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Buying, selling and letting farmland during the agricultural transition

04 April 2024

English agriculture is in the middle of a major transition, with some of the biggest changes to farming practices and farm payments seen in over half a century. Our experts look into how buying, selling and letting farmland could be affected.

When buying, selling or letting farmland, the ongoing changes to the schemes, policies and grants on offer need to be carefully considered.

Whilst detail is still emerging, here is what we know about the impact of some of the changes.

Delinked payments

  • Replacing the Basic Payment Scheme (BPS), the first ‘delinked payments’ are to be made later this year and will gradually reduce until a final instalment in 2027
  • Delinked payment recipients do not need to be farming, or own any land or entitlements; instead, they must have applied for BPS in the 2023 claim year, with their payment amount determined by their reference data for 2020-2022
  • From 15 February until 10 May 2024, 2020-2022 BPS reference data – and thereby (a share of) the delinked payments – can be transferred from one business to another, subject to certain conditions. However, those who accepted a Lump Sum Exit Scheme payment can’t transfer their reference data
  • New buyers/tenants are also unable to receive delinked payments, making the availability of other schemes increasingly important.

Countryside Stewardship Scheme (CSS)

  • These schemes incentivise farmers and other landowners to take positive environmental action, with a typical agreement lasting between three and five years
  • When transferring land subject to a CSS, a buyer and seller will normally demand of each other that they have complied/will comply with the terms of the agreement in place. Either could indemnify the other against any loss suffered as a result of any breach
  • The sale contract will need to address whether the payments are to be retained by the seller, transferred to the buyer or apportioned between the two parties
  • There are further procedural requirements demanded by the Rural Payments Agency (RPA) that both parties will need to consider.
    Sustainable Farming Incentive (SFI)
  • These newly launched three-year SFI agreements encourage farmers to adopt and maintain sustainable practices. Farmers can sign up for various ‘actions’, with each action performed in exchange for a payment. The amounts received for each action depends on the nature of the action performed
  • Around fifty new CSS/SFI actions were announced – and 50 updated – at the start of 2024, with more than 180 projects expected to be on offer by the end of this year
  • Though they run alongside the CSS and have many similar characteristics (and therefore considerations), a SFI can be entered into by a tenant without landlord consent
  • A tenant who expected to retain management control over land for the required three-year period can leave a SFI without penalty if an unforeseen ‘change of circumstances’ has occurred.

Woodland creation

  • With agreements typically lasting between 10 and 30 years, these funds/grants provide landowners with financial and advisory support for the creation and maintenance of woodland
  • Buyers and sellers of woodland will want to account for the same considerations as for a CSS/SFI above, and should also contact the Forestry Commission to advise on the impact of any transfer
  • Landowners can also enter into a Woodland Carbon Guarantee to sell ‘carbon credits’ and earn additional income
  • Many tenancies will prevent a tenant from entering a woodland creation scheme or a CSS, however.

With the agricultural landscape changing faster than ever before, it is important to receive expert guidance on the legal implications of transferring or taking over land subject to these – and other – agreements.

Whether you’re looking to buy, sell or let farmland, we can help guide you through what the new farming policies and payments will mean for you.

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Our Legal 500 and Chambers-rated agriculture & estates team help businesses or individuals operating in the rural sector, advising on a broad range of challenges that may arise.

Disclaimer: All legal information is correct at the time of publication but please be aware that laws may change over time. This article contains general legal information but should not be relied upon as legal advice. Please seek professional legal advice about your specific situation - contact us; we’d be delighted to help.
Adam Hale BA (Hons), TEP, FALA
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