Farms Must Look to the Future

Now that the BPS forms are submitted, it is important that farmers take stock, look to the future and spend time planning how to maximise their assets and move their farming enterprises forward.

Here, Thomas Armstrong, Associate Director with H&H Land and Property, highlights some key areas that farmers in the area should consider.

Thomas Armstrong

Thomas Armstrong

The farming industrys entering a challenging phase, the strengthening of the pound against the Euro is making exports less competitive and imports cheaper. The exchange rate will also reduce the annual Basic Farm Payment received by farmers and the anticipated delay in payments will have a significant impacts on farm cash flows.

It is therefore hugely important that farmers analyse their assets and determine what is working and what isn’t.  It is vital that any advantages are capitalised on in order to ensure that going forward businesses are sustainable and successful. Options are everywhere for farmers to take advantage of, but assessing their assets and utilising them  is something that should become a priority in the next six months in order to create a strong business that is ready for the future.

Countryside Stewardship Scheme, replaces the ending Entry Level Stewardship and Higher Level Stewardship Scheme, are you eligible for the new scheme?

Applications for the scheme run from July till September and come with significant cash grants if the government finds you eligible. Those with an ELS/HLS agreement that has already ended or is due to end in 2015 should be thinking now about applying for the new scheme due to the creation of a pipeline of applications run by Natural England for those they wish to see enter Countryside Stewardship.

Assess your on farm options for solar, hydro and bio-mass on farm

Renewable energy can be a useful way of generating funds for your farm with minimal effort, however it is also important to consider their impact and establish whether they are right for your farm. Grants are available to help farms enter the renewables market, so it is worth researching before you commit to a project. Due to recent changes in Government funding we have witnessed an influx in activity for solar sites and carefully consideration and negotiation is required from an early stage.

Sales, Acquisitions and Lettings - assess the rent you are paying or being paid, renting out more land and potential sales

If your business is ready to expand, it is crucial to assess the right path to do so for your farm. With land prices slowly climbing in the area it is now even more important that farmers establish whether buying or renting land is the best option for them.

If farmers are wanting to take a step back with their farming operations it is also important that the decision is carefully planned and well thought through. There are significant tax and legal complications that need to addressed by making sure the correct agreement is put in place.

Finance and funding- restructuring and refinancing existing debt and borrowings

Establishing your options with existing debt is crucial, if refinancing is a viable option it may help to reduce farm outgoings, allowing for further investment or simply strengthening the position of your business. When looking at finances it is important to use sound risk management in order to ensure that the outcome truly benefits the farm.

Utilisation and diversification of farm buildings by obtaining Planning Permission

Make redundant farm buildings generate an income for the farm. It is crucial to establish any underutilised resources your farm may have, your unused buildings may prove vital in capitalising on those assets. It may also be helpful to identify any unfulfilled demands locally and use empty buildings to branch into new areas of business, helping to generate new income streams to support the farm.

Succession planning have you planned for your future and future generations

In order to ensure your family and your farm is protected it is vital to first establish an accurate picture of the current position the farm is in, with assets, partnerships, borrowing arrangements and the current value of the farm all included. Establishing a family strategy that accounts for both retiring members and direction the new generation want to push the farm in is also helpful. With issues such as succession planning, it is vital that the strategy is detailed and takes in the opinion of all family members. Often it is easier to begin plans well in advance to ensure there are no surprises when succession becomes a real option.

HH Land

Related Links
link Share Farming Could be a Solution for Tenant Retirement
link Journalist Wins Funding to IFAJ in New Zealand
link RIDBA Warns Farmers on Health and Safety
link Big Tax Changes Afoot for Rural Businesses

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