News:

Richard Brown of Hexham & Northern Rural is now the sole Recommended Professional based in Northumberland for the Tenant Farmer’s Association (TFA). Acting for a large volume of tenant farmers within the county and north east region whilst covering a broad spectrum of tenancies and farms, Richard discusses a farm level approach to dealing with rent reviews.

With a raft of notices being served by Landlords either this autumn or last, the issue of the rent review has become a popular topic of conversation in many Farmhouses either directly affected or not. A farm rent review can undoubtedly be a daunting prospect, which can sadly be all too often compounded by Landlord’s agents requesting vastly inflated rental increases.

Whilst the rules may differ depending on the kind of agreement you hold; be that a traditional succession tenancy or a more modern farm business tenancy the principles behind a sensible approach to negotiations are the same. The first consideration to make when faced with a review is whether or not you are already paying a fair rent. Nobody should pay more than their farm is worth but if your rent has not been reviewed for 10 years and you are paying half that of all your neighbours in similar circumstances then chances are you will struggle to fend off an increase of some proportion at a review.

It is more likely however that your rent was last reviewed 3 years ago and is comfortably in line already. Either way to find this out for certain, it is essential to take advice from someone with local knowledge and day to day experience of the farm rental market.

Appointing an agent to act on your behalf can be something that some may wish to avoid at the risk of creating confrontation and inflaming a situation. As a tenant farmer himself Richard understands the desire to maintain a good relationship between parties and on this basis is always happy to provide confidential advice to clients without necessarily becoming actively involved in negotiations. The key to a quick resolution in a rent a review is the time it takes to ensure the other side is taking a realistic approach which is specific to the holding in question. This is not a one-solution-fits-all science.

Agriculture may well be currently experiencing greater returns but over inflated rents that cannot easily withstand inevitable fluctuations in prices, costs or yields let alone allow investment in farms are in nobody’s best interest.

George Dunn of the TFA admits that it is “inevitably we will see a number of the more difficult cases proceeding to arbitration but hopefully with the benefit of the TFA’s arbitration insurance.” Moreover and from his own experience Richard confirms that despite “pub chat” of extreme rates, it is pleasing how many sensible deals are in fact being struck.

Farmers have been presented with a unique chance of assistance for certain types of investment in their farm business under the Farming & Forestry Improvement Scheme (FFIS).

The attractive Scheme is part of the Rural Development Programme for England (RDPE) and is a scheme of support, developed to help farming, forestry and horticultural businesses in England become more efficient at using resources.

This scheme aims to help make farming businesses more profitable and resilient whilst reducing the impact of farming on the environment. The coalition government has set aside £20 million for this scheme and applications have been invited from the 16 November 2011 and must be completed by 17 January 2012. Farmers can gain up to 40% grant funding for eligible investments, while upland farmers can claim up to 50% grant funding. The minimum grant that can be awarded is £2,500 and the maximum is £25,000.

 Applicants will be assessed on their ability to meet one or more of six objectives detailed below:

• Animal Health and Welfare: Projects which bring about significant improvements in farm animal health and welfare. Eligible items include cattle handling systems, computer software to monitor animal health, foot trimming facilities, EID readers.

• Nutrient Management: Improvements in the use of farm manures and slurries so as to improve soil quality and reduce reliance on artificial fertiliser. Eligible items include slurry injectors, mechanical slurry separation systems and Global Positioning Systems.

• Energy Efficiency: Projects to reduce or recover energy use on farm resulting in a reduction of farm energy bills and carbon dioxide emissions. Eligible items include heat exchangers, gel coolers and ice builders.

• Water Resource Management: Rainwater harvesting, recycling and reuse systems to reduce reliance on mains water. Eligible items include pipework specifically to intercept and divert roof water to a storage facility, rainwater harvesting equipment.

• Forestry: Projects which improve the economic value of forests through the efficiencies of improved processing and adding value. Eligible items include timber processors, forwarders, forestry trailers, tractors mounted forestry grabs.

There are a wide range of items eligible to be claimed under the Farming & Forestry Improvement Scheme and farmers are encouraged to seek professional advice if they are interested.

Tim Sedgewick of Hexham & Northern Rural says: “The introduction of this new scheme gives farmers a greater incentive to proceed with that investment they have been thinking about. Some may have been thinking about that new cattle crush or sheep crate and now is the time to make that reality with the aid of the FFIS.”

Hexham & Northern Rural are currently monitoring the emerging scheme and would be delighted to assist any farmers thinking about applying.

Hexham & Northern Marts held their second Collective Machinery Sale of the year at Sedgefield Racecourse on 29th October 2011. This sale was only the fourth of its kind held by the company in County Durham and the hard work is really starting to pay off.

Supported by dedicated local fieldsman John Johnson and Matthew Shepherd the company combines their knowledge of farmers in the area with an expertise in holding collective sales.

The location of Sedgefield Racecourse has also aided the sale and it has proved an excellent venue. The event is now regarded by many as the principle Collective Machinery Auction in County Durham.

Auctioneer Richard Brown of Hexham & Northern Rural commented, “The sale on Saturday had an excellent entry of small tools, timber, implements, and tractors and thanks to a large attendance of buyers saw a strong trade throughout. Hexham and Northern are happy to hold this sale at Sedgefield Racecourse and hope it continues to grow.”

Over 600 lots of machinery, implements and small tools were entered this year with interest in some from around the country.

Top prices on the day included:-

Fendt 312 - £11,200, Massey Ferguson 6180 - £10,300, Ford 7840 - £6,200, Spearhead Mower - £2,000, John Deere 545 Baler - £1,500.

The next sale at Sedgefield Racecourse will be the Spring Sale held in May 2012. Entries are now being taken.

The time is now for farmers to invest in a domestic wind turbine according to Tim Sedgewick of Hexham & Northern Rural (HNR). Since the launch of the Government’s Feed In Tariff (FIT) many farmers in the North East and Borders have opted to take advantage of the relatively suitable conditions for a small scale turbine.

Tim Sedgewick says: “The price of electricity is only ever going to go one way and that is up, with a domestic wind turbine in operation you could be saving the average cost of household electricity at around 11p per unit. Surplus electricity ‘Fed’ back into the grid is eligible for the ‘Export Tariff’ which is calculated at 3p for every kWh produced. That is on top of the ‘Generation Tariff’ which is approximately 28p for every unit produced and this is paid by your energy supplier.

In the best case scenario therefore on a good site where electricity demand is equal to that being supplied by the machine, an income of 28p will be generated plus a saving of 11p will be made for every unit produced. This could enable payback of your initial investment in approximately 4 years.

The current Feed In Tariff rates are under negotiation and the Government is expected to announce a large reduction in the rates paid coming into force on 31st March 2012. Therefore making it all the more attractive to get sgined up and locked in for the next 20 years at the existing high rates. Mr Sedgewick continues: “Who’s to say in 5-10 years time electricity prices haven’t doubled and the advantage of producing your own power is even greater? By investing now in a wind turbine farmers will be eligible for the Feed In Tariff as it stands.”

However there are many factors involved with starting up a wind turbine including:

• Appropriate Site

• Grid Connection

• Apparatus Selection

• Planning Permission

With all these factors in mind and time running out to take advantage of the current high Feed In Tariff, there has never been better time to invest in that wind turbine you may have been thinking about. If you are interested in the possibility of installing a wind turbine on your property (be it landlord, owner occupier or tenant) or simply require more information please contact Tim Sedgewick or Richard Brown.

During 2010 HNR had the privilege of acting for several farmers handling end of tenancy matters, following a surrender of their tenancies for retirement or other reasons. 

As an appointed professional for the Tenant Farmer’s Association, Richard Brown is asked to act for many new farming clients throughout the Northumberland and County Durham to provide advice on all manner of large and small matters. However, as a farmer’s son himself Richard gets the most satisfaction when acting for a tenant who is retiring from a successful career in farming. This is exactly the situation when HNR acted for Howard Forster who retired from Beaumont House, Hexham, having occupied the holding for most of his life. Howard made comment that “Richard handled all our end of tenancy matters including the farmstock sale and I was highly satisfied with his excellent conduct acting on my behalf throughout.”

In this instance, please contact HNR in confidence if you think we can provide advice on end of tenancy matters, rent review or any other tenancy related issue.

Whilst a pylon line crossing your property could not be described as desirable, as with many large structures they eventually become less obtrusive as a necessary evil.

National Grid accepts that the presence of their apparatus could devalue an entire holding and if not certainly the residential element. In these circumstances National Grid are prepared to consider a one-off capital payment to a grantor to replace the existing annual wayleave payment. These one-off payments are calculated as a percentage of a property’s residential value and dependent on the proximity of the apparatus from the property and the detrimental impact (injurious affection) it is judged to have on its value.

If you need more information about your existing arrangements with National Grid or wish to consider converting your wayleave to an easement in return for a one-off payment please contact Richard Brown.

It is vital that you check if your farm falls with NVZ designations as non compliance can result in penalties to your Single Farm Payment. Compliance for newly designated NVZ’z started in January 2010.

If your farm is in a NVZ, you must continue to comply fully with the requirements of the Nitrates Action Programme. You may wish to consult the HYPERLINK "http;//www.defra.gov.uk/environment/quality/water/waterquality/diffuse/nitrate/help-for-farmers.htm" guidance leaflets produced by Defra and the Environment Agency to help farmers in NVZs understand the requirements, and implement the Action Programme measures. HNR can assist in setting up the requirements of complying with the NVZ regulations.

If your farm is not in the NVZ, you do not have to comply with the NVZ rules, although you should follow the Code of Good Agricultural Practice and must comply with the requirements of the Water Resources (Control of Pollution) (Silage, Slurry and Agricultural Fuel Oil) Regulations.

 Hexham & Northern Rural (HNR) had an extremely active 2010 offering specialist advice and assistance to an ever increasing number of new and existing client’s who expressed interest in constructing a small scale turbine. Typically HNR now have in the region of 30 different sites at various stages from initial consultation through to planning and construction on apparatus ranging from 6kW to 15kW. 

Richard Brown says “the large volume of interest is not surprising as in the right location the correct piece of apparatus is a great investment.” This situation has largely been created by the Government’s Feed In Tarriff (FIT) which is an incentive guaranteeing revenue for all renewable energy produced by these machines.

HNR adopts a strict approach when making an initial assessment of a farm to ensure the potential viability of a project before any cost is incurred.

Richard describes the key to HNR’s approach as “sound, independent knowledge,” based around three tested principles:

• Appropriate Geographic Site

There are few locations in the North of England that could not on occasions provide adequate wind speed to drive any turbine. However it is the average wind speed that is most important and this should preferably be above 6 metres/second (m/s) and certainly not less than 5 m/s.

• Grid Connection

This can be a commonly overlooked aspect of an installation. It is absolutely vital to ensure there is sufficient capacity on the line to enable surplus power to be “fed in” to the grid. This may not be the case in more remote locations and measures will need to be taken to remedy the situation. Needless to say it is better to address this scenario before any planning application is submitted.

• Apparatus Selection

When deciding upon the best turbine for your property it is vital to look around at the various manufacturers’ different machines. However when approaching the manufacturers direct it is unsurprising to find them all claiming their machines to be the best. It is for this reason that that HNR have teamed up with two independent firms of installers who can provide impartial advice as to the best machine for your site.

HNR handle all aspects associated with achieving planning permission.

If you are interested in the possibility of installing a wind turbine on your property (be it landlord, owner occupier or tenant) or simply require more information please contact Richard Brown.

Planning permission to build a dwelling in open countryside is generally not permitted, which is of course to the overall benefit of those who live there. However, one exception to this planning policy is if a property is required for the purpose of agriculture i.e. to house a farm worker or family member.

Thanks to their knowledge and experience in this area, HNR were involved with several planning applications for new on-farm dwellings in the countryside during 2010.

Before embarking on such a planning application, five key tests must be satisfied;

·       the need must be for someone wholly or primarily engaged in agriculture, and or part-time.

·       there must be no other dwelling on the holding or suitable elsewhere that could be used.

·       the unit and agricultural activity must have been in operation for at least three years and have been profitable for one of them.

·       the proposal must be likely to satisfy the normal planning rules i.e. access, drainage, appearance and siting.

·       there must be a clearly established functional need.

Richard Brown comments that, “whilst HNR will submit and manage a planning application, their most vital input is to prepare a thorough and detailed Agricultural Appraisal to satisfy the functional need test” (see bullet point 5). This appraisal will set out the existing farming business and calculate the related requirement for on farm labour.

When assessing this part of an application, the local authority will employ an independent farm consultant. It is therefore vital that a first class report is prepared because if it were to fail the entire application could go no further.

Planning approval received in these circumstances will be subject to an agricultural occupancy restriction.

Due to the volume of planning work now undertaken, HNR have a register of preferred architects and companies able to provide the increasingly “popular” environmental reports requested by Planning Authorities.