A developer’s approach can open up opportunities for your farm, but there’s more to consider than the headline income. Lorna McKay explores the questions to ask before taking discussions forward.

If a developer has approached you about using your farmland, you’re not alone. Farmers across Scotland are regularly receiving proposals for a range of projects.

From renewable energy schemes to utilities and housing, these projects can offer opportunities to diversify your farm’s income.

Before taking discussions forward, it’s worth thinking about what a proposal could mean for you and your farm business. Lorna McKay sets out the key questions to consider.

Who can make the decisions?

The first question to ask yourself is: Are you ultimately the decision maker?

That could come down to who owns your farm, as that may be different to who is doing the day-to-day farming, and whether there is a security on it, which would mean the bank would need to give consent.

If the farm is let or used by third parties, is the development possible while your tenant or other occupier is in place? Is there a right to resume for development purposes? Checking the terms of any lease or contract farming agreement is essential.

If you’re a tenant, what does your lease allow, and do you need to refer the approacher to your landlord? Keep in mind that a tenant’s right to diversify generally covers projects undertaken by the tenant directly, rather than those undertaken by a third-party developer.

Who should receive the income?

If you decide to enter into discussions, how do you ensure the income which may be received will go to who you intend, especially if you are factoring in succession or retirement planning?

Look beyond the headline terms

When agreeing heads of terms, the conditions which protect your farm business can be just as important as the headline commercial terms. Think about your title deeds and the wider practical impact that a development may have. Would grazing still be possible around the development site, and how would access be taken? Would you control the access?

The figures may look appealing, or you may feel under pressure to agree. Either way, it’s important to take time to understand the detail before making a decision.

A carefully considered deal which delivers an income, without adversely impacting on your farming operations, could help protect your business for years to come.