Land matching in England
Finding the right match
26 July 2016
Alison Rickett explains the background to a new land-matching service for England, which aims to unlock business opportunities
Those in the land sector continue to hear calls for ‘new blood’ mechanisms that can assist business progression and options for existing participants wishing to step back. How do we help create an environment conducive to prospective entrants and those already in the sector?
Those aspiring to enter find that they face an array of barriers. It is therefore essential that stakeholders help to create and promote sustainable opportunities and associated business models to ensure the continuation of a vibrant and progressive land sector.
To help address some of these issues, a new land-matching service is being launched by the Fresh Start Land Enterprise Centre (FSLEC), a community interest company (CIC), with the aim of helping innovation in land-based businesses.
Joint ventures use established legal land agreement structures, including contract farming, licences, share farming, partnerships, conventional tenancies and long-term lets. As a joint venture develops, it can often move from one type of agreement to another. The top 10 things to look at when considering a joint venture are listed below.
Top 10 factors when considering a joint venture
|Landowners look for||Entrepreneurs look for|
|Realistic business ideas||The right infrastructure|
|Under-bidder – registered provider
|Access to markets|
|Commitment||A fair deal|
|Clear communication||Space to develop|
|Practical proficiency||Opportunities for collaboration|
|Drive and confidence||Stability|
|Sound financial position||Encouragement|
|Shared values||A “can do” approach to
|Somebody they get on with||Clarity and consistency|
Matching service need
Over the years, FSLEC and other organisations have helped to bring together interested parties in an informal manner, working more on the basis of requests coming in at the right time than having a structured approach or nationally recognised point of referral. There has also been an imbalance between supply and demand, with more people seeking opportunities than there are those willing to offer them. But recent feedback from Country Land and Business Association (CLA) members has shown that there are a significant number who may be interested in new ways of working.
The past 10 years have also seen numerous discussions around the need to create some type of matching service. But 3 things were lacking:
- evidence that a service was required
- information, education and case studies highlighting how it could work
In 2012, the National Federation of Young Farmers’ Clubs (NFYFC) commissioned a feasibility report, supported by the Department for Environment, Food and Rural Affairs, finding that such a service was required. The focus then switched to how it should be structured and who would provide it. A second piece of NFYFC research 18 months later found that the development of a pilot service would be the best approach, and FSLEC offered to undertake this.
Case study: John Henderson
John Henderson (left) and David Coates (right)
John Henderson saw an opportunity to implement a share-farming scheme at his family’s estate near Skipton during the early 1980s. One of the estate’s previously tenanted dairy farms needed new life breathing into it at the same time as young farmer David Coates, who had grown up on his parents’ tenanted farm elsewhere on the estate, was looking for an opening to set up his own business.
Under John’s guidance, David quickly set about transforming the farm into a thriving business and has never looked back. Today, David share-farms with John across the whole estate.
In 1992, John also recruited a second young farmer to the estate, and by the end of that year Tony Shepherd was up and running with 150 sheep and a suckler herd. John provides, maintains and insures the property while Tony provides labour and machinery. Each runs his own business, with no sharing of the trading or bank accounts. Under the agreement, the split between the two is on a 67%:33% basis.
What will the service provide?
The service enables landowners and land agents to register any opportunities they have to offer and entrepreneurs may also register, outlining the type of opportunity they are seeking. Initial contact by any of these parties will be registration by phone or via the website, and questionnaires will then capture the necessary data for the first filter of the matching element. FSLEC will facilitate meetings between the parties and provide additional information where required.
FSLEC will make available mentors and training from established businesses and professionals, as well as links to other organisations and sources of help. It will not provide assistance on drawing up agreements, however, with all parties advised to use established professionals for this.
FSLEC chaired the England service-matching group discussions in 2013 and 2014. It was able to draw on years of expertise in running business academies for new entrants and established farm businesses and, most importantly, it remains neutral, working as a CIC for the farming and land sector. It also builds on the land partnership approach it has helped to develop, outlining the key steps for anyone considering joint ventures.
Funding and fees
The Prince’s Countryside Fund and the Frank Parkinson Agricultural Charitable Trust are funding the pilot service, for which fees will be charged at a low rate. This encourages commitment and value from the service’s users and provides a small income to FSLEC to help cover administration costs.
FSLEC launched its first Land Partnerships Handbook in 2012. The second edition, published in 2015, provides the core content for the Land Partnership workshops that outline the benefits and challenges of different land agreements and joint ventures. These workshops are being run across England and are an excellent introduction for those thinking about this route. Case studies are available and continue to be added, and the FSLEC website offers more information.
FSLEC set out to create a national advisory group to guide it through the establishment of a service. It works regularly with a wide range of industry organisations on all its projects, including the RICS, the Central Association of Agricultural Volunteers, NFYFC, CLA and the University of Exeter. It also engages with a range of individual farmers. Representatives of industry organisations serve on the advisory group.
Case study: Robert and Janet Bostock and Philip Feeney
Robert Bostock (left) and Philip Feeney (right)
Robert and Janet brought their organic, 700-acre Old Hall Farm near Malpas and their successful breeding herd and Phil brought his enthusiasm and ambition but little capital. Now, 8 years later, Robert has stepped back into a less demanding role in the business, which was one of his main aims, while Philip has bought a good percentage of the milking herd and built up his equity.
How have they done it?
Initially, both parties signed a formal contract where they each received a return on the capital they invested into the joint business. This document outlined, for instance, that Philip would buy the machinery and 25% of the original 320-strong herd. A cow-hire agreement enabled Robert to see a return on his assets while Philip milked the herd and had an agreed share of any surplus left over in the business account. Now the business has grown, the contract farming agreement has been replaced by a 50:50 equity farming arrangement.
Key to success?
“By purchasing the cows gradually, the herd size didn’t have to decrease, which enabled me to produce enough profits for all parties,” comments Phil. “We now have 700 cows and I own half of them. The other essential ingredient is good communication.”
Much of the hard work to get FSLEC up and running is nearly complete, with the full launch due as the May/June issue of Land Journal went to press. However, FSLEC still need input from potential users of the service regarding what would work best, and would welcome all suggestions: contact FSLEC.
Alison Rickett is Managing Director of FSLEC
Related competencies include Agriculture