This is a forward purchase of goods. It is not a security.
The distinction is not pedantry. Getting it wrong turns a farm shop product into an unauthorised collective investment scheme, which is a criminal offence under section 23 of the Financial Services and Markets Act 2000.
What a collective investment scheme actually is.
Section 235 of FSMA 2000 defines it extremely broadly: any arrangement concerning property whose purpose or effect is to let participants "participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property", where participants lack day-to-day control, and where either contributions are pooled or the property is managed as a whole.
Read that again and notice how little it takes. You do not need pooling. You do not need to call it an investment. You need people who are passive, property that is managed as one, and a return that comes from the sale of it.
The three cases that decide this.
| Case | What happened | Why it matters here |
|---|---|---|
| FCA v Capital Alternatives [2014] EWHC 144 (Ch); [2015] EWCA Civ 284 | Investors bought sub-leases of rice-farm plots in Sierra Leone at around £1,250 each and received the profit from the sale of the rice grown on their own plot. Returns were plot-specific — there was no pooling at all. | The court held it was a scheme anyway, because the plots were "managed as a whole". About £16.9 million was raised from 2,021 investors. All of it was lost. |
| Asset Land Investment v FCA [2016] UKSC 17 | Investors held legal title to demarcated plots of land. | Owning your plot outright does not give you day-to-day control. Per Lord Sumption, the investors "did not have day-to-day control for the simple reason that… the company would take an active role and the investors a passive role." Substance over form. |
| FCA v Forster [2023] EWHC 1973 (Ch) | The contractual terms said returns were not pooled. | "If the economic effect of the arrangement taken as a whole is a pooling, the fact that the contractual terms specify otherwise will not prevent it being regarded as pooled." An entire-agreement clause is no defence, and neither is counsel’s opinion. |
How this product is deliberately built.
What Plotting is
- A fixed price, set and paid at the point of purchase
- Produce delivered in kind — beer, flour, pasta, potatoes, oil, jam
- A stated quantity, fixed at purchase, that does not vary with the yield
- A predominant purpose of use and enjoyment of the produce
- The farm retaining full management control and access throughout
- A shared-risk term, agreed before payment
- Marketing that talks about provenance and produce
What it will never be
- Any cash return whatsoever
- Any share of profit from the sale of a harvest
- Any share of the tonnage off a given piece of ground
- Any pooling of contributions or returns
- Any dependence on aggregate farm sales
- Any secondary market, or any language implying resale value
- Any automatic or operator-triggered conversion into a profit share
- Any exclusive possession of land, which would risk creating a tenancy
- Any marketing about yield, return or ROI
And the second legal problem nobody expects.
Renting a "plot" to a consumer risks accidentally creating a tenancy. Under Street v Mountford, exclusive possession plus rent plus a term equals a tenancy regardless of what you call it — and an agricultural tenancy under the Agricultural Tenancies Act 1995 could give a consumer security of tenure and reduce the land value by twenty to forty per cent.
Which is why your patch is a marketing device and a promise about produce, not a demised parcel. You never get exclusive possession. The farm retains all management tasks and full access, and remains the active farmer throughout — which also protects whatever agricultural property relief still applies after the April 2026 changes.
And the necessary caveat
This page explains why the product is built the way it is. It is not legal advice, it is a demonstration build, and any real version of this would require sign-off from UK financial-services, agricultural-tenancy, planning and tax counsel before a single plot was sold. The relevant FCA guidance is PERG 9.4 and PERG 11.2, and note that a scheme can also be an AIF under PERG 16 even where it is not a CIS.
The terms themselves.
Written to be read rather than survived.
