2020 has been one of the most difficult years for the farming industry in recent memory. The wet winter followed by the dry spring had a significant impact on yields and the first lockdown resulted in a dramatic fall in potato prices and consumption. With the political uncertainties caused by Brexit and the new Agriculture Bill, the outlook for 2021 does not look any better. Against this background, the land market has remained strong and prices have firmed. A lack of supply and increased demand from both farmers and investors ought to ensure that land values remain strong throughout 2021 which will bring some comfort for farmers grappling with uncertainty around subsidies. Rents have also continued to remain firm although the impending reduction in BPS payments must surely have an impact on rents in 2021.
For farmers, the most important task for 2021 will be setting out budgets for the bumpy years ahead. The Agriculture Bill continues to lack detail, with little clarity over the payment rate for the Sustainable Farming Incentive and the hurdles which have to be jumped in order to qualify for it. The Basic Payment Scheme will start to reduce next year and funding will be redirected into environmentally-focused schemes with the budget also set to increase for Countryside Stewardship. Whilst this is reassuring in comparison to the cliff edge of BPS cuts which we were previously expecting, the devil is in the detail and the government needs to provide a gentle transition across to new funding structures.
Other issues to be aware of throughout 2021 are the growing numbers of infrastructure projects throughout our region, such as the East-West Railway line and the Bexwell to Bury St Edmunds Strategic Pipeline which will undoubtedly bring with them questions over compulsory purchase orders and fair representation for landowners. Similarly, issues such as countryside trespass which has rocketed during COVID-19 will need careful handling and management.
However, our region continues to offer landowners opportunities for development, diversification and alternative uses. Sales of development land continue to produce significant receipts and during the year, Cheffins has handled sales of sites ranging from 30 units to 260 units to a number of housebuilders including Bellway, Hill Residential, Redrow, Taylor Wimpey and Vistry. Other opportunities include solar farms and battery storage where a number of factors such as the reduction in the price of solar panels and an increase in electricity prices has rekindled interest in these projects.
Whilst trade agreements are not yet finalised following Brexit, there are still significant prospects for farming and the British food industry as a whole as the country tries to find its footing. There is talk of a much improved 2021 wheat harvest and also the ability to trade with countries outside of the EU which could bring with it some exciting opportunities for farmers. As funding becomes more focussed on the environment, rather than simply based on the numbers of acres farmed, the year ahead will prove pivotal when it comes to diversification and forward-planning and landowners should make full use of the various smaller grants on offer for any projects they may have in the pipeline.