Seeing the wood for the trees

A neighbour has for some time owned the three fields behind his house which he let to a nearby farmer who grazed his sheep on it. For this he received a nominal rent of £10 a year. He recently planted the land with trees for which he has received a grant under the farm woodland premium scheme. This is payable annually for the first ten years of the woodland.
HMRC say that 'despite the fact that the woodlands themselves are likely to be commercial woodlands and thus outside the scope of income tax these payments are taxable as part of the farming profits' (Business Income Manual at paragraph BIM55165.)
But my neighbour does not have a farming business: he qualified for the farm woodland premium scheme because letting the land for grazing counts as an agricultural activity for those purposes. My old edition of Gammie and de Souza's...