Tag Archive: Louis Fell

Opportunities in Agriculture for North East Farmers

Farmers across the region looking to create jobs, diversify their business, and grow the rural economy could access grants and receive support through LEADER.

Providing grants to rural SMEs, farmers, foresters and communities, LEADER supports projects that create jobs and grows the rural economy. Supporting micro and small businesses, farm diversification, boosting rural tourism, increasing farm productivity, increasing forestry productivity, providing rural services and providing cultural and heritage activities are all LEADER priorities. This means that farmers across the North East have an opportunity of accessing funds for their diversification project.

LEADER delivers a bottom-up, community-led approach to rural and community development, promoting sustainable development in rural areas. An initial outline application will enable applicants to get a ‘yes, progress to a full application’ or ‘no’ answer at an early stage, reducing the risk of spending time and money developing an application for it to fail at an early stage.

The funding available will primarily be for capital expenditure, with funding of up to 40% of eligible costs, a minimum grant of £2,500 and no maximum limit. North East Farmers looking to submit an expression of interest can do so to Northumberland Uplands LEADER or Northumberland Coastal & Lowlands LEADER. There are no set deadline dates or application windows and the funding is open until 2020.

Another current diversification opportunity is Combined Heat and Power (CHP) units. For those businesses with a heat requirement CHP could provide a generous income stream through electricity generation and government incentives as well as heat cost savings. For farmers looking to become self-sufficient from the National Grid and produce their own energy, CHP is an opportunity worthy of serious consideration. CHP provides both heat and electricity through the gasification of burning woodchip or wood pellets. This gas is used to drive an engine which generates electricity and heat. The electricity can either be consumed on farm or exported to the grid. A constant demand for the heat produced through the burning process is needed and can be used for district heating, drying woodchip, heating warehouses, poultry sheds, or reversing the heat for cold storage etc. Through Renewable Heat Incentives (RHIs) from the heat generation, Renewable Obligation Certificates (ROCs) on the electricity and also the potential value from the heat, it can also provide significant income generation.

With a 20 year guaranteed income (with connection prior to April 2017) and a payback between 3 – 7 years CHP systems are fast becoming a very attractive option. We are guiding and encouraging a number of clients to look at these systems as a form of diversification and often an alternative enterprise for younger members of the family. There are however a number of salesmen currently pushing expensive CHP units without managing the process, as well as selling maintenance agreements that only apply 9 – 5, Monday – Friday.

For further information on both LEADER and CHP please contact Louis Fell or David Hume in the George F White Alnwick office on 01665 603231.

Agricultural Tenancy Succession – advice for landlords and tenants

Although the ability to grant new secure Agricultural Holdings Act 1986 tenancies all but stopped in 1995, there are still an incredible amount of such tenancies or implied tenancies in operation, particularly in certain parts of Yorkshire with large landed estates or institutional landowners. It’s a niche area of work and very few now know the intricacies of the Act and what can and can’t be achieved on both sides of the fence.

The ability for future generations to succeed to tenancies granted pre ’84 is one of the significant benefits for the tenant and of course a downside to the landlord. For both parties, preparation is a key part, timescales are extremely tight and neither can afford to miss one.

Succession can occur on death or retirement of the current tenant.  On death, the person wishing to succeed must make an application within 3 month of the date of death and if you fail to do it, you’ll miss the opportunity to succeed. I’d recommend that any tenant makes specific instructions in their will so it is not overlooked by the family. Similarly for a Landlord, they must serve a Notice To Quit (Case G) within 3 months of receiving written confirmation of the Tenants death. Don’t delay, if you are aware of the Tenants death, get the notice served straight away; failure may mean you lose the ability to serve a NTQ and the tenancy could end up being vested with the deceased Tenants estate/executors.

For a tenant, the onus is on them to prove to the Landlord and the Tribunal that they are both eligible and suitable to succeed. You need to be a close relative (you can’t skip a generation); secondly you can’t occupy another commercial unit – commercial unit means another farm in this context (there’s a calculation to work this out; if renting other land try and ensure it is for less than 5 years to avoid it being taken into account) and thirdly, your principle source of livelihood needs to come from the farm business or a business of which the holding forms a part. This last point is often overlooked until the last minute; a tenant needs to be careful of other earnings in the family, say from their partner who may have another job and could be seen to be the main earner or from other diversified income etc. It’s about planning and getting the paperwork right at least 5 years in advance. Similarly for a landlord, getting to grips with the earnings and where they come from is often the most important part of trying to challenge the application.

In reality, very few applications go to Tribunal as most tenants and landlords have a good working relationship and both plan in advance to ensure the smooth transition from one generation to the next. For me, a tenant and his son or daughter should be having those discussions early on with the landlord; most are more than amenable to a succession and would prefer to see the new younger blood come through with ideas; as they say it’s good to talk and importantly avoid conflict.

For more information or to discuss further contact Louis Fell on 07966 924345 or you can email on louisfell@georgefwhite.co.uk.

Does Brexit give us the opportunity to create a “GB Food” brand and create a positive farming attitude?

I read with disgust again in the national press today that farmers are being blamed once again for the destruction of the wildlife and loss of biodiversity and bird species in particular. It is worrying that we are still in this culture of blaming the farmers for “destroying” the countryside and no consideration given to what is actually being done to enhance the wildlife habitat. Worryingly, these reports are being published close to the NFU’s Back British Farming Day and the Red Tractor Week but perhaps we need a new direction going forward led by the industry as a whole, rather than individual parties. Brexit surely must be the time at which we need to unite and find a way to act as one market to promote British food and create a real brand that is worth something. The Scots have managed it extremely well as have the New Zealanders, and our industry needs to decide if we wish to work together or continue on this individual basis. I know that Yorkshire as a brand is strong, but are we right to continue to market that, rather than pushing the British brand solely? It’s great for local provenance but we need more than that, we need a global presence going forward.

Clearly Europe are intent on making it as difficult as possible, but now is the chance for us to take the moral high ground, promote our extremely high standards of production and welfare and promote what we are great at doing. Part of this is to promote how good we are at managing the environment that we live and work in. Yes there will always be the odd few that don’t conform as in any industry but ultimately, 99 out of 100 farmers are passionate about where they live and care for the environment as its ultimately their shop floor.

We need to stop the negative feeling towards agriculture within our shores and do more positive promotion to create an industry full of positively and buzz. We work a lot with businesses that are struggling and everyone around them always seems determined to bring the shutters down as soon as possible; from my experience that is not the case, many just need a different approach, new set of eyes and some positivity to get people through the difficult short term. As we are seeing now, price rises in some sectors are happening, taking pressure off businesses yet only a few months ago people were talking doom and gloom!

I think that we need to use our subscriptions and levies much more effectively; follow what others have done successfully and create a strong brand and market demand that encourages trade in and out of our country. We need imports as much as exports, so why not partner with those that want to trade with us. We can learn a lot from our Olympians who use positivity around them to create success and a strong brand at the envy of all their competitors.

For more information or to discuss further contact Louis Fell on 07966 924345 or you can email on louisfell@georgefwhite.co.uk.

Succession Planning – It’s good to talk!

Family farming setups are commonplace, with one generation working closely with another to achieve a collective goal. More often than not, this may involve three generations grafting together and working long hours to drive the business forward.

Inevitably each day’s work will be considered and planned around the breakfast table, with commodity prices, the weather and perhaps the latest family news forming part of the conversation. But how often is the business’s and the families long term future strategy discussed? The answer is, probably very rarely, if at all.

Succession within a family business is a difficult subject to address and can be further complicated when there are multiple beneficiaries to consider. It is difficult to know how and where to begin, especially when the process involves the transfer of assets from one generation to another, and the older generation is worried about losing control.

A strong family relationship which underlines a farming business can be one of its greatest assets, however to avoid it becoming one of its greatest constraints, it is important to establish the families collective strategy at an early stage, to ensure a viable future.

Succession planning need not be emotive or complicated. By addressing the issue early and sitting around the table with all involved, careful and deliberate steps can be made to identify what is critical and what objectives are required to deliver a successful and sustainable operation of the family business going forward. Ideas and aspirations need to be collectively established so they can form part of the future strategy and be actioned appropriately. This may of course include the transfer of property, shares in a company, a change in a partnership structure or outlining who will take on the farm’s tenancy.

One key consideration is that what may be important in the eyes of the transferor, may not be deemed to be of such significance to the beneficiary. Whilst an inheritance is not necessarily a bad thing, careful thought needs to be given to the future requirements of the next generation, particularly where some siblings may have an interest in the trading business, and others are earning their living by other means.

So, where to begin? …….start talking and address the situation next time you and the family are sat around the breakfast table eating your full English. Try to understand what the various parties want to achieve from the business and where their objectives lie, as this may come as a surprise.

The importance of such discussions should not be underestimated as these could form some of the toughest strategic decisions the family may make for some time. Seek professional advice and get them around the table too, even if this means sharing your breakfast!

It is important to get a good professional team on board early, to assist and take a chairing role to ensure the families objectives are met and a robust and reasoned strategy is adopted. Knowledge of value and tax is vital and the ability to seek advice on the advantages and disadvantages of potential changes to ownership, tenure, business structure and asset transfer will be key if the end goals are to be delivered.

Inevitably, the biggest hurdle is approaching the topic, however for the business and the families assets to remain viable and prosper, it is important to address the situation early before it becomes too late!

If you would like any advice regarding your property or agricultural business please speak to your regional contact:

Northumberland & Borders – Louis Fell 01665 511995
County Durham – Andrew Entwistle 01388 529561
Yorkshire – Simon Britton 01677 458202

X