Grazing licences have a lesser legal right than a tenancy i.e. a licence can be thought of as letting someone on to your land to do something (graze stock or take grass/crop from the land). Effectively, a grazier shares occupation with a land owner, whereas a tenancy grants someone exclusive possession of your land.
A grazing licence will typically run from May to October, although any period will be fine up to 364 days, and can vary depending on the circumstances of both parties and the land.
Grazing licences can be, and in a lot of cases are, renewed each year, particularly where a good relationship is established between both parties.
It is important that a grazing licence is documented in writing, particularly if there is an obligation on the grazier to comply with the requirements of any grant scheme and/or cross compliance rules. A plan is also key to accompany the licence to show accurately the area of ground let.
Typically, the landowner will have responsibility for boundary repairs, as well as ditches, hedges, gateways and water supply etc. Unless damage is caused by the grazier, whereby they would be responsible to repair and put right any damage caused. Care should be taken regarding the repairing obligations imposed on the grazier to prevent a licence becoming a tenancy agreement.
A grazing licence can be tailored to the land, for example, preventing certain animals being grazed such as cattle or horses, and the period which certain stock are grazed (e.g. sheep to be grazed for the whole licence period and cattle to be grazed for a reduced period) and specifying how many cuts of silage/hay are permitted within the term.
So, what are the benefits of letting land on a Grazing Licence?
• Enables land to be let on a short-term basis whilst being able to regain possession of the land quickly and easily. Furthermore, when a licence period ends the grazier must leave and remove all stock, as well as indemnifying the landowner in respect of any losses suffered.• The land is still deemed to be occupied by the landowner, and providing he has overall responsibility for the land will be considered an ‘active farmer’. The owner can therefore claim BPS payments and payments for any environmental schemes on the land. Because of this, it is important to monitor the graziers use of the land to ensure that they are not putting the land to a use which may put the owner in breach of any cross compliance rules or terms of environmental schemes.
• The ‘active farmer’ status will also be relevant for inheritance tax purposes. The land will start to qualify for agricultural property relief after two years of ownership, rather than the seven years required if a tenant is occupying the land. This is a further reason why it is vital that a grazing licence is correctly drafted and cannot be argued to be a tenancy agreement.
How to ensure you get the right grazier for your land
In order to get the best interest in your land it is important to be well prepared prior to the start of the grazing season (i.e. now!). It is essential that you are offering something better than your competitors in order to have the pick of graziers.Preparations should include;
• The boundaries should be in good order and the land in good heart at the start of the season.
• If the land is going to be used for silage/hay it is important to replenish the nutrients with fertiliser, and it must be decided who is responsible for this, licensee or licensor, and have this written into the agreement accordingly.
• Most grass lettings have water available, either natural water or mains. If there is facility to meter the mains water supply separately, especially where cattle are being grazed, then this is advisable.
• It is important to keep control of weeds, especially thistles and nettles. The preferred method of weed management and who is responsible should be written into the licence.
• Remember, that ‘good farming beats top rent’ as the right person will look after the land if they know they have the opportunity to take the land the following season.
Getting a grazing licence wrong can have a huge impact on asset value and inheritance tax planning.
If you need help or advice regarding grazing licences, please contact us here at PFK Land Agency on 01768 866611 or This email address is being protected from spambots. You need JavaScript enabled to view it.