The Tenant Farmers Association (TFA) of England and Wales has said that in designing new, post-Brexit policy frameworks for agriculture and the rural environment, active farmers must be the focus of any new schemes.
The TFA defines active farmers as those who are in land occupation, taking the entrepreneurial risk from farming the land and in day-to-day management control.
TFA Chief Executive George Dunn said “We are constantly reminding politicians and civil servants in both London and Cardiff that they must ensure against the benefit of any new policies becoming capitalised into land values and rents. The last thing we need as we seek to become more competitive as a farming industry in the post Brexit era is embedding increased costs for land into farm budgets.”
“There is a particular threat around the design of new agri-environment schemes. It has already been too easy for landlords to take advantage of existing agri-environment schemes, by accepting the benefit of available payments whilst passing the management requirements on to tenant farmers through clauses in tenancy agreements,” said Mr Dunn.
“Of course landlords are entitled to receive rents commensurate with the economic benefit arising from the use of their land. However, it is entirely wrong that they should also be able to capture public funding for activities being carried out by their tenants, especially when the benefit is not being passed on to the active farmer in lower rent levels,” said Mr Dunn.
The TFA has also said that there is no escaping the fact that direct payments available through the Basic Payment Scheme (BPS) are finding their way into higher rent levels, particularly on land being let under short term Farm Business Tenancies (FBTs).
“It is too often the case, that land owners demand rent levels of new entrants and other tenants, which require that BPS payments are fully factored in to tenders. We also see a tendency for large owner occupiers to acquire additional acres, by overestimating the extent to which they will gain from economies of scale and by offering levels of rent inflated by the availability of direct payments. Those inflated rents become quoted as comparables in other rent review cases adding costs to all FBT tenants,” said Mr Dunn.
This tendency for rent inflation, is the principal reason why the TFA supports a ceiling to the level of direct payments that an individual can claim through the Brexit transitional period to a new policy framework, as proposed in the DEFRA Health and Harmony consultation.
“We must use the implementation period following our EU exit, to obtain maximum benefit for the sector as a whole. Achieving reductions in rental costs will be a significant factor in driving the profitability of farm businesses,” said Mr Dunn.