Agricultural property—agricultural support
Produced in partnership with Ben Sharples and Caroline Baines of Michelmores LLP
Agricultural property—agricultural support

The following Private Client guidance note Produced in partnership with Ben Sharples and Caroline Baines of Michelmores LLP provides comprehensive and up to date legal information covering:

  • Agricultural property—agricultural support
  • Introduction to agricultural support
  • Agricultural support payable under the Common Agricultural Policy (pre-Brexit)
  • Direct payments—Basic Payment Scheme
  • Rural development support
  • Environmental designations

Where agricultural land is an investment asset for trustees, they should have an understanding of the main factors affecting its performance. There are many factors that affect the value and likely investment performance of agricultural property, eg access, location, size and soil type. The availability of agricultural subsidies is one of these factors and currently has a critical impact on the profitability of farm businesses.

Introduction to agricultural support

The agriculture industry has been supported for decades by the EU Common Agricultural Policy (CAP) through a variety of different subsidy schemes. Initially, these tended to be through price support, often paid via processors rather than direct to farmers.

More recently, support has been paid direct to farmers. In the 1990s, production-based schemes were introduced across a wide range of agricultural products ranging from sheep and beef to arable crops. Since 2005, most of the direct payment schemes have been amalgamated into an area-based scheme, the Single Payment Scheme, which was renamed the Basic Payment Scheme in 2015. In England, this resulted in a swift move away from production-based subsidies. Wales and Scotland have taken a more gradual route to an area-based scheme, probably in light of their increased need to support upland farms.

The Brexit vote will have a very considerable impact on UK farmers. When the UK leaves the EU in