Why the need for change?
As has been well reported, the Basic Payment Scheme (BPS) is being phased out and farmers are facing between a 5% and 25% reduction in payments for this year alone, with further cuts ahead. Even with the new BPS progressive reductions calculator available on the government website, the amount to be received from this income source is uncertain over the coming years.
What are the opportunities?
New financial support streams are on their way, which will reward farmers for “public goods”. And, of course, Brexit has created the opportunity to explore new markets, which could lead to new income streams for farmers and landowners.
What could this mean?
What is clear is that these opportunities may not be ideally suited to the way businesses are presently set up, and the future is likely to see landowners restructuring businesses or combining parts of them to gain mutual rewards.
Specialist markets and new income streams are likely to mean diversification. This, in turn, may mean separating out the risk involved in new ventures alongside collaboration with others to share knowledge, resources and time.
As well as considering the structure of individual businesses, arrangements like joint ventures and share farming agreements are likely to play a more important role.
This will be necessary due to the Government’s emphasis on environmental schemes involving natural capital, such as biodiversity and carbon capture schemes. The more land invested the more lucrative such ventures can be.
The horizon at present is ever-changing and as such it seems important to be aware of the need for adjustments and flexibility in the future.
Wilkin Chapman solicitors can help with contracts, agreements, or business structures to support realisation of plans to adapt for future success. A great place to start is the online health check for your business at https://www.wilkinchapman.co.uk/sectors/agriculture-food
Sarah can be contacted by email at [email protected] or 01482 398398.