Challenges and Opportunities for Farmers in 2025

Jo Edwards shares her thoughts...

As we start 2025, there are many challenges and opportunities facing the farming industry and now really is time to take stock and contemplate the opportunities that are out there and also assess the assets you possess and start to formulate plans for the future.

There has been much publicity about the changes in the Inheritance Tax system, and as ever with these things, the devil will be in the detail, which as yet, we are not in receipt of, but that does not stop people looking at their situation and ensuring that they are fully aware of exactly who owns what and in what proportions. Whilst we are waiting for the full details to be released by the Government, we are advising clients to start to formulate a list of all of the assets they own, be those residential, agricultural or live and dead stock in order that when the matter has to be dealt with, either with planning for the future or the inevitable, there are no nasty surprises for example, whereby you thought that 50 acres of the farm was held in joint ownership by husband and wife, but upon inspection of the Title Documents, it is found that it is owned 100% by one party.

The turn of the year is also time to start making plans if you are contemplating selling any property. As the old adage says "you only have one opportunity to sell something" and therefore, planning is key to ensure that you are selling the asset to its best advantage, at the correct time and into the correct market.

In order to maximise a smooth sale, preparation is key to try and ensure minimal delays and negotiations in regard to any inconsistencies, queries or anomalies prior to the property going to the market. The sale of an asset with no question marks for potential purchasers leads to both a smoother sales process, a quicker completion, and also less opportunities for purchasers to try and negotiate any reduction or changes to agreed sales terms.

This time of year is always a good time to reflect on how things have gone over the last 12 months, and what can be done to improve things in the future. This is especially relevant now given that another disappointing announcement made by the Government in the budget was the significant reduction in BPS payments for 2025.As I am sure you will have read many times now, the reduction in BPS on the first £30,000 of the de-linked base payment is 76% and those who had a de-linked base payment over £30,000 will receive no BPS in relation to any figure over £30,000. The maximum BPS payment which will be made to any claimant in 2025 is just £7,200.

This slightly quieter time of year allows time for looking at ways of trying to make up at least some of the shortfall which this sudden reduction in BPS will lead to.

SFI is now fully open to applicants and for anyone who is not already in an environmental scheme, it is worthy of a genuine look to see if there is something which would compliment your farming operation and provide some additional income.

Alongside SFI, DEFRA have recently announced that they will be opening applications for Higher Tier Countryside Stewardship. It has been almost 2 years since the last Countryside Stewardship Higher Tier application window closed, but we have now received details about the rolling out of the new scheme. The scheme will not be open for applications until "Summer of 2025" and will be by invitation only. Therefore if you have been contemplating Higher Tier, it would be prudent to contact Natural England to see if they have your farm as one whom they will be advising the RPA to invite for an application.

Although this limited roll out is frustrating and doesn't provide us with details as to when it will be open for general applications, this news does allow those who have been wavering, waiting for progress with the Higher Tier, to make some decisions and possibly look at putting together a Sustainable Farming Incentive Application, as this will at least provide a stop gap and some funding coming into the farming business whilst we continue to wait for the Higher Tier Countryside Stewardship Scheme to be open to all applicants.

Both SFI and the Higher Tier have to be applied for through the RPA online portal. If you are contemplating either Higher Tier or SFI, it is imperative that you ensure that your Rural Payments portal is up to date, and that you check to ensure all field parcel data is accurate and correct, as this will simplify and speed up the application process.

Ultimately, this turn of the New Year is an opportunity to take stock but also to look at the many options which are available to the farming industry and start some planning.

There is no doubt that the industry is in for a challenging period going forward, but with thorough planning and preparation work, there are opportunities out there.

Finally, may I take this opportunity to wish you all the very best for 2025 from all at PFK Rural.

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Land at Greengill Bank Farm, Morland
 

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Saturday, 25 January 2025
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