29 May 1998

Outgoing: RICSview

CHANGES should be made to agricultural restructuring schemes if the industry is to gain maximum benefit, according to a Royal Institution of Chartered Surveyors report.

The paper, responding to a ministry consultation document, welcomes the governments early retirement scheme – in principle. But the institution believes the £28,100 on offer to farmers is, although useful, unlikely to result in large-scale retirement and land restructuring.

Additional tax breaks through retirement relief could help, though other factors, such as a desire to retain the house, garden and paddock, and the strength of the land market, also play an important part in the decision to quit, says the institutions Stephen King.

Due to the relatively high number of active farmers over pensionable age, the scheme should not be restricted to younger ones, he adds.

Schemes should be developed to allow farmers to semi-retire, to ease the salary burden on a business and allow successful transfer to future generations.

Amalgamation to produce larger farms may produce more viable units which are less dependent on subsidy. But the move has serious implications for rural employment and the environment.

"Consideration should be given to ensure small holdings (below 24ha) are not all amalgamated," says Dr King. "This could be done by promoting part time farms."

which could also provide a useful stepping stone for new entrants. It may be more appropriate to target the scheme at farms which are too large to be run part time, but too small to be viable on a full time basis."

Actual farm area will vary between regions, so assessing income from the holding may be the best way of defining eligibility, he adds.