Farmers and landowners considering diversifying into new areas are being warned to carefully consider both the pitfalls and benefits.
Leading agricultural solicitor Alexandra Phillips said more and more farmers were intrigued by the financial rewards of using their land in new ways, but are being put off by the legal issues surrounding diversification.
Official figures show about a third of all working age farmers have diversified their land and branched out into non-agricultural activities, such as solar or wind farms, other renewable energies or building rural holiday homes.
Associate solicitor Ms Phillips, from Midlands law firm mfg Solicitors, said: “If planned and executed well, the benefits of farm diversification can far outweigh the risks.
“It can offer fresh opportunities allowing the next generation of a family to use their skills to open up the business to the wider market. However, there are some key areas to consider and which many miss.”
Ms Phillips urged farmers to ensure they were complying with planning rules as any non-agricultural activities carried out on their land may require planning permission.
She said there may also be restrictions on the title of a property which can significantly hamper a project – alongside the impact rights of way can have.
Farm owners will also have to make sure they are complying with all the relevant tax laws and that they have adequate financial arrangements to fund the project.
She added: “A successful diversification project could create a new source of income for the farm and the family and provide a great deal of security by supporting the traditional farming business.
“However, it is essential that landowners are properly advised before embarking on such a project in order to avoid the legal consequences of the various pitfalls.”
