CHARTERED SURVEYORS, LAND AGENTS, ESTATE AGENTS, COMMERCIAL AGENTS, LETTING AGENTS, RICS REGISTERED VALUERS
Are you Brexit Ready?

 

Now Article 50 has been served, and an election called, we can be sanguine that change will be the only game in town – and perhaps more so in the countryside.

Farmers and land managers have been here before, but it has been at least a generation since the prospect of a fundamental change in support for farming has been so close.

For farmers left in the EU, the signals are clear: there are tabled proposals for a 30% cut in CAP budgets from 2020, which - with the demand for a fairer share of the payments by newer entrants - will almost certainly lead to a larger cut than this for our near neighbours.

We cannot expect HM Treasury to do other than take the lead from the CAP. While we will have a British Agricultural Policy, the intelligent farmer will be anticipating it not paying more than £50/acre, and perhaps less.

Moreover, with siren calls from the green lobby and the National Trust, the NFU and CLA will be hard put to ensure that the conditions attached to the payment are not at least as onerous as GAEC, and perhaps closer to compulsory ELS.

On the plus side, we should at least be reasonably certain that we will keep Glyphosate, probably do away with the three crop rule, and perhaps some other bits of red tape, but the protection of the environment will not go away.

So what does the intelligent farmer do now, with about 30 months to go?

We have been working with farmers and landowners for 274 years, and our advice has helped generations of rural people survive and prosper over that time.

We suggest that the starting point should be an early and hard headed critical analysis of the property and the people that work on it. Such an approach, designed to highlight the weaker and stronger elements of the business and tease out any unrealised opportunities can help provide the basis for a survival plan.

In particular there is a need to look at the mix of enterprises and how they are performing compared to each other and to competitors, what assets (land labour and money) are required by each and what return they show on these, and whether any assets might be redeployed to better effect.

We are fortunate in the South East that property values will underpin the net worth of a farming business, but it will pay to look at the cost of any debt (the next rate changes are likely to be increases) and whether it might pay to reduce or write off borrowings – or at least fix the rate.

Finally we advise that inter- generation issues are addressed, and that tax planning is put in place (a hefty tax bill can undo the best business plan).

The recipe will be different for each and every farming or landed business, and sound professional advice can help secure the future.

Oliver Harwood is a Partner at RH & RW Clutton and can be contacted at oliverh@rhrwclutton.co.uk

 

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