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HCR Law Events

5 March 2021

Future for farm land – all change?

The countryside has always offered an attractive option for investors and those looking to leave city life. Anyone with an interest in the rural economy should take an interest in the significant change it is undergoing.

Farmers have had much to contend with of late: challenging weather patterns, Brexit, and Covid-19 to name a few. However, it is the law relating to the business of farming and land management that is the real, once in a lifetime change, with the Agricultural Act 2020 and the Environment Bill heralding a whole new framework for the future.

Between them, these pieces of legislation revolutionise the way in which farmers are funded and introduce a system of managing land to produce tangible benefits to the public and for environmental gain.

The business of farming was, until Brexit, funded through the Common Agricultural Policy with payments made under the Basic Payment Scheme (BPS). The government has pledged to continue these until 2027, but no further. In their place will come Environmental Land Management schemes (ELMs) which will see landowners paid for delivering “public goods” such as clean water, better soil health, biodiversity and water and flood management. Exactly what these schemes will look like is as yet unclear. BPS payments will gradually reduce between 2022 and 2027.

This will radically change the bottom line for many landowners. We are encouraging all our farming clients to review their businesses and focus on how they will meet the demands of this new landscape. For most, food production will remain at the heart of what they do. Many farm businesses have also diversified towards tourism or events, for example, but the new focus will be on delivering wider environmental benefits.

Changes have been made to certain elements of the surrounding law to enable this, in particular promoting new entrants into farming and ensuring that tenant farmers are as able to access new forms of funding. Some farmers may decide to take up the offer of early retirement by taking a lump sum of their diversity payments in 2024, paving the way for the next generation.

We see exciting times ahead for the rural economy. We have a wealth of experience in advising today’s farmers and landowners, or those seeking to become part of rural life. We have been actively involved in some of the surrounding policy consultations and discussions, as for us it is vitally important that the new framework delivers a vibrant future for the rural economy with effective land management and farming at its heart.

Look out for details of our Future Farming Forum in May 2021, which will be published shortly.

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About the Author
Esther Stirling, Partner, Head of Agricultural Dispute Resolution

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