Diversify to survive after risk assessment
Diversification from agriculture to other types of land use is not a new idea, but it accelerated during the last economic downturn and when foot and mouth disease stalked the countryside. Then, many farmers were forced to diversify to survive and for some it was a huge success.
We anticipate that the current economic environment will see more farmers and landowners looking to diversify.
But there are legal issues that accompany such change, and it is important be aware of them.
One popular form of diversification has been the development of farm buildings for other uses, such as holiday homes, business units and residential care.
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Planning is the first obstacle, and owners must ensure that their schemes are passed by planning before committing to any major investment.
If the buildings are to be developed for any specific use, owners must ensure that they meet with stringent health and safety rules, and adhere to regulations for disabled access and other requirements. T
hey should also ensure that access and rights of way are covered.
Changes in use of buildings can come with some hidden tax and investment traps for the unwary, so owners should discuss all the options with their professional advisors before setting quite literally concrete plans.
Many farmers and landowners have turned to niche marketing, and this has manifested itself in the blossoming of farmers' markets, farm shops and specialisation in areas such as organic vegetables and traceable meat.
Where owners have established their own farm shops, they should be aware of local trading laws, hygiene regulations and health and safety laws.
This not only applies to the shop itself, but also to other parts of their land to which customers have access.
Many owners have transformed their land into leisure parks or sites for a wide range of leisure amenities, such as quad biking, off-road driving, trekking and other activities.
Legislation is strict in relation to how such businesses are run, and what health and safety systems must be in place.
Again, professional advice before the business has been set up is vital, if only to avoid unnecessary accidents.
In some instances, farmers and landowners have turned some of their land over to landfill or other forms of waste management.
UK environmental regulations are among the strictest in the world, and heavy fines and even custodial sentences await those who wittingly or unwittingly break the rules.
Owners of newly diversified businesses may find themselves employing staff in a completely different way.
There is a huge array of regulation relating to employment issues, from working time to parental leave, holiday and sick pay, health and safety and standard terms of employment.
Again, owners should investigate all the ramifications of taking on staff before they are appointed – legislation makes it far easier to hire than it does to fire.
Andrew Lugger can be contacted at Stones Solicitors LLP on 01837 650200.
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