The Future of Land Use
The pandemic brought about a renewed interest in access across farmland. The CLA’s Sophie Dwerryhouse warns professional advice is vital if farmers are to keep on the right path.
Land diversification at Trelowarren
Stepping out of line: What farmers need to know about public rights of way
Whether you run a small family farm or a sprawling estate of thousands of acres, having the right business structure is vital.
Business structures: Why farmers should care?
Sharing support, advice and sector insight with farmers
Even the best farmers cannot farm forever, but succession planning is still a thorny subject for many farming families, exclusive findings of a survey conducted by Farmers Guardian for the CLA reveal.
Succession planning still on to-do list for many
Temporary buildings are a lifeline for farms and rural business of all sizes; whether they are housing livestock, for extra storage or a diversification scheme, such as glamping or weddings. Sarah Todd explains why seeking professional advice is vital.
Temporary buildings: Why farmers should plan ahead
Northumberland farmers Joanne and Michael Souter talk about their multiple diversifications and their journey of growth.
Temporary buildings: County Durham family reflect on success
An in-depth look at Chris Skidmore’s report on Net Zero and what it means for rural businesses and communities
Analysis of the UK government's latest net zero review
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How the latest government plan for the environment impacts farmers and land managers in England
Environmental Improvement Plan - what is it and why it is important?
Off the back of the recent report from the House of Lords, the CLA discuss what a land use framework would mean for our countryside
Do we need a land use framework?
“A key part of the work is to use the feedback to modify the strategy. We have already come to a key conclusion that small changes in soil organic matter content have a significant carbon measurement impact.”
Mark Rowe explores how high energy and fertiliser inflation has promoted innovative reactions from farmers in England and Wales
Farming innovation from economic crisis
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Vice president of the CLA, Victoria Vyvyan, on her diversified family business, which embraces a strong ecological focus across the Lizard landscape of Trelowarren
Unlocking the value of your natural assets
A free e-magazine to help farmers understand the opportunities working with natural capital can bring and the simple steps to take to start the process
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The agricultural transition in England continues to progress, with new agricultural schemes and policies being rolled out and Basic Payment Scheme ceases, the CLA in partnership with Farmers Guardian takes a look at some of the most pressing issues, challenges and opportunities around the future of land use.
The UK government aims to ensure 30% of land in England is covered by environmental protection by 2030
Over the previous 12 months, the CLA teamed up with Farmers Guardian to look at some of the key diversification opportunities available on farms across the UK. Take a look at the articles and videos to find out more.
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VIDEO SERIES
CLA lobbying secures wide ranging package of measures to boost rural economy
Trialling environmental income streams
Loss of rural properties projected: CLA English Housing Survey results
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CLA Webinar: Rural England Prosperity Fund
The Renters (Reform) Bill explained
'Rural Wall' collapsing as Conservative support in England falls by 18 points
FURTHER READING
Discover more articles from the CLA
The UK currently imports 50 per cent of its food, which makes us vulnerable
Finding a balance between food production and environmental concerns needs to be a priority for farmers and land managers, says the CLA. Sarah Todd finds out more about the benefits.
All hands to the pump
Balancing farming with nature
Yorkshire farmer David Blacker talks about why he balances food production alongside the landscape and the mutual benefits it brings to the business and the environment.
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From January 2024, it will be mandatory in England to demonstrate a 10 per cent Biodiversity Net Gain
From next year, Biodiversity Net Gain will be a consideration on most planning applications and it could also provide an additional income stream for farmers. Aly Balsom speaks to the CLA to find more.
Biodiversity Net Gain considerations
Understanding the good and the bad
Shropshire beef and regenerative farmer Lizzie Harrop explains how working with a team on analysing water quality on farm has produced a staggering insight into the role farmers can play in battling against the volatility in our weather patterns.
Carbon markets may offer an attractive diversified income for farmers, but only after careful consideration. Matthew Doran, Land Use Policy Advisor for Climate Change and Water at the CLA answers some key questions around how they work.
The key considerations for carbon markets: what are they and how can farmers benefit?
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Vice president of the CLA, Victoria Vyvyan, on her diversified family business, which embraces a strong ecological focus across the Lizard landscape of Trelowarren.
Estate owner Victoria Vyvyan on the realities of growing daffodils on the UK's most southernly point
Video one
From 10 to 50 acres: Young farmer Harry Dark on expanding his Hereford beef herd
Video two
How to form a successful farming partnership
Video three
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It is a stereotype, but the Country Land and Business Association (CLA) says it is all too true that farmers become so busy farming that getting their business affairs in order is often an afterthought. Burying heads in the sand when it comes to subjects such as succession is well-documented among the agricultural community, but before any of these big debates can be had, the actual structure – a business’ very foundations laying down how it operates – needs to be in place. Put simply, a business structure describes the legal make-up of the business. Sole trading and partnerships are the most basic structure, with no ongoing requirements, such as shareholder meetings. A limited company, on the other hand, is a structure which recognises a business as a separate legal entity to its owners; making them only liable for the amount of share capital they have rather than any additional wealth or assets. Louise Speke, the CLA’s chief tax adviser, says many farming family’s accountants suggest they go down the route of becoming a limited company.
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But this can involve significant additional administrative costs which are not always strictly necessary. “Becoming a limited company might have been the right thing for the farm a generation or two ago, but it is something which needs keeping under review,” says Louise, whose background is as a solicitor. “Likewise, changing family dynamics – more members of the family becoming involved because of a diversification, such as a holiday let, for example – may mean it is time to review the business and set up or change the partnership arrangements or set up a limited company to operate that new business venture. “It’s important farmers know what the options are and that they don’t blindly go down one route because they’ve never looked at alternatives.” Direction When a business is started there is usually a very clear view about its future and this is the obvious time to get that business structure worked out. But it is also important to take stock down the line with an existing farming business and ask questions such as if the structure is right for where the farm is headed now? Louise says: “It sounds morbid, but it makes sense to imagine what would happen to the business if somebody on the farm lost capacity – through a farming accident, for example – or if there was a sudden death.
The approximately 12,000 acres that make up the Bradford Estates’ portfolio include 1,235 acres of woodland and 3,600 acres of agricultural land
“If you’re not going to be around, the paperwork has to be in place to make sure the farm you have worked so hard in establishing continues in the way you would want. It’s a lack of paperwork, such as a partnership agreement, which can trigger disputes or mean the partnership ends on the death of a partner. “Imagine two brothers farming together and one decides he’s retiring. With nothing written down about retirement in the business’ structure documents about how this will work, there is no reference point. “Rural businesses are unusual in that they are more diversified, with more income streams than perhaps a restaurant, hairdressers or plumbers. “The foundation stone of a business is its structure. It’s so important to recognise that a business is an evolving thing, something which needs to be taken stock off on a regular basis – is the structure in place still the right one for the business and are the right people involved? “A way of doing business which suited previous generations may be the wrong one for today.
Unless the right business structure is in place, it is very difficult to go on and tackle other subjects – from the basics, such as the cars the business runs, to the big ones, such as succession, inheritance and taxation.” Often the decision over which business structure to use will be tax-led. From an inheritance-tax point of view, it is important to establish whether or not assets are owned by the farming business or just used by it. Other key considerations are how any farm profits are to be divided, what records need to be kept and attitude towards information about the farm, such as accounts, being public. While sole traders and partnerships can keep finances confidential, going down the limited company route involves the business being registered at Companies House, with financial details, such as the profits, borrowing and assets in the company, visible to the public. Louise says: “Here at the CLA we know how hard farmers work. “All that work can be to no avail if the paperwork – the business structure – isn’t in place.”
Sole trader/Partnership vs Limited company
Where two farmers agree to work together to share the farming of some land, while maintaining their independent farming businesses
Share farming
A company formed and registered under the Companies Act 2006 (or earlier), that is limited by shares or by guarantee
Limited liability company
Two or more persons agreeing to carry on a business together with a view to making a profit
Partnership
A business owned and run by an individual
Sole proprietorship
Five most common business structures in agriculture
An association owned and controlled by individuals or businesses that come together to achieve a common economic or social goal
Co-operative
You are the owner You are the manager You are self-employed In the event of any legal dispute, you will be sued personally Joint and several liability in partnership
Sole trader/Partnership
Business is a separate legal entity You are a shareholder Individual serves as an office holder and/or employee Company is responsible for its own debts/actions, unless director committed criminal offence or fraud Company provides limited liability
Limited company
Select an option to view
Farms usually operate as a: sole proprietorship; partnership; limited liability company; share farming; or co-operative. Because it is the default organisation if nothing is done to formalise the business structure, most farms operate as sole proprietorships.
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Business structure: The basics
Each farming business operation is different and should adopt a business structure which is appropriate for its unique situation Business structures may need to change over time in light of legislation, family circumstances, the degree of business growth and the external business operating environment. However, the cost of change is often significant and the ideal is choosing a structure which will suit for a long period of time Sound risk management, business plans and succession plans are vital for a viable farming business operation
Louise Speke, chief tax adviser CLA
Becoming a limited company might have been the right thing for the farm a generation or two ago, but it is something which needs keeping under review
THE CLA’s professionally qualified advisers have the expertise to give impartial advice on what you need to consider when thinking about the right structure for your business. This can include whether a partnership or a company is right for you to use or whether your new business venture should be part of your existing business or run as a separate enterprise. It will also advise on the tax implications of the options you are considering, including the impact on succession planning to transfer your business to the next generation.
CLA advice on business structures
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Annual accounts are filed with Companies House, so less privacy Need for board decisions to be minuted and AGM formalities met Limited liability – in practice small business owners may have to give personal guarantees Company must have separate bank account
Financial business information can be kept private Less formality if sole trader, but a partnership should have a written agreement Good practice to have separate business bank account so it is easier to track business expenditure and income
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Legal implications
Practical considerations
But this can involve significant additional administrative costs which are not always strictly necessary. “Becoming a limited company might have been the right thing for the farm a generation or two ago, but it is something which needs keeping under review,” says Louise, whose background is as a solicitor. “Likewise, changing family dynamics – more members of the family becoming involved because of a diversification, such as a holiday let, for example – may mean it is time to review the business and set up or change the partnership arrangements or set up a limited company to operate that new business venture.
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Sophie Dwerryhouse, national access adviser at the CLA, says the episode highlighted there is a whole generation which missed learning about the Countryside Code. Sophie was involved in work with Natural England as it modernised the wording and content of the code to mark its 70th birthday earlier this year, as well as working with Linking Environment and Farming to develop a free resource pack specifically for teachers and youth leaders. Sophie says: “What we have put together has been very well received. Rather than telling the public they cannot do something, it works much better if you explain why.” Sophie says she has been working on a new generation of signage, using QR codes which can be easily scanned on a walker’s mobile phone – that provide additional information. She says: “A good example is dog mess. Rather than just saying ‘pick it up’, it works much better if there are facts such as dog mess can cause still birth and abortion in cattle.”
Rather than telling the public they cannot do something, it works much better if you explain why
Sophie Dwerryhouse, national access adviser at the CLA
While the subject of access has often been limited to public rights of way, there is now a new spotlight being shone on opening additional land up to the public. Sophie says: “I’m busy at the moment looking at voluntary access under the Government’s Environmental Land Management scheme. It stands to reason if farmers and landowners are going to get financially rewarded for offering additional access they are going to be more positive about it. “However, on the flip side, any increased access needs to really fit in with the existing farming business.” Other areas which take up a large chunk of Sophie’s time are helping farmers wanting to divert a right of way and those who have received a notification from the local authority about either intending to establish a new right of way or claim an old, often long forgotten, access.
Small print
She says: “It is quite possible a farmer could have rights of way across every single one of their fields, so at busy times, such as calving, when cows can pose more of a threat to walkers for example, the option might not be there to move them to a field without a footpath. “The CLA continues to lobby for a small amendment to the Highways Act 1980, which would allow farmers to temporarily divert footpaths and bridleways for a limited time period. Applications like these could save lives. They are not about reducing the network. Managing them in an upfront way is better for the farmer and their business and is safer for the public.” When it comes to claims for rights of way, it is very much that nothing is cut and dried, says Sophie. “Just because something is shown on an old map, it is not definitely going to be turned into a new public right of way.
As part of the CLA’s legal team, Sophie’s role covers policy work relating to public access in England and Wales and sees her provide bespoke advice to members on the subject which ranges from public rights of way, open access and coastal access through to access to rivers and permissive access. If you are unsure of your rights and responsibilities in connection with public access or want to know how to protect yourself from claims for new rights of way or liability and trespass, Sophie and a number of professionally qualified advisers are able to provide you with advice and guidance.
CLA advice on public rights of way
Knowing the rights: Who is covered for what?
After ploughing and cultivating, farmers must reinstate the route of a path within 14 days and for it to be clear on the ground and its surface reasonably convenient for the public to use. If you know you will require longer, you can apply to the local authority, which may grant an extension for up to 28 days.
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Obstructing a public right of way (such as with overhanging vegetation) without legal authority or excuse is an offence. If found guilty, a person could be liable to pay a fine.
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Ordinarily, the surface of a public right of way comes under the umbrella of the Highway Authority, but if you need to interfere with the surface, for example to carry out drainage work, you must seek permission.
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Although it is good practice to display signs informing the public when animals, such as bulls or cows with calves, are in a field, and advice about what to do in case of emergency (‘let your dog go if chased’), signs are not a substitute for a proper risk assessment. Livestock owners should be aware of the dangers and risks cattle and other animals can pose to members of the public, however docile. A full assessment of those risks must be recorded and action undertaken to minimise those risks. This may mean a variety of preventative measures, from locating cattle in different fields, not keeping horses in fields crossed by bridleways, installing permanent or temporary fencing, the provision of signs or the relocation of feeding areas away from public access. It is also important to ensure you have adequate insurance cover in place.
Signs
Livestock
There is a risk of members of the public suffering an injury from livestock when using public rights of way or access land, which often attracts media interest to raise public awareness and the possibility of a claim. Two most common factors in incidents are cows with calves and walkers with dogs, although the principles also apply to other types of livestock, including horses. The Animals Act 1971 covers civil liability and places strict liability on the keeper of animals which cause harm. Duty of care The Occupiers Liability Acts 1957 and 1984 state an occupier of land owes a duty of care to those who enter onto it. The 1957 Act deals with lawful visitors and the 1984 Act sets out the position with regard to trespassers.
“Giving strong and sensible evidence against a claim early on can save an awful lot of headache and legal fees down the line.” There is currently a huge backlog of right of way claims languishing in local authority offices. “They could end up being a headache not just to our children but to our grandchildren if we don’t take a proactive line with them now,” says Sophie, who adds that another junction when rights of way may need discussion is farm diversification. She says: “It might not be appropriate from a point of view such as security or safety to have a right of way going through a campsite or equine livery yard, for example, but the advice is very much don’t bury your head in the sand. The sooner you start the ball rolling with an application for a diversion the better.”
Farmers and land managers should be aware of the risks to all types of rights of way users, such as cyclists, disabled users and horse riders, as well as walkers. It is important to note that members of the public, including children, may not understand about the risks presented by livestock, especially if a dog is present. When considering where to keep livestock, you should take into account that the public is unlikely to be familiar with the behavioural characteristics of such animals, or be aware of how to respond appropriately. It is important that this lack of knowledge is taken into consideration in your risk assessment and decision-making.
Giving strong and sensible evidence against a claim early on can save an awful lot of headache and legal fees down the line
RESPONSIBILITIES
It is an offence under this Act to allow a dog to chase or attack livestock. It is also an offence to allow a dog to be ‘at large’ in a field or enclosure where there are sheep. In such a situation, the dog must be on a lead or under ‘close control’. Problems Where a public right of way crosses land used by livestock, additional problems can arise. For more information see the CLA guidance note Livestock on public rights of way. For more information visit cla.org.uk/advice/library, or call 020 7235 0511.
Few will forget the photographs of a lockdown-weary population finally getting out into an exceptionally wet countryside in early 2021. Instead of rambling along in single file, this new breed of visitor trampled crops underfoot as they strayed off footpaths to find some firmer footing. Walked routes became far wider than the legal line of the right of way, resulting in a muddy expanse and many metres of productive farmland lost.
“It’s important farmers know what the options are and that they don’t blindly go down one route because they’ve never looked at alternatives.” Direction When a business is started there is usually a very clear view about its future and this is the obvious time to get that business structure worked out. But it is also important to take stock down the line with an existing farming business and ask questions such as if the structure is right for where the farm is headed now? Louise says: “It sounds morbid, but it makes sense to imagine what would happen to the business if somebody on the farm lost capacity – through a farming accident, for example – or if there was a sudden death.
'We didn't know we needed planning permission' doesn't wash as an excuse with local authorities
Fenella Collins, head of planning, CLA
“Another interesting area is a building which may at first glance appear temporary, like a shepherd’s hut, but when you look at it closer a concrete base has been put in, along with the ground dug up for electric and water. “The shepherd’s hut itself may not require planning permission, but the groundworks certainly do. Also, does it need more than one man to move it – is something temporary if it needs a team to move it?” In Fenella’s experience, enforcement officers are alerted to breaches of planning law through a variety of ways. “Traditionally, the rural community can have the attitude of keep quiet and hope for the best,” she says. “But all it takes is for somebody to be walking along a public right of way which passes a new building and take a photograph and it can become a time-consuming and expensive mistake.”
Minimising cost
To help farmers going forwards, there is a whole raft of information and advice available about planning requirements for temporary buildings which ultimately can save a lot of time, effort and money. Fenella says: “Too often farmers and managers only get in touch when they are in trouble with the planning authority. It is so much better to ask for advice before bringing in any kind of temporary building. “Ignorance is not bliss. ‘We did not know we needed planning permission’ does not wash as an excuse with local authorities. The onus is on the farmer to make sure they are complying with planning law".
The CLA’s professionally qualified advisers have the expertise to provide impartial advice on all the matters which will need to be considered if you are thinking about using temporary structures in your business. This will include advice on whether permitted development rights are the correct approach by considering the various conditions and limitations which must be complied with. On the other hand, if it is considered that planning permission is required, advice will be provided on the various material planning considerations which will need to be taken into account to achieve a successful outcome.
CLA advice on temporary buildings
Trying out a new business diversification is one of the most obvious reasons for needing a temporary structure. If a new livestock venture, such as poultry or pigs, is successful, the decision can be made to invest in new purpose-built housing. Likewise, a tourism diversification; if a temporary glamping tent proves profitable, the farm might go on to invest in a permanent building such as a holiday lodge. Temporary structures keep the initial outlay lower than a permanent building.
Tactics: Why temporary structures can be useful
Glamping
Glamping structures come in all shapes and sizes: tents, pods, yurts, floating pods, shepherd’s huts and so on. Permitted development rights for the temporary uses of land are available for up to 28 days per calendar year, across the holding, and may be available for glamping. It is also particularly important to note that any bins, buildings or other paraphernalia associated with glamping which are left on the land will be counted as part of the eligible days. To avoid using up eligible days, these items should only be placed on the land on those days the land is being used for a temporary use and removed immediately the use ceases. Planning permission is still required for any engineering works to install drains, electricity, roads and so on. However, even if the structures are all temporary and fully mobile, if the activity takes place for more than 28 days in a calendar year they will require planning permission for change of use from agricultural land or woodland to a use for glamping.
Jonathan Thompson, CLA senior heritage adviser, says planning officers often seem ‘much more frightened’ of temporary structures than permanent ones. This can make it very difficult to get planning permission for temporary structures, especially (but not only) near listed buildings or Areas of Outstanding Natural Beauty or Sites of Special Scientific Interest. Jonathan says: “There seems to be a prejudice against them; an assumption that they will almost always be somehow dangerous or inappropriate. The viability case for them is often strong in planning policy terms, but is very often ignored. Farmers should not bury their heads in the sand and hope nobody will notice new temporary buildings. “Doing this can waste an awful lot of time, energy and money. If you just ring up the planning department and ask if you will need permission, the likelihood is they will automatically say yes. It is far better to be armed with the facts first.” Lobbying After lobbying from the CLA, Historic England issued new guidance in 2010 that ‘there should not be a presumption against temporary structures simply because they are visible in the historic environment’, which is a complete reversal of previous policy and has improved the odds of obtaining permission significantly. Jonathan says: “However, it is essential you quote this guidance, as it is our experience that it is often ignored."
Temporary buildings: Beauty or beast?
For generations farmers have been masters at multitasking – making, doing and mending, re-purposing and inventing new buildings long before upcycling became a buzzword. But Fenella Collins, head of planning at the CLA, warns an ever-increasing number of farmers and land managers are getting caught out. She says: “Time and time again we see farmers who have spent a lot of money on what they think will pass as a non-permanent building and they end up in a long and protracted planning wrangle. It is far better to check or seek advice before making any investment. “A good example in case law is some large chicken sheds on skids, [foundations] with 1,000 hens in each. Yes, they were not fixed to the ground, but they needed to be pulled by a tractor to be moved, which the courts decided made them permanent.
“The law is getting more murky, just having skids on is not a fail-safe that something is ‘temporary’. “A temporary structure is by definition not attached to the ground, so that calls into question polytunnels and glamping tents that have poles driven into the land beneath them. “Time is also relevant. Take for example pig arcs, which are being moved around all the time, but what about something that is up all summer? Three or four months could be construed as permanent.
In 2006 there was a court case relating to Spanish-style polytunnels for soft fruit production. The courts ruled they are buildings requiring planning permission because of their size and the amount of man hours needed to erect them. Permanence was also a factor, with the polytunnels remaining in place for between three and seven months in any one year. Even the shortest of these periods, three months, was ‘sufficient to be of consequence for planning purposes’. Degree of attachment was another concern, with the tunnels’ metal legs screwed into the ground using machinery to a depth of up to one metre, which the inspector ruled was a ‘substantial degree of physical attachment to the ground’.
Case study: Polytunnels
Size Permanence Physical attachment to the ground
Temporary buildings: Three golden rules
The General Permitted Development Order 2015 (1995 in Wales) allows ‘moveable structures’ for up to 28 days a year, outside the curtilage of a building
If it is ‘development’, is it ‘permitted development’?
Planning permission is needed for any ‘development’, meaning a ‘building or engineering operation’ or a ‘material change of use’. This usually depends on ‘scale’, ‘permanence’ and ‘degree of attachment to the ground’. A marquee for a wedding is unlikely to be ‘development’, but big polytunnels (even if removed every year) probably are
Do I need planning permission?
Questions to ask
The local authority might just ask for a retrospective planning application, but can (and often will) take enforcement action. This could potentially be a big problem if you have crops growing in polytunnels or bookings for glamping or weddings
What if planning permission was needed but I do not have it?
Many local planning authorities are inclined to refuse applications for temporary structures, so this needs careful handling, possibly by a specialist consultant
If it is ‘development’ and not ‘permitted development’, will you need to make a planning application?
Members of the CLA can seek free advice and access to guidance notes on permitted development rights for temporary buildings and uses of land. For more information visit cla.org.uk/advice/library, or call 020 7235 0511.
More information
The local authority might just ask for a retrospective planning application, but can (and often will) take enforcement action. This could potentially be a big problem if you have crops growing in polytunnels or bookings for glamping or weddings.
4) What if planning permission was needed but I do not have it?
Many local planning authorities are inclined to refuse applications for temporary structures, so this needs careful handling, possibly by a specialist consultant.
3) If it is ‘development’ and not ‘permitted development’, will you need to make a planning application?
The General Permitted Development Order 2015 (1995 in Wales) allows ‘moveable structures’ for up to 28 days a year, outside the curtilage of a building.
2) If it is ‘development’, is it ‘permitted development’?
Planning permission is needed for any ‘development’, meaning a ‘building or engineering operation’ or a ‘material change of use’. This usually depends on ‘scale’, ‘permanence’ and ‘degree of attachment to the ground’. A marquee for a wedding is unlikely to be ‘development’, but big polytunnels (even if removed every year) probably are.
1) Do I need planning permission?
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Four key questions to ask
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In her own words, Joanne Souter says she and husband Michael are normal, hard-working farmers, like hundreds of others trying to do their best. The couple are tenant farmers of 65-hectare (160-acre) Bail Hill Farm, in Teesdale, Co Durham, and although it had been farmed by Joanne’s grandfather, a generation of succession had been missed and so the couple had to formally apply before taking over the reins with a new style Farm Business Tenancy. Joanne and Michael are supported on-farm when possible by their children – Joseph, 29; Danny, 25; and Megan, 21. The children work as an agricultural engineer, farrier and trainee accountant, respectively. The family are passionate breeders of Beef Shorthorn cattle, calving 40-45 a year. They also run about 180 breeding ewes, moving over more each year from Swaledales to North Country Cheviots and Mashams.
Left to right: Joanne Souter, Alice Nicholson and Jess Hodgson
As members of the CLA for more than 10 years, the couple asked for help after their planning application for the 12-pod site hit complications. Joanne says: “The first lot of plans we submitted were knocked back and it was really useful to have access to an adviser to talk to. “They provided us with a letter of support and at the next attempt we got permission. Sometimes you need somebody to take a look at a project with a fresh pair of eyes.”
The Hill Top Huts site opened in October 2019, followed by The Hill Top Shop which opened in December 2020. Joanne says: “We knew there would be a market from the glamping customers, but because of the Covid-19 pandemic it turned out that it became a really useful village shop for locals. “We stocked all the essentials to save people having to leave the village. Our proudest achievement is the meat counter, selling our home-grown beef and lamb.” The village had been without a shop following the closure of its post office and shop in 2005 and residents have really got behind the new venture. The family has an on-site cutting room and the butchery is something Michael has got very involved in. Joanne says: “It’s amazing to think the meat from our farm is being sold direct to customers in our own shop as well as being used for the meals in our pub. The diversifications have brought us a lot of hard work, especially at busy times on the farm, such as lambing and calving. “There are letting rooms in the pub plus the glamping pods, so as well as people having meals in the pub and coming into the shop, that’s a lot of customers to keep happy. “We’re very hands-on, working shifts in the pub as well as looking after the animals on-farm. We’ll always be farmers first and foremost, but diversifying was definitely the right thing to do.”
Development
But in an unexpected move, their local pub, the Moorcock Inn, in the village of Eggleston, came up for auction 10 years ago and offered a new dimension to their business. Joanne says: “It had been a popular pub in its day, but it had been closed for a while. We owned it as part of a partnership for a year or two with tenants running it “ Like lots of rural village pubs it was hard to make it pay. “We’re a bit off the beaten track and Teesdale seems to be a forgotten dale, unlike the Yorkshire Dales or the Lakes. After a year or two we bought our partner out and started running it ourselves. “We were determined to keep it open and one idea to make it viable was to turn the bit of land at the back of the pub into a glamping site to try and get some people coming into the area. “We decided on timber pods, so they would blend in with the area, but getting planning permission wasn’t easy.”
Michael Souter
Robert says: “We started on this curve of diversification a long time ago and we were one of the very first to enter the glamping market. “The days of putting up a temporary style building and hoping for the best are long gone. My advice to all farmers and landowners is to be upfront and proactive, rather than burying your head in the sand and going ahead regardless, thinking you can always put in a retrospective planning application.” Robert says he is very much an ideas person and will identify new schemes for diversifying the family estate. Support At the times he has needed sensible advice, his CLA membership has helped him balance this enthusiasm with some sensible advice.
It all ties in, selling meat from the farm through the shop and using it on the menu at the pub. “It’s not just our farm which has benefited” says Joanne, “the extra visitors have created jobs and brought many more people to Teesdale, which has been a real boost for the local economy. “If we hadn’t got the planning permission for the glamping, we wouldn’t have done the shop and the pub wouldn’t have become so busy. Getting the glamping site really did transform things for us.”
Northumberland farmers Joanne and Michael Souter talk about their multiple diversifications and their journey of growth
The Moorcock Inn, Eggleston
Some of the Beef Shorthorn Cattle
CASE STUDY: Camp Hill Estate
Knowing the ropes With the benefit of hindsight, Robert Ropner knows embarking on a diversification can be an uphill struggle and advises farmers to leave nothing to chance. Robert and his wife Jo first opened the gates of their family estate to the public back in 1996. Since then they have welcomed more than a million people to 121-hectare (300-acre) Camp Hill Estate, near Bedale, in North Yorkshire. Although he is quick to say his local planning authority has been amenable, Robert is aware that if he was starting out his diversification of the estate now it could well be more of an uphill struggle.
Robert says: “It’s easy to get in a bit of a tunnel when thinking about a new idea. It’s so important to take a step back, bounce ideas around and talk it through with others.” As well as its glamping business, Camp Hill hosts festivals and corporate events. It is home to an adventure park and organises team-building, educational and many other events and activities. Robert says: “Thankfully, it has always been to our advantage that Camp Hill isn’t really visible to anyone from outside. “For those in more sensitive areas there are more obstacles to growing and diversifying a business. In that instance, you can’t really start getting advice soon enough."
It is never too late to put plans in place
Jack Burroughs, private client and tax adviser, CLA
What was striking was that 21 per cent said they do not intend to retire at all. A similar number said they expected to retire in the next 11-20 years. Given the major changes and challenges facing farming, it is surprising that only 5 per cent said they intended to retire in the next year, although a further 16 per cent may retire in the next five years. Mr Burroughs says: “The fact so many farmers have no plans to retire may mean they love the job, but it could make it difficult for younger generations on the farm planning their own futures.” He welcomed that one-third of respondents have a plan for succession in place, but was surprised only one-third of those who plan to retire in the next five years have sought professional advice. Mr Burroughs says: “The earlier you seek advice and put a plan in place, the more options you may have to secure the future of the business when you retire, pass on assets in a tax-efficient manner or build up capital to provide for non-farming children. Having said that, it is never too late to put plans in place.”
Shying away from retirement
CLA landowning and business or professional members can purchase heavily discounted handbooks full of essential business and legal advice. One of these provides an in-depth practical guide to succession planning for farming and landowning families as they draw up or review a plan including advice on possible business structures, tax considerations and legal documents required to put a plan in place. Other handbooks look at partnerships and how to draw up a share farming arrangement
CLA Handbooks
Many farms have been in the same family for generations with each generation hoping to pass on an enhanced business to the next generation. An exclusive survey conducted by Farmers Guardian and the CLA shows that while many farmers have thought about and planned how their legacy may look, there are many who have not and whose businesses could be at risk once they can no longer farm. More than 500 farmers were questioned and while nearly 90 per cent had identified who will take over the business, only 65 per cent had made a will. Only one-fifth have made a lasting power of attorney, the legal document allowing nominated parties to make financial and health and welfare decisions. Jack Burroughs, private client and tax adviser at the CLA, says: “It is encouraging that two-thirds of those in the survey have made a will and one-third have a plan for succession in place, but that still leaves a lot of people who have done neither.
“I would advise anyone who has not written a will to do so as soon as possible. Writing a will is important whatever age you are, as it will make it a lot easier to decide what will happen to your assets if tragedy does strike. “It can be especially traumatic for a younger family to cope with the legal issues when a loved one is lost and the lack of a will can make this all the more difficult. “The survey also showed that only a small proportion have put a lasting power of attorney in place. “Again, these are very important documents whatever age you are, as they allow business and personal decisions to be made if the business owner loses capacity. “In many ways, it is like insurance – you hope you do not need to use it, but you are glad you have the cover if circumstances mean you do need to use it. “Farming can be a high-risk business where accidents can result in life-changing injuries and that is when legal and financial protection can be needed the most.”
Unsurprisingly, the majority (59 per cent) expected to hand the business on to their children, with another 14 per cent intending to give way to other family members – 6 per cent to siblings, 3 per cent to grandchildren and 5 per cent other relatives. Retirement will prompt the sale of the farming businesses for 8 per cent of those questioned. That should mean opportunities for new entrants or for other farmers looking to expand. There may also be opportunities for non-family members to get involved in the business in a few cases, as 2 per cent plan to run it with a share farmer when they are not so actively involved. A similar proportion would hand the farm to a non-family member or restructure it.
Handing on to the kids
The survey bears out the long-lived statistic that the average age of farmers is 57 years old. Nearly one-third of respondents were aged 56 - 65, with a further 24 per cent older than that, while only 14 per cent were younger than 35. Age has an impact on succession planning. Most of those with no succession planning in place (63 per cent) were under 55 years old. Their youth and lack of children were the reasons that farmers under 55 gave for not putting plans in place. Of those taking part in the survey, 71 per cent were male, suggesting that farm ownership and business control is still largely male-dominated. Mr Burroughs says: “It is only natural that the older you are the more you think about succession, but a long-term succession plan involving multiple generations of the family can be very valuable and allow you to secure the business. “Despite the figures showing that farming is still a very male-dominated business, we are finding more women are taking an active role in leading businesses and we expect to see a lot more women farmers in the future.”
Age and succession
The CLA offers a free succession planning service to its members. It starts with a questionnaire detailing the business, its assets, its ownership status, the family’s circumstances and what the member wants to achieve from the process. Mr Burroughs says: “We then arrange a telephone call with the member and any other interested parties, such as children, they want to invite. “After a full discussion, we put together a report detailing the succession issues the family faces and suggest some solutions. This can be used by the family or business in their succession planning or shared with professional advisers, such as solicitors or accountants.” Mr Burroughs says that getting an outside party in helps the family to take an objective view of the issues it faces. Aside from discussions over who should take over the business and how assets should be shared, tax issues are one of the most important succession questions. That is reflected in the survey, with 59 per cent of respondents saying they are concerned about tax issues surrounding succession planning. “Farming benefits from significant tax benefits, including Agricultural Property Relief and Business Property Relief. But planning is key to tax management. Get it wrong and it can be very costly.”
Succession planning advice
Wills may be the first documents that spring to mind when thinking about succession planning, but they are not the only ones. A will should also be written with other business documents in mind. For partnerships, there should be a written partnership agreement which makes provision for what happens if a partner dies, becomes incapacitated or chooses to retire. If a company is being used, there would be company articles and ideally a shareholders’ agreement, which should cover similar points in relation to the directors and shareholders. In either case, these documents should be reviewed and, where necessary, amended, to ensure that they fit with what has been decided as part of the succession plan. Farmers who rent land should also make sure to check their tenancies to see what will happen when they die or if they wish to retire. Where there are Agricultural Holdings Act tenancies, it is especially vital that preparations have been made to ensure the chosen successor will be entitled to take these on, where possible.
Other documents
The CLA has several guidance notes which will help those planning succession. A recent one explores things to think about when making a will. It includes a detailed guide to this aspect of the succession planning process, including finding a lawyer, what topics you might want to consider in advance of meeting your lawyer and a checklist of what you should cover in your will. Other notes cover the tax aspects of succession planning, including whether your farmhouse qualifies for relief from Inheritance Tax.
Guidance notes
Survey results at a glance
With an ever-increasing population, the demand for food has never been higher – all at a time when farming has to adapt to climate change and reduce its own contribution to greenhouse gas emissions. The CLA warns climate change and biodiversity loss will increasingly disrupt agricultural production and believes improving the UK’s self-sufficiency needs to be at the heart of future farm planning. Matthew Doran, CLA climate change and water policy adviser, explains why improving the country’s food security profile needs to take precedence. He says: “The UK currently imports 50 per cent of its food, which makes us vulnerable to the impacts of extreme weather events which happen abroad. Enhancing domestic food security is crucial. “This does not mean we need to aim for full self-sufficiency, but we need to plan investment at home, supported by the Government, to mitigate the impacts of drought and heat extremes.”
Matthew and the team at CLA say water for food production should be written into primary legislation as an essential for use in drought situations. Matthew says: “Water security is essential for food security. It is frustrating that water for food production is not encoded and protected as an essential use during droughts. “For example, last autumn, spray irrigation bans were imposed in Norfolk, Sussex and Essex, but the public water supply faced no corresponding restrictions. “The CLA is part of the water for food industry partnership group, which is lobbying for agriculture’s inclusion as an essential water use.”
The CLA is also calling for increased financial support for on-farm storage reservoirs. Matthew says: “On-farm reservoirs allow farmers to abstract water in high-flow periods to irrigate crops during low-flow periods. “Low-flow periods are becoming more extreme and uncertain due to climate change. However, those applying for reservoir funding in the Government’s Water Management Grant have faced an uphill battle to align planning permission, a new abstraction licence and grant funding. “In the inflationary environment of the last year, a hold-up or bureaucratic delay on any one of these elements has caused project costs to increase – often prohibitively so, given that the grant amount does not proportionally increase. “The CLA has successfully lobbied the Government to review barriers to constructing farm reservoirs and to streamline the process, which it has committed to in its Plan for Water.” One suggestion proposed is that Defra increases the Farming Transformation Fund Water Management Grants to 60 per cent of reservoir cost, given the importance of reservoirs to Britain’s farming and horticultural security.
Yield losses are the most obvious impact of extreme weather events, which would increase the cost of imported food and have knock-on effects, such as hikes in animal feed prices. Climate change has already slowed down agricultural productivity growth by about 21 per cent since the 1960s. Crops also appear to be less nutritious when grown under higher CO2 concentrations and warmer temperatures. Global food production is currently buffered by increased meltwater rates from mountain glaciers, but these are set to decline by the mid to late 21st century, which will cause water deficits and reduced crop yields in many of the world’s irrigated breadbasket regions.
Global food production is currently buffered by increased meltwater rates from mountain glaciers
Global food production is currently buffered by meltwater from mountain glaciers
Crop irrigation
Without long-term water security for irrigated crops in the UK, including fruit, salad crops and field vegetables, the fear is that domestic production will become more volatile and decline due to high risk. With England’s climate changing, there is projected to be an increase in extreme weather events, such as heatwaves, droughts and flooding. Agroecological farming and its more nature-friendly approach needs to be front and centre, says Matthew, of future agricultural policy along with regenerative practices, reducing quantities of fertiliser used, reducing nitrous oxide and carbon dioxide emissions without decreasing crop yields on cropping years. Furthermore, climate adaptation, such as the impact of rising sea levels and more frequent and extreme flooding, also needs to be brought into the balancing act. Matthew says: “A large proportion of the UK’s most productive agricultural land is located in low-lying, flood-prone areas. Much of this land is poorly protected by existing river and sea defences and their maintenance is increasingly unviable for Government. “The financial losses from seawater inundation and soil salinisation are high and can remove land from production for years. The CLA is currently consulting members on how best to support them regarding sea level rise.” Crop failure is predicted to become a more common occurrence as the climate becomes warmer and drier.
Water security
Matthew Doran, CLA climate change and water policy adviser
UK beef production is about half as carbon-intensive as the global average (48kg CO2e/kg beef versus 99kg CO2e/kg beef) and 14 per cent less intensive than the EU average. However, the CLA acknowledges the pressure to reduce meat consumption to meet net zero targets.
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BALANCING ACT
Starting points on the road to balancing food production while protecting the environment
Slurry management, such as anaerobic digestion, solid liquid separation and decreased slurry storage time Genetic testing to identify animal lineages which produce less methane and selectively breeding these Agroecological grazing systems which may assist in carbon sequestration Rearing breeds of cattle for multiple uses (milk, meat, leather), rather than beef only
ACTION POINTS FOR MEAT
Improving soil health reduces the need for nutrient inputs and improves the ability of soil to absorb and hold water.
ACTION POINTS FOR SOIL
Add organic matter and reduce bare ground through cover crops, tree planting and overwinter stubbles Healthy soil can act as a sponge and absorb large quantities of water during floods and slow the flow of water, preventing major damage to crops and infrastructure Because soil holds on to this water, it dries out slowly, mitigating the damaging effects of drought on crops
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The simultaneous use of areas of land for both solar photovoltaic power generation and agriculture, agrivoltaics, can in some cases increase crop yield due to the shade of solar panels by reducing the stress on plants caused by high temperatures and UV damage.
ACTION POINTS FOR AGRIVOLTAICS
The CLA is opposed to outright Government bans of solar on agricultural land Solar power can diversify and stabilise farm incomes, providing electricity to poorly connected rural communities and can mesh with food production
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Plants and animals are declining globally, with England seeing some of the greatest declines. Biodiversity provides services, such as pollination and pest control, helping crop yields.
ACTION POINTS FOR BIODIVERSITY
Planting of wildflower strips, incremental hedgerow cutting and planting trees are all shown to improve crop yields and pollination
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The UK currently imports 84 per cent of its fruit. Orchards offer the triple benefit of increasing UK carbon stocks and biodiversity, while improving self-sufficiency in fruit. As recently as 1991, the Government paid for the grubbing up of apple trees.
ACTION POINTS FOR FRUIT
The Government could now pay for the re-establishment of orchards, using traditional varieties Orchards can also be successfully integrated into agroforestry and are highly land-efficient, shading crops and livestock
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A warming climate also means soyabeans could become a commercially valuable breakcrop in cereal rotations, protecting against pests and diseases, fixing nitrogen in the soil and reducing fertiliser usage. The UK currently imports about 3.2 million tonnes of soyabeans each year, most from South America with associated deforestation implications.
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One way to reduce emissions from agriculture is if UK consumers shift their diets to eat less ruminant meat and eat more pulses and legumes instead. A challenge with this suggestion is that few UK-consumed pulses and legumes are home-grown. Traditional British pulses varieties, such as fava (field) beans, marrowfat peas and large blue peas, have either fallen from favour, are exported to the Middle East and Japan or are now grown as livestock feed. The CLA says one strategy to tackle food security and reduce agriculture’s carbon footprint would be if these pulses were promoted and went on to form a much larger component of the UK diet.
Members of the CLA are able to access a wealth of information on balancing food production while protecting the environment. For further details, visit cla.org.uk
Awareness campaigns to increase domestic consumption of fava beans, which would improve UK protein security The Government could support farmers with more upstream technical funding and downstream storage and processing capacity More funding for research, development and cultivation of higher yielding domestic pulse varieties could help increase the UK’s future self-sufficiency in low-carbon protein sources
ACTION POINTS FOR PULSES AND LEGUMES
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MEAT
SOIL
BIODIVERSITY
PULSES AND LEGUMES
AGRIVOLTAICS
FRUIT
Biodiversity Net Gain (BNG) describes the actions taken to recover the nature lost as a result of land development. The idea is to ensure the habitat for wildlife is in a better state than it was before the development. From January 2024, it will be mandatory under any planning application for anyone building new housing, industrial or commercial developments in England to demonstrate a 10 per cent BNG. That means the type of habitat removed must be replaced with the addition of a 10 per cent uplift. From April 2024, it will also be mandatory for small sites, which includes developments of less than 10 residential units on a site area less than one hectare (2.47 acres) or for non-residential of less than 1,000sq.m. Shannon Fuller, planning adviser for the CLA, explains BNG can be carried out on-site or off-site. She says: “On-site is within the red line boundary of the planning site and off-site is out of that area.”
It is not yet known how many units will be required annually in England. Some estimates suggest a demand for 5,000-6,000 biodiversity units per year across England, of which a proportion will go on-site. This will be the preference for many developers. Speak to planning authorities or developers in your area to identify possible requirements for specific habitats.
As a last resort, a developer cannot carry out BNG on- or off-site, there is a mitigation scheme involving bio-diversity credits, which is seen as a last resort. In terms of delivery, credits and units are the same, although they are valued differently. Credit values are set by Government and vary depending on habitat type. For example, specialist upland oak woodland could be £125,000/credit. However, it is questionable who would destroy that type of habitat. Landowners could approach the local planning authority to discuss nearby future developments and the need for creating credits.
What is a credit?
Susan Twining, chief land use adviser for the CLA
That will be a really steady source of income which is guaranteed, giving a bit more resilience in your business
Any agricultural developments outside of permitted development and more than 1,000sq.m will need to adhere to BNG requirements from January 2024, and smaller sites from April. BNG also creates opportunity for landowners, as developers who cannot adhere to BNG themselves, looking to farmers to undertake BNG off-site. Farmers will then get paid for the BNG units created. Susan Twining, chief land use adviser for the CLA, says BNG should be seen as a diversification option for part of the land holding. She says: “That will be a really steady source of income which is guaranteed, giving a bit more resilience in your business, allowing you to create some beautiful habitat that will add value to the rest of the farm.”
Why is it of interest?
Susan says: “The Biodiversity Metric [designed by Natural England] is used to identify the biodiversity base level and what the requirement is as the net gain.” The number of biodiversity units which can be created on a piece of land will depend on what it is currently used for and what habitat will be created. For example, turning a 10ha (24.7-acre) arable field into lowland meadows could generate about 60 biodiversity units. It is possible for farmers to use the Biodiversity Metric themselves to get an idea of the number of units they have. An ecologist will then be needed to verify the units and they could also answer any questions about what actions might be taken. Alternatively, an ecologist can use the Biodiversity Metric and advise on how many units could be created and how. This may mean putting in hedgerows, woodland or wetland and ponds, for example. Susan says: “It has to be more than what you already have. That is what you have to be aware of. “You cannot just put a pond or Countryside Stewardship land in. It is the additional units you are selling.”
Creating a unit
The main routes for entering the market are:
Available options
Selling land for someone else to deliver and manage. Leasing land to a project developer who will do all the work and take an increased share of the risk. Working with an intermediary organisation to design and negotiate the agreement. Developing your own projects and marketing direct to buyers or through a broker.
There are two main types of BNG arrangement:
Habitat banking: This is when a landowner begins habitat creation on their land in advance of selling the corresponding biodiversity units. Bespoke habitat creation: Where a landowner creates habitat to meet the requirements of a developer upon the sale of bio-diversity credits.
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The unit price will vary and is decided by free market negotiations, the type of unit, supply and demand, the type of agreement and share of risk (although it will be priced lower than a credit). The mitigation hierarchy incentivises BNG on-site and in the LPA, but there may be options for BNG outside LPAs in some situations As you move further away from the development, more units will be needed to replace what has been lost. The type of habitat also impacts value. For example, habitats deemed as highly distinctive, such as upland birchwood or sea buckthorn, have a higher value than habitats of medium distinctiveness, such as heathland and scrubland. Susan says: “There is a lack of market transparency on unit price and farmers need to carefully assess an agreement to see how it fits with the farm and the cost and income from the designated land to ultimately decide whether they are happy with it.” More units will be created by taking land in poor condition and putting habitat into that. Some farmers put Higher Level Stewardship land into BNG, but more land will be required to create the same number of units. It is important to remember that you cannot be paid for the same thing twice. However, BNG can be stacked with nutrient neutrality. A habitat management plan will be included in any agreement, so it could include the requirement to graze livestock.
BNG’s worth
Once the 10 per cent BNG has been achieved, it becomes a legal obligation to maintain the site at that level for 30 years. The habitat work will need to be legally secured through either a section 106 agreement or a Conservation Covenant, says Shannon. This will be routinely checked by the local planning authority and any developer involved in the contract. At the end of the 30 years, the land does not need to be managed for further biodiversity improvements, although the availability of different income streams to further enhance the habitat may be attractive. The land could be entered in another 30-year agreement or other nature markets, such as the carbon markets, could be considered, for example.
Management
Listen to CLA’s BNG webinar on opportunities for landowners. Read Defra’s guidance on BNG at gov.uk/guidance The CLA is developing a ‘Biodiversity Unit Finder’ to match landowners with developers looking for BNG. Find out more here
After the 30-year agreement, there is a risk that land could be designated as a Site of Special Scientific Interest.
Risk of designation
BNG is a 30-year, legal commitment so be sure you are able to commit. Consider implications for successors. Do you have the knowledge, equipment and funding to create and manage the habitat to the standard required? Take professional advice.
It is a 30 year commitment
There will be specific habit demands in a planning authority. Speak to the local planning authority, developer, land agents and environmental consultants to establish what demand there is. Are there specialist bio-diversity units you could produce for other areas?
What is the habitat demand in your area
If land is not available close to the development to create a similar habitat to the one lost, it will not work. You have to replace like for like.
It is not for everyone
Key considerations for BNG
Units are created before a need is identified. Bespoke habitat creation is likely a more attractive route, as units are designed to meet a requirement.
Habitat banking has risk
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Implications vary depending on the type of agreement and what the payments are for. Take professional advice.
Tax implications
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Say the value of the BNG is £25,000/ha over 30 years. How is that paid? Is it on one lump sum or in annual payments?
Check how you are paid
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The unit income per hectare is not profit. Take into account management costs and fees when using intermediaries or brokers.
Think about brokers/ management fees
There is a lack of market transparency on unit price and farmers need to carefully assess an agreement
Any agricultural developments outside of permitted development and more than 1,000sq.m will need to adhere to BNG requirements from January 2024, and smaller sites from April. BNG also creates opportunity for landowners, as developers who cannot adhere to BNG themselves, looking to farmers to undertake BNG off-site. Farmers will then get paid for the BNG units created. Susan Twining, chief land use adviser for the CLA, says BNG should be seen as a diversification option for part of the land holding She says: “That will be a really steady source of income which is guaranteed, giving a bit more resilience in your business, allowing you to create some beautiful habitat that will add value to the rest of the farm.”
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Listen to CLA’s BNG webinar on opportunities for landowners. Read Defra’s guidance on BNG at gov.uk/guidance The CLA is developing a ‘Biodiversity Unit Finder’ to match landowners with developers looking for BNG.
We've created two guides to help you get going. The first shows how to begin habitat creation on your land and the second shows how to create a habitat to meet the requirements of a development.
Get started on BNG
Our guide to: Habitat banking
Our guide to: Bespoke habitat creation
Legally secure the land with a conservation covenant agreement (with a responsible body) or planning obligation (with a Local Planning Authority) – you must commit to managing habitats for 30 years
Where a landowner begins habitat creation on their land* in advance of selling the corresponding biodiversity units
Habitat banking
* Landowner habitat banking on their own land, not operating a lease model
Legally securing the land
Agree a habitat management and monitoring plan with the responsible body or Local Planning Authority to achieve your planned enhancements
Engage an ecologist to carry out a baseline habitat survey to determine what habitats are present and in what condition
Decide what habitats you want to create and enhance - you can enter the baseline habitats and planned enhancements into the off-site tab of the biodiversity metric to get an idea of biodiversity unit output
Baseline survey and optioneering
Apply to register your land as a biodiversity gain site
Natural England will assess applications to ensure they meet eligibility criteria
Once approved, your site will be recorded on the public register
Registering the land
Agree the sale of biodiversity units to a development
Agreeing the sale of biodiversity units
Developers will want to purchase biodiversity units from specific habitat enhancements to meet the impacts they are having on site (in line with metric trading rules) – units generated will depend on location of the development and habitat creation timings
The cost of biodiversity units should be sufficient to cover the costs of creating or enhancing the habitat, any necessary monitoring, and maintaining it for a minimum of 30 years
Record the allocation on the register (you can do this, or the developer can do this with your consent)
Local Planning Authorities will check that developments have the correct allocation before approving their biodiversity gain plan
When the biodiversity gain plan has been approved, the development can commence
Recording the allocation on the register
Ongoing management, monitoring and reporting
Manage and monitor habitats for at least 30 years in line with the actions set out in the legal agreement and habitat management and monitoring plan
Report on the progress of habitat enhancements to the Local Planning Authority or responsible body
Habitat creation and enhancement can start
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years
BACK TO Biodiversity Net Gain considerations ARTICLE
Where a landowner creates habitat to meet the requirements of a development, upon the sale of biodiversity units
Bespoke habitat creation
Apply to your register your land as a biodiversity gain site and allocate units to the development
Once approved, your site and allocation will be recorded on the public register
Registering the site and recording allocation on the register
Agree to enhance or create specific habitats to meet the requirements of a development
Enter the baseline habitat information and planned enhancements for your site in the off-site tab of the biodiversity metric as well as the development information in the on-site tab to determine biodiversity unit output
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Matthew Doran, Land Use Policy Advisor
Farmers need to be aware that they’re signing a legally binding, long-term contract
Are carbon markets right for you?
Estimating the amount of carbon emitted and sequestered will provide an estimate of total emissions and sequestrations from a landholding or enterprise. This allows businesses to assess how far they are from net zero. This is important because when a landowner sells their carbon credits, they surrender the right to include this carbon in their own carbon footprinting calculations. The CLA recommends most landowners do not begin trading carbon until they have reached net zero or net negative unless the trade helps to finance emissions reductions.
Establish the balance of the carbon account for the landholding
STEP 1
In voluntary carbon markets, companies which want to offset their carbon footprint buy credits from landowners and land managers who sequester carbon on the company’s behalf. Offsetting means compensating for greenhouse emissions by either removing an equivalent amount of carbon from the atmosphere elsewhere, or avoiding equivalent emissions entering the atmosphere from another source. Companies engage in voluntary carbon markets to reach their net-zero targets, gain a marketing advantage, and/or because they view it as the right thing to do. Carbon markets do not trade the physical carbon that’s sequestered from the atmosphere by plants and soils. Instead, it’s the right to account for the carbon on a business’s balance sheet which is exchanged between seller and buyer. Some carbon markets pay farmers and land managers to avoid emissions they otherwise couldn’t afford to avoid – for example, financing peatland restoration or a switch to regenerative agriculture.
What are carbon markets?
Farmers manage the land and natural resources such as hedges, trees and peatland that sequester and store carbon. These are currently the only methods to remove carbon from the atmosphere at scale, so are essential for reaching net zero as a whole economy. Carbon markets enable landowners to pay for environmental work which they would otherwise be unable to finance. Indeed, if the land-use change has already started or it makes good financial sense without the carbon-market payment, the landowner is unlikely to satisfy the additionality requirement to enter a high-integrity carbon market (see Box 1).
Why are they of interest to farmers?
Voluntary carbon markets trade carbon through a number of codes and standards. These are independently validated protocols which estimate, and subsequently verify, the cumulative amount of carbon removed from the atmosphere across a project’s lifespan, then issue credits to the product developer, i.e., the farmer. The Woodland Carbon Code and the Peatland Code are well established and government backed. Numerous other standards and brokerages exist, but are less mature. Before signing up to a code or scheme, follow the four step process to establish whether it’s right for you (see 'Are carbon markets right for you?' box below).
What codes are available for farmers?
Voluntary carbon markets present contractual and reputational risks if landowners do not undertake due diligence to examine the integrity of the scheme(s) they enter. To ensure you are choosing a robust, high-integrity carbon code or standard, check whether its methodology satisfies six key principles (see Principles for high integrity carbon markets box). Farmers need to be aware that they’re signing a legally binding, long-term contract. Contract lengths will vary, but a common length is 30 years. Over that time, farmers have an obligation to maintain the habitat sequestering the carbon which they’ve sold. It’s not a light undertaking and often involves permanent land-use change, the tax and land-valuation implications of which need careful assessment. Contracts should be drafted to permit the benefit and obligation of the contract to be transferred to a new owner should the land be sold.
What are the common pitfalls?
The income from entering a parcel of land into the carbon market may not alone be sufficient to justify permanent land-use change. However, the same parcel can be entered into multiple nature markets and Defra’s Environmental Land Management (ELM) schemes where compatible, provided additionality requirements are satisfied in each market. This is known as ‘stacking.’ For example, a landowner wanting to create a large native woodland might considering stacking income from carbon markets alongside an English Woodland Creation Offer grant to establish the woodland, Countryside Stewardship to maintain it, and other nature markets like Biodiversity Net Gain.
Can you enter land assigned for carbon credits into other markets?
Carbon credits are priced according to supply and demand: it depends on the number of quality credits available. Buyers of credits (technically, ‘Pending Issuance Units’) paid around £24-25 per tonne of CO2e through the Woodland Carbon Code in 2023 and the Peatland Code in 2022 (the most recent year with data). Sellers who combine carbon credits with biodiversity benefits can attract premium rates.
What are the potential rewards?
Although carbon markets offer a diversified income and will be essential to reaching net zero, they only apply to some habitats currently (woodland, peat, and soil carbon) and may not be the best way to receive money for delivering environmental goods. Consider whether the land-use change involved is right for your land and business. The contract is the all-important document, so conduct the same level of due diligence and risk assessment on it as you would with any other long-term contractual relationships.
What would your final message be to farmers considering carbon markets?
STEP 2
Carry out a Natural Capital Baseline Assessment
Conduct a natural capital baseline assessment to estimate, ideally quantitatively, the baseline state and possible uplift for a range of natural capitals, including carbon. This will help establish what combination of private nature markets and ELM schemes will deliver the most favourable returns. The assessment can be carried out by the farmer, an advisor, ecologist or land agent, depending on experience, aims, and budget.
STEP 3
Think about which carbon code(s) and/or standards might suit
Identify the available codes and standards (or brokerages) which best fit your landholding and goals.
STEP 4
Check the financials
Work out how establishment and maintenance costs will impact the long-term viability of a project. Examine the current price of carbon per tonne. Estimate the expected annual revenue. This is roughly equal to the habitat’s average annual carbon sequestration rate x price per tonne x area entered into the market. The value of UK carbon offsets has increased over time, but this is not guaranteed. If working with a third party, factor in the amount of commission taken.
NOTE: Farmers can sell their own credits or use an intermediary to sell credits on their behalf. Farmers have the option to lease or sell the land to others to generate carbon credits.
A carbon offset must remove (or reduce the emission of) additional carbon compared to what would have occurred without the transaction through the carbon market.
1. The carbon sequestration should occur as a result of entering the carbon market (additionality)
Principles for high integrity carbon markets
The carbon stored in existing carbon stocks, such as woodland and soils, is not eligible for trading on the carbon market. The landowner would have to increase their sequestration rates for these to become eligible.
The more robust the offset, the longer a carbon market contract. Robust codes have a buffer pool of untraded carbon to mitigate against reversals or failures to deliver sequestration.
2. Carbon offsets should aim to store carbon indefinitely, and not reverse gains at the contract’s end (permanence)
Farmers are not in control of this factor, but carbon market companies and certifying bodies must have due regard to avoid leakage.
3. An offset shouldn’t lead to higher emissions elsewhere (leakage)
This ensures that the traded carbon credits match the amount of carbon sequestered or emissions reduction completed.
4. Offsets should be accurately quantified
High-integrity projects should be subject to ongoing verification.
To allow credits to be traced back to their origin and not double counted.
6. Carbon credits should be uniquely and securely registered
A carbon credit can only be included in one carbon account.
This means that once a farmer sells carbon credits, they cannot use these in their own carbon account.
5. Double accounting is not allowed
Voluntary carbon markets trade carbon through a number of codes and standards. These are independently validated protocols which estimate, and subsequently verify, the cumulative amount of carbon removed from the atmosphere across a project’s lifespan, then issue credits to the product developer, i.e., the farmer. The Woodland Carbon Code and the Peatland Code are well established and government backed. Numerous other standards and brokerages exist, but are less mature. Before signing up to a code or scheme, follow the four step process to establish whether it’s right for you (see box).
