Shropshire Star

Farming Talk: Policy reform set to impact on land sales

If you plan to sell your farm or land within the next 12 months it's important to consider how the transition from the Single Payment Scheme to the Basic Payment Scheme might affect the sale.

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Firstly, consider the area of land you are selling. Eligibility to claim under the new BPS will be different to that of the SPS, in that a minimum claim of five hectares (12.36 acres) is being introduced.

Threshold

If you are selling less than five hectares, the purchaser will be ineligible to make a future claim under the BPS unless additional land is owned and claimed upon elsewhere, resulting in their total claim exceeding the five-hectare threshold.

Secondly, you must consider cropping and land uses for the coming year. One requirement of BPS is "greening". A landowner's greening obligations will depend upon current land use – whether grassland, arable land or permanent crops – and the respective areas of each.

Greening is divided into three areas: maintaining permanent pasture; crop diversification on arable land; and Ecological Focus Areas.

Land that is currently classed as permanent pasture – not included in crop rotation for five years or more – will be expected to remain the same unless you apply for consent to convert the pasture. Areas of permanent pasture will be assessed on a national level rather than a farm level, so maybe not the most concerning element of greening.

Of more concern are the new crop diversification and EFA rules, which apply to arable land – land cultivated for crop production, land available for crop production but lying fallow and temporary grassland, which has been included in the crop rotation in the last five years.

Dependent on land uses and respective areas, landowners will either be exempt from the crop diversification and EFA rules, or must have at least two or three crops in rotation and five per cent set aside as an EFA.

With there being few exemptions for purchasers of new land and greening being compulsory, it's extremely important when selling to consider the greening requirements to ensure the purchaser is fully compliant with BPS going forward.

It would be easier in many instances to block crop arable land that is being sold, but unfortunately this is not an option for most vendors.

The third point to consider is the transfer of entitlements to land purchasers.

Transfers must be completed on or before October 21, 2014 for the purchaser to be automatically allocated entitlements under the BPS.

Transfers that fail to meet this deadline must wait until mid-January when the transfer window reopens, with all entitlements from that point onwards being transferred as BPS entitlements and only to "active farmers".

It's important to consider the impact of the transition from SPS to BPS whether selling, buying or continuing with the same land.

  • Louise Roberts BSc (Hons) MRICS FAAV, Rural Practice Chartered Surveyor at Halls, Shrewsbury.

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