The rural estate extends across the UK and includes arable and livestock farms, forests, quarries, commons and residential properties. In 2005/06, the gross revenue contribution increased by £0.7 million to £16.1 million and the capital value increased by 8.8% to £673 million, an impressive performance given the challenges experienced by the rural economy. Depressed commodity prices and high input costs, especially fuel, have made for a difficult year for the agricultural industry.


Serious delays in the Single Farm Payment have had a considerable impact on the cash flow of many of our farming tenants and we have sought to be as flexible as possible where this has caused particular difficulties for individual businesses.

Our success has come from innovative asset management and working in partnership with our rural customers to develop alternative economic activity. The market for added value products, sold directly to consumers, is strong and we have encouraged new ventures across the country. Revenue has been boosted by increases in our mineral assets and we have realised new mineral reserves on our Applegirth estate and through the purchase of an operating limestone quarry at Cauldon Low in Staffordshire.

In the autumn, Nick Harper was appointed as our new Head of Asset Management and Development and he will be working closely with our managing agents as we remain a committed long-term rural landowner, but seek to rebalance our portfolio for strong long-term revenue and capital performance. In consequence, investment activity has led to a number of acquisitions and sales across the rural estate.

The largest deal this year was the purchase of the Ashby St Ledgers estate in Northamptonshire. This estate of 945 hectares (2,337 acres) comprises conventional and organic arable farming, an organic dairy farm, woodland, residential properties and a game business marketing produce under the Ashby St Ledgers brand. This mixed-use estate is an excellent example of integrated land use including the supply of high quality goods into expanding markets. We have also achieved sales of around 700 hectares (1,750 acres) of bare arable land on the Ewerby estate in Lincolnshire, as we focus our investment on rural land holdings that will deliver long-term financial performance and good strategic opportunities.

Given the pressures on UK agriculture, we are helping our tenants to diversify into other activities where it is viable and appropriate to do so. Woodhouse Grange Farm on the Derwent estate in Yorkshire is an example where we have worked closely with our tenant, Nicholas Hobson. The farm has a traditional dairy herd, merged from three smaller herds to improve efficiency. Nicholas has expanded his potato growing business, and in response to CO₂ emission reduction targets for power stations, he is drilling 150 acres of miscanthus for use as bio-fuel at the nearby Drax power station. In the last year, redundant farm buildings have been converted into commercial units, with office space for 60. We have worked in partnership with Nicholas and his family, sharing the risks and rewards of the project. This is one example, amongst many, where such an approach contributes towards a vibrant rural economy bringing benefits to both the business of The Crown Estate and the livelihoods of our customers.

Our commitment to customer service includes regular reviews of the performance of our managing agents. This year we tendered the management of our West Country estates. Smiths Gore were successful and are now responsible for farm, residential and commercial property on the Taunton, Dunster and Bryanston estates totalling over 10,000 hectares. Knight Frank have been appointed to manage the West of Severn estates that comprise mixed arable and livestock land.