The increasing weight on the environment in the Scottish Government’s new agricultural support measures is certainly focussing farmers’ thoughts about what they need to do in order to benefit. And forestry will be among the first things that many consider.
Tree planting can, of course, be a challenging topic - with some facing a dilemma around whether to consider creating a new use for what might traditionally have been livestock grazing ground in the drive towards net zero.
But for those who decide the circumstances are right for them, the financial returns may be quicker than has previously been the case, with Scotland’s Agriculture and Rural Communities Bill setting out an ambition to “transform how we support farming and food production in Scotland to become a global leader in sustainable and regenerative agriculture”.
One of its five key pillars is the “facilitation of on-farm nature restoration, climate mitigation and adaptation”.
Given that the Bill is intended to transition from the current CAP system - as was run through the EU - to new conditions similar to the likes of the Basic Payment Scheme which will reward work to lower emissions and increase efficiency, more opportunities around forestry will be a consideration for landowners. And they could well be for their tenants too - particularly if there is to be a quicker financial incentive through Government support than there might otherwise be if that incentive were not there.
What underpins every thought in this respect is the fact that agroforestry can increase biodiversity and there are ways to integrate with existing farm practices - striking what we suspect will be a sweet spot in new support arrangements.
However, before jumping into any agreements linked to planting and harvesting, there are some important legal considerations to be thought through.
Firstly, you need to ensure that new woodlands comply with The Forestry (Environmental Impact Assessment) (Scotland) Regulations 2017.
The next consideration is what scale of forestry could be right for the land you control. Not every forestry project has to encompass hundreds or thousands of acres. The creation of shelter belts and small stands - as well as planting on larger blocks of otherwise unproductive land. Projects like this can strike the ideal balance between maximising income and agricultural productivity.
For the likes of estate owners, one of the considerations for those who operate as landlords with secure agricultural tenancies could be whether they take back land for planting under a resumption clause in the lease agreement - albeit the technicalities of that are under review as part of the Scottish Government’s Land Reform Bill. Of course, this will not be possible for everyone. Checks would need to be made as to whether a lease allowed for this.
It is also critical not to lose sight of the fact that tenants cannot legally be left with an unviable unit, so caution is needed when landlords consider how much land they may wish to resume. Failing to do so, could lead you open to a legal challenge.
An alternative, albeit potentially rare, path for landlords - particularly where resumption is not an option - is to negotiate with with tenants to allow them to plant trees on land covered by the lease. Or they could allow tenants to do it themselves.
The long- term nature of woodland investments means that tree planting doesn’t always work with tenanted land but revamped Scottish Government incentives may well shift the dynamic on that slightly.
Tenants often dismiss the possibility of planting because they think the door is closed to them owing to them not owning the ground. However, those who wish to use their tenanted land for a non-agricultural purpose such as tree planting, can give the landlord written notification and go through the process of obtaining consent for the diversification.
Like any negotiation, open dialogue about the benefits to the tenant’s enterprise - and therefore the longer-term financial interests of the landowner - could ensure that everyone wins.
And, like any diversification project, tailored professional advice can make a significant difference when considering the implication of long-term commercial contracts with the likes of forestry firms - along with the need to ensure the fine detail surrounding issues such as access are in place from the outset.
Given the right circumstances, however, forestry could be an option to more farmers than many realise according to Eilidh Robertson, Senior Associate in our Rural - Land & Business team.
Published 28 November 2024.
