Now may seem a strange time to encourage new entrants into farming, but for many the opportunities are really starting to open out. Starting out in farming is difficult for anyone, and their first steps will usually be trying to find some ground to rent or graze. Finding that first piece of ground can be hard unless perhaps you are already well known in the farming community and have the right connections.
So to help with those first steps, the National Fresh Start Enterprise Centre has a land partnership scheme which matches landowners in specific areas with graziers and farmers. More locally, there is a similar scheme called Restocking the High Weald in which Lucy Carnaghan effectively match-makes suitable graziers to landowners. If you are looking to start in farming, or expand your current business, it is important to show interest with land agents and other professionals in the area. Large amounts of land are let privately to local farmers who have approached professionals such as Batcheller Monkhouse privately. With impending changes to farm support payments post-Brexit we predict more land becoming available. This may imply falling agricultural income but new blood may well see ways to succeed and expand, perhaps focusing on direct sales of meat and other produce.
The first step
Agreeing a grazing licence is the usual way of farming your first piece of land. These are often done on what is fondly known as a gentleman’s agreement, being verbal. That is all fine all the time nothing goes wrong. Sadly life is not always that simple. We strongly recommend to both parties a written contract setting out the terms of occupation. Any written agreement would typically cover: the type of land occupation – i.e. lease or licence – length of term, level of rent and details of a rent review, basic payment scheme, insurance, what land and buildings are included and – perhaps the most contentious – the repairs and obligations, which cover buildings, fences, trees and the condition/use of the ground.
The form of agreement is very important in these situations and often a point that gets confused and muddled. There are differences between a licence and a tenancy which are important when considering complications or inspections from the Rural Payments Agency, and with regard to the landlord’s tax position.
A grazing licence is simply an agreement for a farmer to come on to the land and take the grazing. That is all – there is no right to claim the Basic Payment Scheme, carry out repairs/maintenance, spray, top or fertilise the land. All of the “management” must be carried out by the landlord or licensor.
Farm business tenancies
A tenancy agreement differs from a licence in that it is the tenant who has exclusive occupation of the land. The tenant is therefore eligible to claim the Basic Payment Scheme and takes on all of the management of the land, the growing crop and repairs – effectively looking after and farming it as if it were his own.
When dealing with disputes, there are often a myriad of arrangements between a landlord and tenant that either don’t reflect the original agreement discussed or which affect larger issues such as occupation rights for capital taxation or subsidy schemes.
In reality, though, how often does the land for licences and tenancies become available? The opportunities are there but quite often land is let privately through professional contacts. This highlights how important it is for a potential tenant or grazier to network with other landowners and professionals. The Heathfield and South of England Shows are great examples of places to meet up with professionals. The atmosphere is relaxed and it is a great time to explain what you are trying to achieve, what you farm and where you’re based. Batcheller Monkhouse does a lot of matching land with tenants, especially on the smaller pieces which are not marketed. We also work very hard with prospective landlords to allay any fears or concerns they have.
In some circumstances areas of land have been unmanaged for some time. Sometimes a larger, established farmer does not want the hassle of getting a piece of land back into management. But for a young farmer who wants to increase his sheep flock from 60 to 70 or just run 20 ewes, a licence or tenancy on that land could make a big difference.
The farming base
Once a new entrant is more established, he or she will want to develop a farming base. There are many advantages for them in owning at least a small parcel of land. This helps to establish them and can provide a springboard for even greater success in the future. At the very least this will provide an asset to help raise funds against for future expansion.
Blocks of land with buildings do come up for sale. It is important to think about the location, what you are buying and whether you will have the ability to expand from your base. There is no point in buying a small block of buildings and five acres if it is not located near to other land you farm, or you won’t have the potential to expand and take on further land surrounding that base.
Funding your purchase is not easy either, but most high street banks – such as Lloyds, Barclays and NatWest – have agricultural managers. There are also agricultural lenders such as the Agricultural Mortgage Corporation (AMC) which specialise in rural funding and will lend for up to 30 years at reasonable rates. Any lender will want to see an established business which has a clear ability to make repayments. To get established, many will have a secondary job alongside farming which can often be taking into consideration when looking at funding options. This may be providing specific contracting services on other farms – which will contribute to profitability as well as make use of any item of equipment purchased for the farm.
Buying this first piece of land may create opportunities there to invest in new buildings and, in time, even providing the ground on which to seek planning consent for a dwelling. For any farmer, being on site improves animal husbandry and the efficiency of the business. Batcheller Monkhouse achieved this for one farmer near Horsham, who had a large grazing enterprise. He secured a five acre field and within five years has made a successful case for a new dwelling to support the outdoor pig enterprise on this small acreage.
A successful outcome
Another example of this is Peter Morgan, who with his wife started farming on small areas of grazing land with some ewes. He was not from a farming family but his wife worked on a dairy farm. He started with a couple of fields which they rented from someone found by a friend. In 2005/06, he had managed to grow the business to buy a 90 acre block with some buildings on it as the foundation of his farm. He had a secondary business as a qualified engineer making steering mechanisms for boats, and this gave the regular income the banks wanted to see before he bought the land.
He is now farming about 400 acres at Bodle Street Green near Hailsham, and has just built a four bedroom house on site. He farms sheep, cattle and free range chickens.
Batcheller Monkhouse wrote the agricultural justification for Mr Morgan’s farmhouse. There was a strong argument because the Morgans needed accommodation on site for animal husbandry and biosecurity reasons, primarily as a result of calf rearing and having chickens. Batcheller Monkhouse also put together an AMC application for a loan which enabled the Morgans to build
their house.
Opportunities are there
In conclusion, there are good opportunities for new entrants to farming, albeit predominantly through means of tenancies and licences. It is essential to both landlord and tenant to ensure such agreements are correctly documented. Once established, further expansion, through longer term agreements or establishing a base on owned land, is very feasible.
Case study – New entrant farm opportunity
A perfect example of the opportunities that do arise is that of nearly 500 acres of farmland on one of the estates under our management. The Brickhouse Estate, in East Sussex, offered an extensive area of farmland with good buildings and residential accommodation in up to three lots. Whilst interest was sought from a wide sector in offering this in three smaller lots with housing and under a 10 year Farm Business Tenancy, the Trustees wanted to encourage new entrants and young farmers in particular.
