The changing face of a family farm

Farming and family farms have changed and evolved many times over the years, but for many farmers, it must feel accelerated for their generation following post Brexit changes to the Basic Payment Scheme and replacement environmental schemes and then the announcement of changes to Agricultural Property Relief and Business Property Relief scheduled for March 2027. This coupled with endless red tape and legislation to get to grips with.

All frustrating at a time when the public’s support for British farmers is at an all-time high and there has been a huge interest following TV shows such as Clarkson’s Farm.

Whilst these issues are causing genuine anxiety there is now some time to plan and consider how your farm business will adapt. Be in a position to consider all the options and how they could work for you and your family, especially if you plan to hand over to the next generation.

When approaching reviewing and possibly restructuring any business, you begin by reviewing the whole business structure, operations and finances to help identify and improve efficiency, increase profitability and address current and future financial shortfalls. Here at Gullands, we can work with you to develop the legal framework to ensure the business continues to operate successfully.

Business structure

Start by looking at the business structure.  How is the business and the assets held and in light of future changes is this still the most effective way? Farmers increasingly need to work with their tax and legal advisors as each farming business is unique, so you need to make sure you have a tailored solution which works for you and your plans now and in the future.

Business operations

Next, review your farming operations.  The greatest threat to your future success might actually come from changes to the climate or market conditions. Diversification is one option but not the only option.

Diversification projects can be a good way for other family members who want a sustainable role in the farm, but where current operations don’t allow for it. Risk needs to be limited and thought given to the structuring of any new business projects.

Diversification could also involve renting land and/ or buildings to people outside of the family for their own enterprises. It doesn’t mean all of the responsibility falls on you to change or adapt, just how the assets are used. Make sure you protect yourself and have an agreement in place that works for you to avoid any surprises or disputes along the way.

Do you have the right people in the right roles, i.e. those who need to make the day-to-day decisions able to do so?

All too often there are too many people involved in the business structure or are in roles doing tasks they have always done for pay it is difficult to justify. It’s hard but ask if they still need that level of responsibility or if they are the right person for the role and is there a more efficient way of doing it.  This is hard to address in a family business, but knowing when it is time to take a step back is important. Create a structure which is fit for the business you farm now and, in the future, not the one you farmed 20 years ago.

Review finances

When reviewing business finances, you might have assets that are no longer as effective to keep, or which might be sold and leased back to free up working capital or to provide funds to invest. Review all financial arrangements and make sure you are not tied into agreements which no longer work or are too expensive.

If you are considering a diversified project, then there might be alternatives to help you attract investment or grant funding available without you taking on all of the financial risk.

Finally, please do talk to your advisors about how they can help.  We are at both the Weald of Kent Ploughing Match and have representatives at the Gravesend and Rochester Ploughing Match. Do come and talk to us and together we can help to lift some of that burden so you can make informed decisions which are right for your business.

Sarah Astley is an Associate Solicitor at Gullands Solicitors www.gullands.com