Specialist Cropping

    Subsidies: Specialist Cropping

    Practical Subsidy Issues

    The perennial issue of choice of arrangement for growing specialist crops is once again on the horizon as the last day for entitlement transfer approaches on 2 April 2013. A few pointers are given below.

    Tenancy

    A tenancy:

    • is unambiguous as to land occupation
    • ensures the grower owns the crop and can comply with supermarket protocols
    • protects the land supplier from cross compliance liabilities caused by the grower
    • requires the submission of a RLE1 to lease the entitlements to arrive with the RPA prior to 2 April 2013 (Incidentally there is also a new guidance booklet).
    • may require assurance that the tenant activates the transferred entitlements to avoid their loss.  (where not activated for two or more years entitlements are lost).
    • may create a dual use situation.
    • may require landlords permission where the land supplier is a tenant.
    • historically resulted in a muddle by the RPA with late and incorrect payments (this is less likely now that only the number of entitlements, and not value, is significant).

    Licence

    A licence:

    • is easy to use and requires little thought.
    • is unproven and requires a court case to ensure safety.
    • requires the land supplier to put input into the crop ideally items such as primary cultivation or application of water. It cannot simply be a tenancy by another name.
    • means the crop is owned by the land supplier and if the land supplier went into receivership the crop would be treated as the land supplier’s asset
     
     

    Key contacts

    Andrew Wraith

    Andrew Wraith

    Director
    Food & Farming

    Savills Lincoln

    +44 (0) 1522 508 973

    +44 (0) 1522 508 973

     

    Steve Hollis

    Steve Hollis

    Director
    Food & Farming

    Savills Salisbury

    +44 (0) 1722 426 853

    +44 (0) 1722 426 853

     

    Ashley Lilley

    Ashley Lilley

    Director
    Food & Farming

    Savills Cheltenham

    +44 (0) 1242 548 012

    +44 (0) 1242 548 012

     

    Giles Hanglin

    Giles Hanglin

    Director
    Rural Research

    Savills Margaret Street

    +44 (0) 207 016 3786

    +44 (0) 207 016 3786