The Agricultural Transition Plan first set out the idea of a Lump Sum Exit Scheme. Since this document was released in 2020, there has been speculation as to how it will be implemented and the impact on those looking to extract themselves from the farming sector.
We now have a clearer understanding of the requirements and timings of the scheme. Inevitably with a DEFRA scheme, the qualifying criteria makes it much more difficult than it may first appear.
One of the principal rules is that any landowner wishing to take up the scheme will need to transfer out the majority their agricultural land. Whilst 5 hectares can be retained, the remainder must either be sold or rented out on a minimum term of five years. Will this mean a short-term increase of land market sales? Unlikely. Is more land going to be available on medium term lets? Possibly.
What has been abundantly clear in the past few weeks is that farmers and landowners are now picking up the phone and talking to agents about the future. Many conversations have been had about the merits of the scheme. Whilst most have dismissed the Exit Scheme due to the practicalities, financial payments, failure to qualify or tax implications, it has opened a discussion about the future and succession.
The topic of succession and the transition to the next generation is sometimes a taboo subject, particularly in the agricultural sector. This scheme has focused the minds of some senior farming family members and started the conversation, which otherwise may have been swept under the carpet. Whilst the Exit Scheme is unlikely to be a viable option for those wishing to continue the farming enterprise, the discussion over succession is hopefully a positive unintended consequence.
If you would like to contact Dan to discuss the Lump Sum Exit Scheme call 01630 692500.