Farmers who let areas of grazing or arable land on “gentlemen’s agreements” with no official paperwork could put their single payment in jeopardy, a leading consultant has warned.

“Where there is only a small area of grassland, or the parties are well known to each other, there is always a temptation to let a few animals on with just a handshake,” Oliver Lee of the Andersons Centre explained.

“Given that the cross-compliance rules governing cattle and sheep identification and tracing are the most commonly breached, this potentially poses a big risk to claimants,” he said.

New rules for 2009 mean that the minimum penalty for a cross-compliance breach is 3% of a single payment claim, with fewer warning letters being issued by the Rural Payments Agency where compliance is doubtful or borderline.

Mr Lee urged anyone letting land or farming someone else’s land to ensure a formal written agreement was in place, clearly defining each party’s responsibilities and who would be liable for any cross-compliance penalties should they occur. “It is possible for the grazier to retain the liability for animal identification, so protecting the land provider; but it is all about putting the right systems in place.”

Tighter Nitrate Vulnerable Zone rules could add a further complication and both parties had to be clear where they stood, particularly when it came to recording the nitrogen loading calculations and limits, he added.

Arable farmers were also advised to make sure written agreements were in place where arable land was being claimed by one party, but the day-to-day farming was being carried out by another. Failure to do so could mean that the claimant on the land would be liable for any cross-compliance breach and have no rightful comeback from the person farming the land.