Understanding barriers to farm diversification

April 15, 2011 - PRLog -- However, as every successful business person knows, when you’ve spotted a gap in the market you need to move fast to take advantage of the opportunities. Alistair Millar, agricultural laywer at Tallents Solicitors in Southwell, examines some key areas, which every entrepreneurial farmer should be aware of when considering farm diversification schemes.

Says Alistair,

“Farmers are exploring many different non-farming activities such as commercial and residential lettings, retailing of farm produce, leisure facilities and tourism in attempt to supplement their income. However, farmers wanting to diversify can find several major barriers in their way, such as easements or restrictions on title, obtaining planning permission, securing finance and tax and inheritance implications.”

He continues,

“A solicitor will be able to check the freehold title or tenancy agreement to confirm whether there any legal restrictions or obstacles to overcome with regard to changing land use.

“Developing an old barn into residential or commercial use, for example, may require new utility connects, such as water, sewer, gas pipes or electricity cables connections. Never assume that the title will have express rights to access, renew, enhance, repair and maintain, or make connections to the mains supply directly. The situation can be further complicated if the connections will cross neighbouring land, requiring additional permissions.”

Commenting on planning permission, Alistair says,

“Obtaining planning consent can be both complicated and time consuming. Time spent with an expert in farm diversification creating detailed business plans and drawings can greatly speed up the planning process and improve the chances of the diversification scheme being approved by the local authority.”

In addition, obtaining additional finance can be an issue for farmers, says Alistair,

“Access to finance is a potential barrier, especially for tenant farmers. They can find it difficult to access capital as they may not have the same collateral available to them as owner farmers. However, there are several grants available for farm diversification, which are worth exploring. In addition the Farm Business Tenancy, part of the Agricultural Tenancies Act 1995, allows more flexibility for tenant farmers to diversify their activities.”

Farmers also need to look beyond the concept for diversification and understand how it may have a financial impact for many years to come. Alistair comments,

“One area which is often overlooked is how diversification can have tax and inheritance implications for the landowner. Any activity which changes the use of land to a non-agricultural purpose may cause issues when estate planning and its wider implications need to be considered at an early stage.”

Income from farm diversification is worth millions to the farming industry and farmers should take considered legal advice to ensure their plans are realized effectively.

Tallents has been advising the farmers and landowners of Nottinghamshire for more than 237 years and has a wealth of experience in dealing with successful farm diversification schemes.



/ENDS

For more information, contact Tallents on 01636 671881


Tallents Solicitors, 3 Middlegate, Newark
http://www.tallents.co.uk


ABOUT TALLENTS

Established in 1774 and with offices in Newark, Mansfield and Southwell, Tallents Solicitors services the legal needs of private individuals, company and commercial clients and farmers in North Nottinghamshire and Lincolnshire.

We still offer a personal service to our clients and our size and structure ensures that partners are never remote from our clients. We provide a full range of legal services and our expertise covers all areas of law including:

Agricultural law, criminal law, commercial and domestic property transactions, inheritance tax planning, trust and estate administration, wills and probate, commercial and general litigation, employment law, company and commercial law, intellectual property, matrimonial and family law, personal injury claims and children issues.

In 2009, Tallents celebrated 235 years, having served more than nine generations of North Nottinghamshire and Lincolnshire people. This makes Tallents one of the oldest law firms in the county and possibly the UK.



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