside the farmers control, things like weather, which have a huge impact and exposure to the global market as we are with things like feed and fuel and fertiliser. There's a lot outside the farmers control. Hannah Clarke from the AHDB. King Charles III has been confirmed as the new patron of the National Federation of Young Farmers Clubs, succeeding his mother the late Queen Elizabeth II. He previously served as president from 2002 to 2006 and has a long-standing connection with the organisation. Now, all week we're focusing on managing water when there's too much or too little. Many farms have small reservoirs storing water for crop irrigation. But when it comes to water companies, storage is on a different scale. Thameswater wants to build a new reservoir near Abingdon in Oxfordshire, which could hold 150 billion litres of water. It would cover four and a half square miles and the company says it would secure future water supply for 15 million people across the southeast. But local campaigners say Thameswater should focus on reducing water leakage before building it. A previous bid on the site in 2011 was rejected by the government and it's meant years of uncertainty for some landowners who could face compulsory purchase orders if the latest plans are approved. Amanda Della has been to meet a farmer, a campaigner and Thameswater to find out more. I'm Simon Thomas, I'm file manager for H. Walker and son at Garford. We stand to lose about 1,000 acres of our own ground and 800 acres of our next-door neighbour's ground. This set of buildings that we're at at the moment, the kind of future of it, is up in the air because we don't want to go about rebuilding here when they could just be compulsory purchased in a few years' time. So obviously things are just on hold. It's had an effect on the business since the reservoir idea was, forgive the pun, floated in the 90s. If the reservoir does get the go-ahead, the farm will be compensated. Yeah, that'd be done under compulsory purchase, but for the minimum sort of bare agricultural value, there's quite a lot of competition for farmland around these parts. So it's not as though we could just go and pick up that 1,800 acres of land somewhere else. It's always in the back of your mind. With a lot of things in farming, you just have to kind of soldier on sometimes. My name is Dr Derek Stilke. I'm a retired scientist and resident of Stephenton and I'm chairman of the Group Against Reservoir Development. Our first point is stop the leakage. If they do that and if they do water efficiency measures, you know, they won't need a reservoir at all. We're going to be faced with this, you know, 25-litre-high grassy embankment. There's just going to look like a blot on the landscape. It's just going to stand out like a sore thumb. My name is Leonie Dubois and it's my responsibility to develop our major strategic resource option projects. The new reservoir is absolutely essential. It's here to serve the whole of the southeast of England and we know, through population growth, climate change, that our water resources are under pressure. We're standing in an area of farmland and industrial buildings, lots of activity going on around us. As you can hear, I think we should probably move inside. Do you have any examples of a reservoir like this anywhere else that's been a success? You look at something like Rutland Water. It's a great place to go, but it's also an essential water resource. The different things about this reservoir though, it's mainly above ground, that's correct. So this reservoir will be made up of creating embankments out of the clay. You can't ignore as you're driving through here the big banners that say stop the reservoir. How do you go about changing their minds? This could be a great opportunity for the area. This is not just a place to store water, this is a place to enhance the environment. Do you think the negative feeling locally about the reservoir is sort of tied up with the general dissatisfaction with Thameswater because of things like sewage releases into rivers, flooding the leaking pipes? I recognise that if you live close to the reservoir site, you will have concerns. We also recognise that Thameswater needs to do better. You're improving on leakages, it was better last year and everybody would welcome that. But looking here, this is 202324 annual leakage position of 570.4 million litres a day. Is that right, 570 million litres a day being lost? Leakage is an area that we absolutely need to do better on. An old water resources management plan sets out how we're going to half leakage by 2050. The reservoir is essential, otherwise we're going to run out of water. Leoni Dubois from Thameswater. We cannot achieve food security or climate stability without restoring nature. That's according to a new report from Natural England, which outlines the value of the natural world to our society and our economy. The State of Natural Capital report, published later today, says the wildlife and countryside in England should be seen as a national wealth service, an economic asset which is vital to national prosperity. It puts a figure on the value of some natural services. For instance, it claims pollination is worth around £500 million to agriculture and claims a decline in insect life with threatened food supply. Catherine Brown, Director of Climate Change and Evidence at the Wildlife Trust, told me the report outlines how our economy is dependent on nature. The latest estimate from the Office of National Statistics puts the value of the UK's natural well to be at about £1.5 trillion. So huge, huge stock of wealth, really, of benefit in this country. But we know from other studies, we're one of the most nature depleted countries on the planet. What this report is highlighting is that we may be approaching points of no return. We may be approaching what we would call tipping points with the State of our natural assets in this country. And given the value of nature to the economy and to society, that's hugely worrying. Doesn't there have to be a serious investment then to improve England's natural capital before you can claim it to be what natural England are asking us to think of it as the National Wealth Service? Exactly, and one of the key recommendations that's coming out of the report is that nature is still not at the heart of decision-making in government. The report is calling for three things, so it wants to see an increased investment and we have seen, and obviously a lot of landowners and others are getting involved in what we call nature markets now. So trying to put an economic value on nature and actually be able to trade some of those benefits. We are seeing some growth in that sector. We're also seeing, obviously, much more attention being paid to addressing the impacts of climate change, both through reducing our greenhouse gas emissions and adapting to the inevitable impacts of climate change. But actually, I think where we've seen the least progress is this idea that nature needs to be at the heart of policymaking in government. We hope that the Labour government is going to make great strides in that, and we need to see nature being part of the discussion and really central to the discussion about economic stability, about food security and about what we would define as growth. Part of the idea of growth is that we absolutely have to maintain the security of our natural assets, and if they're in decline, growth is never going to be possible. But this government has concentrated its message on saying we need investment from outside private investment into nature and the environment to improve it. The problem is, can the value of this public natural capital ever really show a return? We would hope so. The key there is that we have to start placing a value that is tradable on natural assets, and we've seen that through things like carbon markets. We're starting to see it through other areas like natural flood management, actually the wildlife trusts are doing some work on that with the insurance industry at the moment, and the department for the environment has a target to increase private investment in nature's recovery. But actually, private investment alone is not going to be enough. Do you think this report is more about telling politicians to recognise the value of England's natural capital first and encouraging them to give more funding to improving it? I mean, we have got the budget coming up, haven't we? I think the key message that nature is still not at the heart of decision-making is core, essential to this particular report. It also highlights very strongly the connection between climate change, between nature and between food security as well, and what it's telling us is that we cannot achieve food security or climate stability in this country without restoring nature. Catherine Brown from the Wildlife Trusts. In response to the report, Defra told us progress to restore nature has been too slow. Britain is currently one of the most nature-depleted countries in the world, yet it underpins everything - the economy, food, health and society. It goes on to say it's why this government has wasted no time in announcing a rapid review to deliver on our legally binding environment targets, including how we can accelerate progress. To hitting our international commitments of protecting 30% of the UK's land and sea by 2030. That's all from us today. I'm Anna Hill, the producer is Heather Simons, farming today is a BBC audio Bristol production. Hello, I'm Sumis Omaskanda from the Global Story Podcast where we're looking at America's relationship with China. Diplomacy between the world's two largest economies remains characteristically choppy, but could the result of the US presidential election unlock a calmer future? 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