Talking buying or selling land

Agri-environmental schemes are government-backed initiatives which pay farmers to make their agricultural activities more sustainable. They aim to increase biodiversity, restore the landscape, promote wildlife and to improve the quality of water, air and soil.

Given the hardships many farmers have suffered due to Brexit, the pandemic and more recently the cost-of-living crisis, it is understandable why so many have embraced the concept of receiving subsidies to ‘go green’.

But what schemes are available and what are the implications if you sell agricultural land which is subject to one of these schemes? Our agricultural law specialist at Ware & Kay Solicitors in York & Wetherby, reports.

Shortly after the Agriculture Act was passed in November 2020, the government published The Path to Sustainable Farming: An Agricultural Transition Plan 2021 to 2024, which outlined its intention to reward farmers for delivering mainly environmental benefits, rather than for the amount of land they farm.

At the heart of this new regime is the Environmental Land Management Scheme (ELMS) which has three elements: the Sustainable Farming Incentive, the Local Nature Recovery Programme and the Landscape Recovery Scheme. These initiatives will gradually replace existing schemes such as Countryside Stewardship and Environmental Stewardship.

If you are selling land subject to an agri-environmental scheme, there are certain steps you need to take during the sale process, which includes:

• informing the buyer of any schemes the land is subject to and the requirements for each;
• making it clear in the particulars of sale whether the buyer will need to take responsibility for the scheme’s requirements;
• clarifying what payments, if any, need to be transferred to you on sale; and
• providing the buyer with all the relevant paperwork and information regarding the scheme well in advance of the sale.

If the buyer is willing to take on the agri-environmental agreement, this can be achieved by delivering the required paperwork to the Rural Payments Agency within 90 days of the land being transferred. After the sale, the buyer will effectively step into your shoes and all compliance responsibility will transfer to them.

If you have any outstanding revenue claim payments, you need to submit your claim to the Rural Payments Agency well in advance of the sale. If you miss the deadline, and the land is transferred, the outstanding payments will be made to the buyer, even if it was you who delivered the agreed requirements until the sale was completed.

If the buyer opts not to take on the agri-environmental agreement you can ask the Rural Payments Agency to terminate it; again, you will have to fill in the appropriate paperwork within the 90-day time limit.

If you are terminating a Countryside Stewardship agreement you will not have to repay the revenue payments you have received while you continued to occupy the land, provided there has not been a breach. If you terminate an Environmental Stewardship agreement, however, you may have to repay some of the payments you have received.

Cross-compliance rules – which farmers and land managers must follow on their holding if they are claiming payments under an agri-environmental scheme – are also an issue which you need to consider as a seller.

The rules apply from 1 January to 31 December across the whole of the holding and all agricultural activities. They impose requirements covering issues such as environment, climate change and good agricultural condition of land; public, animal and plant health; and animal welfare –

If your buyer has claimed rural payments on other land in the year of sale, they will be responsible for meeting the cross-compliance rules on the land they buy from you for the rest of the year.

If the buyer did not make any rural payment claims on other land, however, you remain responsible for ensuring the buyer abides by the cross-compliance rules on the sold land for the remainder of the year. If the buyer breaches the rules, your claims may be reduced.

We can help

Our agricultural law solicitors are familiar with dealing with environmental schemes in the course of buying and selling rural land and part of our service includes ensuring that sale and purchase documentation adequately deals with these schemes.

For more information on selling agricultural land, please contact our agricultural team on York 01904 716000, Wetherby 01937 583210 or Malton 01653 692247 to see how we can assist.