With the impending changes to the agriculture sector’s subsidies regime, diversification has fast become the key watchword for farm businesses that are looking to maintain and enhance their current turnover levels in the new fiscal environment.
For some, this may be quite a simple process, such as widening the range of produce that is sold through local retailers, but for others, it could involve a substantial change to the fabric of the farm and its environs.
Converting existing buildings or constructing new ones to provide holiday accommodation, retail premises or food preparation facilities, or putting up new buildings for such purposes, can make a marked difference to the financial sustainability of a farm business, but the amount of planning and work required to do this properly should not be underestimated.
The rules of the planning system apply just as strictly to farm locations as they do to anywhere else, and given the rural setting in which you’re working, they may even be more prescriptive than in urban sites.
Perhaps the key consideration when looking at this sort of project is to make sure that you undertake it on a formal, contractual basis, rather than, as farm businesses often operate, on a handshake.
This ensures that, if anything goes wrong, there are formal procedures and measurements in place that can be used to judge the situation, rather than conflicting and entrenched opinions that almost inevitably lead to a legal dispute.
There are various standard contracts available, but any document should be adapted to relate to the details of the specific project that you’re undertaking.
Assembling a professional team of advisors is also an essential undertaking – not just a suitably-qualified lawyer, but also the likes of an architect, design consultant and project manager who have experience of this sort of project, understand the contractual and technical issues that may arise and have the wherewithal to keep things moving forward on schedule and on budget.
Within any tender that you issue for the project, make sure every aspect of the planned development is covered, both above and below ground – longstanding drainage systems on farmland might, for example, not be up to the additional demands that new buildings on the site might put on them.
All this preparation means that, if any issues do arise during the construction period, you have the appropriate people, contractual clauses and processes in place to manage them as efficiently as possible.
Keeping the lines of communication open between the relevant parties during a dispute gives you the best possible chance of resolving the issues in question before they snowball into something that ends up in the courts, potentially costing everyone a lot of time, money and aggravation.
The role of your project manager becomes even more important in such situations and the person you choose needs to have experience of bringing them to a satisfactory conclusion.
Achieving long-term financial sustainability should be the goal for any farm business with an eye on the future and adding to its physical structures can be an excellent way of securing it.
But as with any construction project, going ahead without the proper project and contractual planning leaves you open to a lot of significant and potentially costly risks.
For further information on all aspects of managing construction project contracts, please contact Jan Rzedzian on 0191 232 8345.