Will the forthcoming election impact on APR, if so what are the options?

20th April 2015

I’m sitting writing this in the most amazing sunshine and warmth; it really is my favourite time of the year. Everything around us is growing, with crops moving from each growth stage at an alarming rate; the cattle frolicking having just been let out onto fresh grass from their winter housing, enjoying the freedom at last.

Then you switch on the news and we get the never ending election debates, constant tittle tattle amongst the various leaders, confusing us all in the process….roll on Election Day so a bit of normality can resume. The councils have gone into complete shutdown, with no ability to make decisions until after election time; this is madness in my opinion and demonstrates their disconnection with the commercial world.

Thinking about the consequences of a change in political leadership, for the rural community we may see an increasing pressure on the availability of Agricultural Property Relief when passing assets on to the next generations. For most who are actively farming, this won’t impact too much given that Business Property Relief is more than likely to continue but will impact those who let out property. It is already having some impact, in that landowners, who have traditionally let property under FBT’s are now looking at alternatives.

Contract agreements/share farming are nothing new and been around for many years. The benefit for the contractor is less working capital required and from a cash flow perspective is extremely attractive, by effectively passing the risk over to the owner and freeing up their working capital to expand elsewhere.

However, be careful over the administration side and cost; I am amazed at what some people get charged by agents for managing contract agreements, far too much for something as simple. Secondly, it requires both parties to recognise this is a partnership, and needs like-minded people to be able to trust each other. I see agreements working very well but there is always one or two that don’t and it’s better to bring it to an end sooner rather than later.

Another concern is the longevity being offered in these agreements. From the contractors point, he needs some security in order to make investment decisions on machinery. From the landowner’s perspective, he wants to ensure that the land is enhanced over the tenure, that he gets complete buy in from the contractor who treats the property as if it’s his own and seeks ways to become more profitable. These points are often more difficult to achieve with short term agreements.

The other potential consequence as a result of a new political leadership is the TB debate over badger culls. We must seek to protect as best as possible the TB4 status in parts of Yorkshire and we need a strong government to tackle this issue, which is such a threat to beef farmers.

Whatever happens, we are bound to have a new minister and let’s hope he or she is farming focused.

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