How is the North East agricultural sector adapting to a changing world?

Nourishing the lives of millions every year, the North East farming sector is a crucial cog in the country’s economic wheel. And with watershed environmental change sweeping across the industry at a time of wider climate awareness, its significance is primed to rise yet further.

Here, in a roundtable discussion held by North East Times alongside independently-operated insurance broker Lycetts and learning provider Education Partnership North East, farmers, business leaders and agricultural sector experts set a blueprint for future success.

Words by Steven Hugill
Photography by Angela Carrington

 

WHAT IS THE PRESENT PICTURE ACROSS THE REGION’S FARMING LANDSCAPE?

Red. Green. Blue.

Primary colours for a primary cause.

Headlights jabbing through grey skies, engines jolting neighbourhoods with a foreign sound, the battalion of red, green and blue tractors rolled in regimented formation.

Their drivers carried different national flags. They held different signs.

They spoke different languages. They blocked different roads behind the wheel of different marques and models.

But they were one, an army of farmers united in protest across Great Britain and the European mainland at restrictive legislation, cheap imports and burdensome environmental plans.

Yet for all the eye-catching scenes of hulking machinery halting topless tourist buses and car-bound commuters, the North East’s agricultural sector, said Angus Nelless, who farms livestock at Longhorsley, near Morpeth, Northumberland, has a much more sanguine feel about it.

Indeed, spotlighting the replacement of the Basic Payment Scheme – which long subsidised farmers’ incomes through calculations of land and its use – with Environmental Land Management schemes designed to help meet climate change and conservation goals, he said the next decade stands to be “one of the most exciting we’ve had”.

 

• Louis Fell, middle, with Claire Gibson, left, and William Nicholl, right

 

He added: “There are a number of reasons to be optimistic, not least the end of the Basic Payment Scheme, which wasn’t really doing a job for anyone.

“With that gone, we have control to develop schemes and payments to benefit more people.”

Support came from Angus Collingwood-Cameron, lead consultant at representative, lobbying and advice body Northern Farmers & Landowners Group.

He said: “With biodiversity moves and measures to reduce carbon, opportunities presented by regenerative farming and renewable energy, greater focus on the importance of food security and a booming tourism sector, we are in a really optimistic place.”

 

JUST HOW SIGNIFICANT IS THE CESSATION OF THE BASIC PAYMENT SCHEME, AND WHAT FRESH OPPORTUNITIES WILL ENVIRONMENTAL LAND MANAGEMENT SCHEMES PRESENT?

November 2020 was hardly a stable time for British politics.

With COVID-19 continuing to blanket the country, policy beyond tackling the pandemic was, at best, blurred in a fog of confusion.

One notable measure to emerge from the mist, however, was the Agriculture Act, which promised to “empower farmers and land managers (to help them) stay competitive, increase productivity, invest in technology and seek a fairer return from the marketplace”.

And having survived the health crisis – and the subsequent Prime Ministerial merry-go-round – roundtable members agreed the legislation provides great opportunity for watershed change.

Louis Fell, a director at Ellingham-based land, property, energy and business support organisation Brockthorpe Consultancy, said it will reset the dial across both mindset and methodology.

He said: “Farmers using the Basic Payment Scheme were a little like a child on Calpol; once they got a taste for it, they wanted to keep getting it.

“And it propped up a lot of inefficient businesses.

“But with Environmental Land Management schemes, there is great opportunity for farmers to expand their enterprise, by looking after the flora and fauna and protecting wildlife.

 

• Ellen Thinnesen with Ross Lowrie, right

 

“And with DEFRA having substantially increased payment rates, environmental management has become a very viable proposition.

“As a farmer, if you’re growing crops or producing animals, and you also have an environmental benefit attached to your business, you will be much more successful and resilient.”

But Louis warned the transition will only truly succeed if Westminster, so long a churning pot of policy, provides a prolonged period of permanency.

He added: “We must give farmers long-term stability, so they can make plans regardless of whether it is Labour or the Conservatives in power.”

He was backed by Helen Pennock, a partner at accountancy and business advisory firm Ryecroft Glenton, who urged greater clarity on the financial implications of change.

“While a lot of opportunities have presented themselves from the decline of the Basic Payment Scheme, financial challenges remain,” said Helen, who leads the Newcastle, Northumberland and Whitley Bay-based company’s agriculture and landed estates service.

She added: “HMRC has introduced basis period reform, which means that regardless of any accounting year-end, businesses will be taxed on the income they earn in a tax year.

“The transition year will be April 5, 2024.

“For those that have a year-end of March 31, that doesn’t matter, but those with an April 30 year-end are effectively going to be taxed on two harvests, which is going to cause cashflow issues.

“The Government has also not confirmed how its environmental schemes are going to be taxed.

“There are encouraging signs the Finance Act 2025 will extend the agricultural property relief definition to include these schemes and the land that will be used.

“But that isn’t enough – there are still a lot of unknowns.”

 

HOW CAN THE REGION’S AGRICULTURAL SECTOR HARNESS THE POTENTIAL AFFORDED BY ENVIRONMENTAL LAND MANAGEMENT SCHEMES WHILE SUPPORTING THE UK’S WIDER CLIMATE GOALS?

Right from the days of smoke-belching Industrial Revolution factories has the atmospheric thermometer been nudging higher.

Only recently, though, has the world begun to take earnest note.

Yet while action is increasingly forthcoming, the multi-generational lag between acknowledgement and activity means pointed change remains a challenging goal.

Roundtable members, however, spoke of great potential to narrow the divide.

Pointing to the area’s renewable energy prowess, Ross Lowrie, principal manager for net-zero and low-carbon growth at the mayoral-led North East Combined Authority, said scope exists to create a similar blueprint and drive world-leading action.

He said: “We have an opportunity to lead the climate change transition.

“The North East is very possibly the best place in the world when it comes to climate change, because while we will face future water shortages and flash flooding, data shows the effects will be felt much more keenly to the north and south of the region.

“I also can’t think of anywhere else in England with more opportunity when it comes to things like peat restoration and tree and hedge planting.

“And we’re already spearheading world-leading innovation; in Northumberland, for example, basalt rock dust is being scattered on land to suck out carbon dioxide and improve soil while farming continues around.”

Ross added: “That’s why, as a combined authority, we’re developing a rural, coastal and environmental portfolio that contains agri-tech and climate adaptation as areas of focus, which hook into skills, innovation, the supply chain, infrastructure and investment.

 

• Angus Collingwood-Cameron and, left, Charlotte Patterson Ryan

 

“There is huge opportunity for money to flow into this region while the land continues to be farmed.”

Ross found support from Chris Heathcote, director at Regenerate Outcomes, which is supporting Northumberland farmers to boost profitability through measures that include soil health improvement and biodiversity.

He said: “Farmers must be more profitable, more sustainable and less polluting to survive.

“Carbon in soil is absolutely essential to that, because it holds more water and therefore increases resilience to climate spikes, but we’ve been burning it, through intensive farming, since the Second World War.”

James Jackson, chief investment officer at True North European Real Estate Partners, whose portfolio includes a focus on sawlog production, concurred.

He said: “Forestry is probably one of the cheapest ways of sequestrating carbon.

“As long as it isn’t burnt, and the end product is used for things like housing, it is a cheap way of storing carbon.”

He added: “The region’s scale is a huge asset; it provides an opportunity to do more sustainable and locally-produced food, through measures like vertical farming, and we’re very close to the sea, and therefore sea kelp, which also helps with carbon sequestration.”

 

IMPLEMENTING SUCH MEASURES, THOUGH, WILL NOT BE WITHOUT CHALLENGE. WHERE ARE POTENTIAL AREAS OF CONCERN, AND HOW CAN THEY BE SURMOUNTED?

Approaching the subject from an indemnity perspective, William Nicholl, client director at independently-operated insurance broker Lycetts, warned questions remain unanswered.

He said: “Rural insurance is principally around insuring against weather events, and the influence of climate change is making events much harder to forecast; it is also driving reinsurance costs, which is increasing underlying premiums exponentially, particularly in high risk areas.

“And we need to know more about insuring carbon,” said William, who advises landowners, farmers and private clients nationwide.

He added: “There are the makings of a tradable asset, but we don’t yet have formal regulation that will allow us a finite, quantifiable carbon market to insure.

“Furthermore, if crops fail, can we insure that exposure?

“At the moment, it feels like we’re on a waiting brief.”

William was backed by colleague Nick Straker, a Chartered financial planner within the financial services team at Newcastle-headquartered Lycetts, who raised concerns over a lack of sufficiently strong marketplace guidance.

He said: “For the existing small and medium-sized farmer, it is really difficult because they can’t do these things themselves.

“The danger, though, is that they seek advice from industry, which then takes the benefits of anything they do.

“And I worry about those farmers putting the land back to what it was, because that means smaller fields and smaller farming.”

 

• Will Dodd, middle, watched by Chris Heathcote, left

 

Charlotte Patterson-Ryan, a partner in Newcastle-based law firm Muckle LLP’s agriculture, estates and private client team, took the discussion further.

Highlighting the Government’s Sustainable Farming Incentive, which rewards practices that produce food in a more environmentally-friendlier way, she warned relationships between tenant farmers and landowners could become frayed as the latter conducts a “take-back”.

She said: “The incentives are a creeping challenge for tenant farmers.

“I know one who, when his tenancies were renewed, lost 900 acres of active farm, because the landowner took the land back to put into Government schemes and receive subsidies.

“That acreage amounts to 3000 tonnes of food he won’t be able to produce, which equates to making two staff redundant because there won’t be the work.”

Ed Dungait, who combines work on his family’s farm in Stannington, near Blagdon, Northumberland, with time as council chair of the National Federation of Young Farmers’ Clubs, called for balance.

He said: “If the landlord is greedy, and the tenant is old-fashioned and can’t adapt, then things are going to fall down.

“But if they are forward-thinking, then they will be able to work together, and work really well for the region.”

 

THE FARMING SECTOR, FOR MANY, IS A PREORDAINED CAREER, WITH OPERATIONS PASSED DOWN THE GENERATIONAL LINE. BUT SUCH TRADITION ALSO RISKS A CONTINUATION OF HISTORICAL ATTITUDES. HOW IMPORTANT ARE FRESH PERSPECTIVES TO THE INDUSTRY’S FUTURE?

Look up the chapter offering business growth tips in any 101-style guidebook, and you’ll quickly arrive at a section sprinkled with sub-headings that include innovation and succession planning.

The farming sector, though, warned roundtable members, has existed too long in a siloed echo chamber, wherein the status quo continues to resonate loudest.

William said: “There is still huge resistance to change.

“Broadly, on a farming front, the owner remains the same owner and there is a lack of generational change.”

 

• Ed Dungait, middle, with Angus Collingwood-Cameron, left, and Lee Lister, right

 

Louis added: “We’re facing a challenge – and will for a while – around the fact that too many farmers don’t have proper retirement plans.

“They say, ‘I’ll be fine when I retire, because the farm looked after my father and his father too’.

“But they’re living 20 years longer than their grandparents did, and the business simply cannot afford it.”

Ross warned stagnant attitudes pose a major risk to future climate action.

He added: “We need a positive vision for farming, and that will come from a vibrant, younger workforce, which will be able to manage and employ the new environmental techniques and approaches we need.”

 

HOW CAN THE FARMING SECTOR ATTRACT AND RETAIN FUTURE GENERATIONS?

A business is only as strong as the people it keeps.

And if the farming sector is to truly fulfil its potential in the post-Basic Payment Scheme landscape, roundtable members said it must nurture today’s crops and animals while also remaining mindful of cultivating tomorrow’s workers.

Charlotte called for greater action at grassroots level – highlighting the work of the Country Trust charity, which holds regular school farm visits and countryside residentials – to introduce children from all backgrounds to the agricultural sector at an earlier age.

She said: “Country Trust looks at inner city schools with high proportions of free school meals, and brings their children to working farms to experience a rural economy.

“It provides children with an amazing experience to learn where their food comes from, an opportunity they would never otherwise have received.”

Lee Lister, campus principal at learning provider Education Partnership North East’s Kirkley Hall Campus, near Ponteland, which operates as part of Northumberland College and includes a commercial beef and sheep farm and a specialist sheep management centre, agreed.

He said: “We must ignite a passion in young people, through impactful school engagement and ensure agriculture and other land-based disciplines are seen as a great career choice after compulsory education.

“And it’s very important we do so, due to the evolving skills priorities in the land-based sector, which provide real opportunity, along with the challenges faced in education and industry.

“There were 50 specialist land-based colleges across England in 1980; today there are ten, which is due to the changing landscape of education and the complex and diverse operations seen in specialist land-based colleges.”

He added: “We’re playing a key role in delivering change, with a transformed skills offer and high levels of technologically-focused investment.

 

• William Nicholl and Ellen Thinnesen

 

“Nationally, we are the second top performing college in the country for agricultural achievement, and we are first in terms of achievement for both young people and adults in the north of England.”

Ed called for greater avenues to help younger farmers broaden their skill sets, including those who have already attained university qualifications.

He said: “I’ve got a degree in agriculture, but I still have very little training in business management.

“I learned some basic business skills through my degree, but without studying farm business management, you don’t learn how to run a business.

“And that’s important because we have a generation of people keen to action change through new regulations and diversification, but who might not have the skills to adapt their business to the next level.”

He found support from Ellen Thinnesen, chief executive at Education Partnership North East – which also includes Sunderland College, Hartlepool Sixth Form and EPNE Learning, and recently gained planning permission to create a £50 million-plus, ultra-low carbon Ashington campus that will act as a ‘pathfinder’ prototype for English institutions to follow.

Ellen advocated greater collaboration between farming and further education.

She said: “We don’t see enough reciprocal agricultural/skills partnerships in this region; I would willingly support, with funding, a strategic farming partnership that incorporates activities to accelerate the pipeline of next generation farmers through placements and agricultural projects.

“There is an option for Northumberland College to support farmers and small businesses through a dedicated business support centre; a further option exists to have learners, who are studying relevant courses, to assist with small business needs.”

The discussion was taken on by Will Dodd, a Hexham Auction Mart director who also farms at Belsay, near Ponteland, who said a rise in skills and associated technological understanding would not only boost farming output and environmental goals, but create greater prosperity, which would bolster farmworkers’ pay packets.

He added: “The sector has always been seen as a low reward, low wage industry.

“But profit equals investment, which means we could pay staff a decent wage, and attract individuals to an industry where there is an increasingly better work/life balance, with seven-day, 100-hour weeks now gone for a lot of people.”

 

BUT ARE EXISTING REGIONAL PATHWAYS SUFFICIENTLY STRONG ENOUGH TO DELIVER A ROBUST SKILLS PIPELINE?

According to latest Government figures, North East farms provided direct work for 10,123 people in 2023, which was comfortably the lowest regional share across England’s combined 292,401 workforce.

And Ellen raised worries the divide would endure without significant prioritisation of capital investment into land-based colleges to support a skilled workforce necessary to transform the sector, and create both a national rural strategy and a regional skills strategy.

To aid such, she revealed Education Partnership North East is ploughing furrows to seed the next generation.

Spotlighting its Kirkley Hall Campus, Ellen said: “It’s vitally important we look upstream to ensure we have a pipeline of skilled people.

“And we’ve invested £9 million into Kirkley Hall over the last four years to do just that.”

Claire Gibson, Kirkley Hall’s land-based curriculum manager, added: “We’ve transformed our farm, agricultural resources and curriculum, and are delivering on agriculture, animal livestock management, veterinary science, forestry, land management, conservation and ecology.

 

• Helen Pennock and Angus Nelless

 

“Furthermore, we’ve set out a £45 million capital plan for the next ten years – and are working to secure backing from funders – which includes an agritech centre, a regenerative farming hub and a specialist university centre at Kirkley Hall, to advance our rural higher education portfolio.

“We’re also one of eight colleges working with the Department for Education to help shape future national funding policy, and will be trialling innovations in apprenticeships and bootcamps from September.”

However, while acknowledging the importance of generating and retaining talent in the region, Angus Collingwood-Cameron urged an acceptance of people wishing to explore environments beyond the North East.

He said: “We’re very good in this region but we don’t know everything, and we mustn’t fret when our young people leave.

“It is so important they gain experience somewhere else in this country or indeed across the world.

“And they will come back; this region has a unique magnetic pull on its young people.

“Let them go and learn, and then bring knowledge back with them.”

 

SO, WHAT DOES THE FUTURE LOOK LIKE FOR FARMING IN THE NORTH EAST?

While accepting trial and tribulation will remain forever stitched into farming life, Angus Nelless nevertheless set a bullish tone. 

He said: “I think we’re in a great position to lead the charge on agroecology and put evidence out there that it’s starting to work.

“Baselining the evidence is really important; if we can see the amount of carbon that is being sequestrated, that biodiversity is increasing, that the landscape is improving and that we are still producing food, then there is a lot we can achieve.”

Will said: “We have very good stock and arable production, and are not unheard of across the holiday cottage industry, either.

“We’re in a strong position.”

Chris added: “The region has fantastic farmers, who are looking to do right by the land.

“And that is a real selling point.”