What is the difference between a Grazing Licence and a Farm Business Tenancy?

The term “Grazing Licence” and “Farm Business Tenancy” are quite common within the farming community but do you know the difference between them? Sarah Dunlop, Senior Associate in Blanchards Bailey’s Agriculture and Estates team, answers that question for you.

What is the difference between a Grazing Licence and a Farm Business Tenancy?

A Grazing Licence grants a grazier short term access to another’s land in order to graze their livestock, usually between April to October/November. A Grazing Licence is commonly used to help with tax planning as in some circumstances it is advantageous for the landowner to retain both control and occupation of the land. This can also assist subsidy applications.

A Farm Business Tenancy is a lease of agricultural land for agricultural purposes commonly used when the landowner does not need to retain occupation of the land and where land is to be let for a prolonged period of time. This form of tenancy grants the tenant sole occupation of the land together with statutory rights over it and also places obligations on the tenant including maintenance and repair.

Why do I need to be certain which I am granting?

Choosing the correct agreement is vital to avoid inadvertently giving the grazier/tenant statutory legal rights that you did not intend them to have over your land, particularly security of tenure. If security of tenure is inadvertently given to the tenant, they will be entitled to a new tenancy of the land at the end of the term making it difficult for you to regain possession if you wish to do so.

What if the proposed occupier wants to graze horses?

Horses are not considered livestock within the definition of agricultural use unless they are part of a larger commercial farming operation. There is often confusion that can occur where horses are purely grazing and if the wrong agreement is used in these circumstances, you may give the occupier security of tenure.

If you are considering letting your land, it is worth speaking to your land agent or legal advisor prior to doing so to ensure that you are protected in the desired manner. If I or any member of the Agriculture & Estates team can assist, please do get in touch on 01258 488202.