A major survey of farmers and landowners by global property consultancy Knight Frank, halaid bare the true effect Covid-19 is likely to have on the UK’s rural and farming businesses, with 80% of farmers bracing for profit losses as a direct result of the pandemic, with 35% saying the impact is likely to be “significant”.
The estates relying mostly on traditional sources of income say they will be less affected, but the ones that largely depend on tourism or leisure expect to be badly hit by the knock-on effects of the global pandemic.
Just under 40% of those taking the survey said they had shut down elements of their businesses, while a similar proportion said tenants were struggling to pay their rents. Four in 10 confirmed they had furloughed staff as part of the government’s ‘Coronavirus Job Retention Scheme’, but only 3% reported making redundancies.
Somewhat reassuring, the report showed that only 8% of all survey respondents believed their long-term viability was under threat – and many are still making plans to expand or diversify their businesses, including tapping into concerns about the environment and climate change. Half plan to plant more trees, while almost 40% expect to dedicate more of their land to conservation.
Clive Hopkins, head of farms & estates at Knight Frank, commented: “Covid-19 has ruthlessly exposed vulnerabilities within the rural sector to diminishing cash flow. How economic recovery will look in 2021 is uncertain and now is the time for all businesses to look under the bonnet in a strategic way. However some positives will undoubtedly emerge. Real assets, such as land, will likely become increasingly attractive for investors, which is when farmland and forestry will come into their own.”
Andrew Shirley, Research Partner at Knight Frank, commented on the pandemic having increased the awareness and popularity of locally-produced food, with 64% of people predicting the trend will continue post lockdown.
He said: “The lockdown has clearly shown the many benefits that the countryside can offer, whether that’s promoting mental wellbeing with access to green spaces or supplying top quality food. However, when conducting trade agreements with the EU, US and other partners, the Government needs to ensure that the UK’s farmers can compete on a level playing field or those benefits could be lost.”