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Enhancing the Changes in Agriculture – Your Business Choices
The current changes in agriculture will be the most significant changes over the last 50 years. With the reduction of the subsidy payment your current business choices are fundamental for the future of your farming business. However, it is important to look at the business rather than craving a BPS substitute.
Looking at what can be controlled and where value, reward and risk lie is very important. For some businesses this may be achieved by good farming and cost control, for others opening up new income sources will be far more beneficial.
What are your business intentions & plans – are you looking at the right opportunities?
Government Environmental Schemes – schemes shouldn’t be viewed as if they were a lifeline or necessity but for what they can do for the farming business, if they can do. They are designed for change even if offering less profit than the BPS. These should be judged on the merits they provide to individual farming businesses rather than merely profit. This can include options to aid with black grass mitigation or improving soil structure, to name a few.
Biodiversity net gain – does ‘carbon bank’ mean money? There are private schemes available to implement farming practices that can increase the amount of carbon dioxide that is sequestered into the farmland soil. As the carbon builds these can be verified into the form of carbon credits, which are purchased by companies to offset their carbon footprint.
Renewable Energy – the demand for electric is ever increasing and consequently land which has a close connection to the grid is valuable for solar panels schemes. Offering a valuable income to landowners. However, don’t rush a long term commitment and ensure you do seek advice.
Share farming, contract farming and joint ventures – these can offer opportunities to share resources (whether they be people, land or machines) and reduce overhead costs.
Planning & Permitted development rights – if you have some unused / surplus farm buildings, the current PDR’s offer a good route for conversion. Class Q offers the ability (subject to conditions) to convert traditional farm buildings into up to five houses, which could be suited to holiday occupation or sale disposal. Class R (subject to conditions) allows agricultural buildings to be used for commercial use. Providing self-storage is an increasing commercial enterprise farmers are diversifying into.
We would encourage everyone to examine all aspects of their farming business to identify areas of opportunity. From here, prioritise the best opportunities and implement a method of change.
If you would like advice on reviewing your business choices, please do not hesitate to contact our team of qualified and experienced professionals at either Stephensons Rural or Boulton Cooper.