Farm Diversification

Diversifying your farm to use the land for other profit making ventures is rapidly becoming more and more popular. And given the current political climate, with farmers facing more uncertainty than ever before, it’s no wonder so many are looking to diversify.

 

Farm diversification is when a farmer uses their land for alternative purposes, in order to generate additional revenue. As a solicitor who specialises in commercial property and agricultural law, I’ve certainly noticed an increase in farmers going down this path in recent years.

While I believe it’s a fantastic concept, there are a number of potential pitfalls and matters to be aware of to ensure you’re following all the right steps from a legal point of view.

Farm stays are a hugely popular method of diversification. Many farmers are now either letting out their farmhouses or building holiday homes from scratch on their land, marketing them as the ideal place for an idyllic country getaway.

While this is a clever and fuss free (if letting out an existing building) way to generate an additional income, it’s not without its fair share of legal considerations.

If building a holiday home from scratch, or altering a building on your land, it’s vital to ensure all the relevant planning permissions and building control permits are in place. This could include securing planning consent for a ‘change of use’, which would allow you to let the building out to guests.

There has been a lot of publicity around Airbnb recently – with certain local authorities requiring parties who let their home out this way to obtain ‘change of use’ consent. The rules vary from area to area, so it’s worth contacting the Council to ensure you’re following all the necessary procedures.

Another common type of diversification is opening a farm shop. This may involve selling produce directly from your farm, opening the land up to members of the public who can come on-site to buy the goods. If you live on the farm and are there day to day, you’ll probably think of it more as a place of work than a retail environment. However, if customers are going to be visiting and spending money there, certain regulations must be followed.

The main lookout here is public safety - it’s vital that a risk assessment of the area is carried out. Even if you intend to sell from an existing building with no alterations, if you’re selling any kind of processed produce, you will still need the relevant permissions. Again, I would advise speaking to your local authority and seeking the advice of a legal professional to ensure you have taken all the necessary steps before opening up to the public.

The list of diversification options is plentiful and varied – from hosting music festivals, to selling Christmas trees or even opening your farm up to members of the public looking to get a taster of rural life. While these are all popular ventures, they all require various legal agreements such as public liability insurance or entertainment and alcohol licences.

It may sound like a complicated process, but a good solicitor will be able to look at your business plans and outline all the necessary legal steps you need to take to ensure you reap the benefits and don’t encounter any pitfalls.

If you’re thinking about using your farm to generate an additional income stream, my advice would be to get in touch with a solicitor at the earliest possible stage.

Don’t start altering a building in the hopes of letting it out as a holiday home only to realise you can’t get the relevant permissions. If you seek legal advice right at the beginning of the farm diversification journey, we can ensure you don’t fall into any traps.

 

This article first appeared in The Scottish Farmer