Tenants unite to press for long term tenancies

Tenant farmers across the UK are coming together to campaign for longer-term tenancies. The Scottish Tenant Farmers Association is joining forces with its sister organisations the TFA in England and TFA Cymru Wales to highlight the benefits of longer term tenancies and measures needed to encourage landlords to let land on more sustainable terms.

The TFA is celebrating the 20th anniversary of FBTs by launching a campaign under the banner “FBT10+: Too short for too long”, aimed at more than doubling the average length of term offered by landlords on Farm Business Tenancies. FBTs were introduced in England and Wales in 1995 to promote economic efficiency in agricultural land-use, but have singularly failed in meeting that objective with average lengths of term on new tenancies only four years. TFA has observed that volatility in commodity prices and farm profitability looks set to continue and farm businesses need long-term security to ride these economic storms and to service the borrowing necessary to support business development.

Commenting on the initiative STFA Chairman Christopher Nicholson said: “Short-termism in letting land is as rife in England as it is here in Scotland and will undoubtedly lead to degradation of both the land and the infrastructure of farming. Farming is a long-term business requiring constant investment in land, buildings and stock, particularly in the livestock sector. Short-term lets, seasonal grazings and contract farming arrangements act as a disincentive to investment for both landlord and tenant and the results of this neglect are already evident in many parts of the country.

“STFA supports the TFA in its endeavours to take steps to encourage landlords, when making decisions on letting land, to consider the long-term future of their land as well as the wider benefits to agricultural production. As recommended in the AHLRG report, there are fiscal and taxation levers which could be used in a carrot and stick approach to encourage landowners to let land on more sustainable terms. These matters are currently reserved to Westminster and STFA is joining other tenants across the UK to lobby the Chancellor and MPs to introduce the necessary changes to the taxation regime, such as:

Restrict the 100% tax relief from inheritance tax to landlords letting land on leases for more tan 10 years.

Examining the potential to allow rent to be treated as trading income for tax purposes on land let for more than 10 years

Capping the availability of reliefs for land farmed in hand on larger agricultural estates.

In addition STFA would ask the Scottish Government to exempt farm tenants from the new Land and Buildings Transaction Tax.

“The taxation regime acts as a disincentive to letting land on reasonable term lengths, but the new CAP regime is equally damaging the tenanted sector by encouraging short-termism as landowners seek to retain as much flexibility as possible in letting land to allow them to cash in on support payments whether or not they are genuinely active farmers. UK and national governments should heed of tenant farmers concerns and take steps to reverse this trend by clamping down on those land owners using share farming, contract farming, share partnerships and grazing licences as thin veneers of trading activity to gain tax advantage and claim BPS entitlements when in practice they take no risk, have no entrepreneurial input and lack any management control.

“If agriculture is to progress and provide security and stability for future generations of farmers, landlords must husband and safeguard the future of their land, ensure it is properly farmed and not treat it as a cash cow”

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