Food For Thought September 2016 | Page 2

that they are looking into the query. The RPA aims to complete the reconciliation work by the 15th October 2016, which is the end of the EU financial year. One the reconciliation payment has been made or recovered, a revised claim statement should then be sent out. There will be no correspondence sent out explaining why an error has occurred, it will be up to claimants to check the revised claim statement and look at their on line account to check that the changes have fed through. If at this point errors are spotted this needs raising again with the RPA. BREXIT – FUTURE FUNDING On the 22nd August 2016 The Chancellor of the Exchequer. Philip Hammond made a Treasury statement which included “The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, which play a vital role in our country. We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities”. This means that funding under CAP Pillar 1 will be upheld until 2020. This includes payments for BPS, BPS Greening and the Young Farmer Payment. The guarantee for Pillar 1 money does not cover payments made under Pillar 2 of the CAP. However, the Treasury announced that agri environment schemes signed before the Autumn statement would be fully funded. There were concerns that the UK withdrawal could potentially trigger use of “exceptional circumstances” clauses in existing agreements. We are still waiting for further certainty in respect of new Countryside Stewardship agreements that are currently being worked on and submitted for Mid Tier and Higher Tier applications, which would have a 1st January 2017 start date. This is because they may not be “signed before the Autumn Statement”. This now rests on when the Autumn Statement will be announced and Natural England and the RPAs ability to process applications. Therefore, applications that are currently being worked on may still be at risk of not being offered an agreement. Unfortunately, the date for the Au tumn Statement is still not known. When originally introduced, they were given in October. Recently they have been given in late November / early December. THE LAND AND PROPERTY MARKET Following the exit vote and the anticipated economic instability over the next few months, it is unlikely that the property market will remain unscathed in these uncertain times. However, industry experts still believe, that given the recent unpredictability of the financial markets, property will still continue to provide a stable, long term income for investors. The UK has one of the largest and most sophisticated property markets in the world and given this, it is likely that it will retain its appeal for major national and international investors, at least in the major conurbations. However, the rural property sector is likely to be impacted in the short term by a reduction in, or an end to the direct payments received by farmers and rural landowners, which may in turn impact on rents and land values. Falling commodity prices in some areas and over production in others will also have an impact. However, should sterling remain weak and rural land values fall, there could be the opportunity for further investment from wider markets. As far as the residential property market is concerned, we are anticipating a reduction in the number of sales going through and in the number of properties coming to the market, as those aspirational or lifestyle buyers hang fire and watch events unfold from the side-lines over the next 6 to 12 months. Mortgage lending appears to be carrying on regardless, but any tightening in lending criteria could again reduce participants in the market, particularly first time buyers (who have been more active of late) and those who are looking to make the next move up the property ladder. House prices are likely to be affected in the short to medium term and should the economy slow in the run up to the triggering of Article 50, house prices may fall further. We do however, still find ourselves in a market where there is simply not enough stock, be that existing or new-build and it is unlikely that this will change in the foreseeable future, as although the aspirational buyers may be sitting tight, people will still need to move as a result of changes to employment and personal circumstances. We are all watching this space! COMMODITY, LIVESTOCK PRICES AND MACHINERY COSTS – POST BREXIT Pre-Brexit there were concerns within the industry and growth had slowed due to the uncertainty of what the market would be like post 23 June 2016. The Brexit result forced the stock markets to tumble with a weakening of the pound to levels not seen since 1985. Short term this has worked in the agricultural sector’s favour in certain markets, as UK exports are seen as being more attractive to overseas buyers. Please note that the information contained within this update is subject to ongoing change. Before making any