Private contracts to ease SFP

AN ALTERNATIVE method to allow transfer of historic single farm payment entitlements when land is sold should help the market over the next few months, according to agent Strutt & Parker.

Until now, to ensure historic entitlements can be transferred to the buyer, many sales have required a leaseback to the seller, who usually appoints the buyer as a contractor.

But this method is relatively complicated, said Christopher Monk, head of the firm‘s farming department.

“In an increasing number of cases solicitors are now beginning to feel more confident about the Private Contracts Clause which is set out in Article 17 of the implementing regulations,” he said.

This simpler transfer of entitlements to the buyer has three fundamental requirements.

“Both the buyer and seller must be farmers within the terms of the regulations on the date of application; a solicitor needs to incorporate special appropriate clauses in the contract for sale; and both parties must include a copy of the sale contract with their application form under the single payment scheme and, presumably, tick appropriate boxes on the forms.

“It looks straightforward but the potential problems of the seller continuing to be a farmer had been a worry for a lot of our clients, especially where they wished to sell the farm and leave the industry.”

But initial clarification from DEFRA has indicated that the seller will qualify as being a “farmer”, if, for example, he looks after a few hectares of grass until May 16, 2005, after which he could leave the industry.

Farmers wishing to use the PCC must sell their land before May 16, he added.