9165 - BM Outlook 2022 R6 - Flipbook - Page 6
Notice to quit
The Government’s plan to treble tree
planting in England to meet a UK-wide
target of 30,000 hectares (74,100
acres) a year by 2024 raises alarm bells
regarding the termination provisions of
an AHA tenancy.
Farm Business Tenancies
Clauses outlining what both landlord
and tenant can and can’t do regarding
the delivery of biodiversity net
gain, carbon sequestration, carbon
offsetting and the plethora of future
schemes will require careful review in
future tenancy agreements.
From a landlord’s perspective, the various
business strategies and proposed
collaborations emerging off the back of
the environmental agenda are significant,
but these carry an associated risk. If the
tenant engages with such third parties,
assignment or subletting could soon arise
between tenant and third party, affecting
the landlord’s interest. In addition, the tax
treatment as a result of what is arguably a
change in land use away from agriculture
is not inconsequential and needs to be
reviewed closely.
Equally, however, as tenants continue to
feel the effect of reducing BPS payments,
these additional sources of income will
become more crucial than ever, to sustain
a viable business in some cases, and
landlords need to recognise this and
support tenants as they navigate this
new approach to agriculture.
If tenants are to continue to invest and
improve a holding, they will need future
security, and the hope is that landlords
will help provide this. A starting point must
surely be the length of tenancies, which
must be extended beyond the existing 3.8year average term for bare land.
Environmental grants
and schemes
Beyond the landlord and tenant focus,
the extent to which initiatives such as the
Local Nature Recovery and Landscape
Recovery schemes can deliver depend on
the long-term commitment of large land
areas. This further enforces the need for
longer term farm business tenancies to be
offered to ensure these schemes do not
exclude tenants.
On the same lines, the England Woodland
Creation Offer has recently announced
that landlords will not be able to apply on a
disputed Notice to Quit. This is a welcome
acknowledgement that landlord and
tenant need to cooperate and collaborate
where possible to maximise potential
opportunities as they continue to arise.
Charlotte
Pearson-Wood
Partner,
Tunbridge Wells
Farming in the current climate is not
for the faint-hearted. As Charlotte
Pearson-Wood pointed out, the
industry is facing “a sea change in
what farmers are being asked to do
and how they are expected to do it”.
No longer can they simply grow crops or
keep livestock to the best of their ability
while relying on Basic Payment grants
(BPS) from the EU to make sure the books
balance at the end of the year. Instead,
they must evaluate new opportunities,
make important decisions and focus on
their impact on the environment as well
as on the upcoming harvest.
Delinked Payments
From 2024 the Rural Payments Agency will offer delinked
payments, meaning those who previously received Basic
Payments will now not have to farm the land or have entitlements
in order to receive the payment. The Basic Payment Scheme will
finish at the end of 2023 and the delinked payments will then be
made from 2024 to 2027, when they will be phased out.
The aim of delinked payments is to simplify the system for
farmers and allow them more time to run their business
effectively and concentrate on delivering public goods through
the new schemes being rolled out, such as those under the
Environmental Land Management Scheme.
4 | Outlook
It's a challenge, but one the majority of
farmers are more than able to meet if they
evaluate their strengths, stay abreast of
the new regulations and opportunities and,
importantly, take the right advice from
their professional team.
As Charlotte explained: “It’s about
more than just diversification. This is a
whole new journey for farmers and for
agriculture, and individual farmers are at
different stages on that journey.”
“Farmers are facing massive changes,
with the transition to Environmental
Land Management Schemes (ELMS), a
move towards regenerative agriculture,
carbon storage, biodiversity net gain and
water and nutrient neutrality just a few of
the challenges – or opportunities – out
there,” she commented.
“Forward thinking businesses have
already done their budgets, analysed their
strengths and worked out what works for
them and what doesn’t. Some, though, are
still running their farm the way they have
done for 50 or 100 years, and that won’t
wash as we move forward.”
The Government is using ELMS and the
Agricultural Transition Plan to insist on
a more environmentally aware approach
to farming, with ‘regenerative agriculture’
top of the agenda for many. “The need
to focus on the environment has added
another layer of complexity to the
business, but it’s not something farmers
can ignore,” said Charlotte.
The crucial thing, in Charlotte’s view, is
for farmers to undertake a full analysis
of their business so that they understand
what opportunities could work for their
farm, what makes money, what doesn’t
make money and what grants and support
they should be taking advantage of.
Agriculture | 5