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Isabel Davies
 
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Joined on
Sun, May 22 2005
- London
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Tenant Farmers Association - full agm speech from Greg Bliss
Thought this might make interesting reading for any tenants out there: Ladies and Gentlemen, I cannot believe that it is a full year since I took over the role of National Chairman of the Tenant Farmers Association. It has been an incredibly busy, fulfilling and challenging year. At last year’s AGM I admitted to a certain amount of nervousness in taking over the role but as it turned out there was little time for nerves as I found myself having to get stuck in to the detail very quickly. I have kept to the fore the aim of the Association as set down by its founding fathers in 1981 which is “to promote and protect the interests of the tenanted farming sector generally and in particular to represent and advise tenant farmers on all tenancy and ancillary matters”. I am very pleased to say that as I have sailed the TFA ship through its 27th year, the Association has been true to this aim. We have made sure that the tenant’s voice has been heard at the highest levels of Government and within other institutions, including major landlords, whilst maintaining a close link with our increasing membership through provisions of advice, information and support. It is my goal to build on our many achievements so far to ensure that we enhance the service provided to our members and the tenanted sector as a whole. Whilst it will be for the Treasurer to report on Association’s finances, I am extremely pleased at our strong financial performance throughout 2008 despite the difficult times which will mean that we do not need to increase the subscription rates to members for the second year in a row. This comes as a result of our strong membership base which, in 2008, saw record levels of renewals, a strong performance on the recruitment of new members and the lowest number of defaulting members in a long run of years. We will work hard to ensure that we maintain this performance through 2009 and beyond. In the agricultural economy more generally, 2008 was certainly a year of changing fortunes. Volatility is the word now most often used when referring to agricultural output and input markets. There were some major improvements in prices for a range of agricultural outputs early in 2008. However, just as we were beginning to get used to those higher prices it was not long before they began to tumble. On input prices, whilst there have been some reductions recently, it did seem that for a large part of 2008 the only way was up. In the context of rent reviews the TFA had been arguing even before the price reductions experienced towards the latter end of 2008 that output price increases were being outstripped by input price increases. This has been borne out by figures recently released by Eurostat which showed average output prices in the UK rising by 18% between 2007 and 2008 but average input prices increasing by 21% over the same period. Of course, we should not be entirely surprised by the volatility phenomenon that we are experiencing since it was widely predicted to take place following the 2003 reforms of the Common Agricultural Policy implemented in 2005. One of the Common Agricultural Policy’s aims and benefits was the stabilisation of markets which, when we moved to decoupling, was deliberately undermined. The slavish adherence by some, particularly within our own Government, to the ideology of the free market does, I’m afraid, produce negative consequences. I see part of the TFA’s role as to ensure a greater degree of pragmatism in policy development which answers the needs at the time according to the factors on display rather than forcing a predetermined ideology to fit the current circumstances. Agricultural rent reviews through 2008 have been heavily influenced by the volatility in both output and input prices. Understandably landlords, geed up by the improvement in output prices at the end of 2007 and beginning of 2008, took the chance to serve rent review notices, where available, on their tenants in the hope of achieving the first rent increases since the mid 1990s. It is fair to say that there were some strong settlements in the early part of 2008 with a number of tenants wanting to resolve their rent reviews prior to harvest. However, from the autumn onwards, things certainly began to change. Landlords appeared less confident of achieving rent increases on the grounds of budgets alone and began to rely upon their traditional hunting grounds of the value of farmhouses and cottages and the comparable evidence set earlier in the year. We have been critical about the manner in which some landlords have approached their rent reviews. We have had many reports from tenants who have found themselves in the position of being notified that an arbitrator has been appointed to consider their rent review when they have not even had the landlord’s initial view as to what he believes the level of rent should be for the next three years. In some cases tenants are waiting six weeks or more after the appointment of an arbitrator to receive the landlord’s initial offer. In other cases, the landlord has also served another rent review notice. By the end of 2008 we believe that there were something like one thousand rent review arbitrations outstanding with an equal number between those where arbitrators had been appointed by the RICS and those where arbitrators had been appointed by agreement between the parties. At this stage I can report that rent review settlements are beginning to trickle through but there continues to be a significant backlog of rent review cases to be heard before we add to the burden the Candlemas and Lady Day reviews of 2009. I referred earlier to the attempts of landlords and their agents to secure higher values for residential units on farms within rent reviews. We are aware that the Institutional Landowners Group of the CLA is looking for a case which they can take to the High Court to seek a precedent which allows them to extract a higher rental value for farmhouses and other residential units on traditional Agricultural Holdings Act tenancies. We will of course do all we can to resist such action as we believe the case being made by the landlords concerned to be both legally and morally incorrect. For this year’s reviews, the legal determination in the case of Mason v Boscawen has had an impact on rent reviews scheduled for dates after 1st December 2008 where landlords have opted to charge VAT on their rents. To put the position simply, where a landlord has opted to charge VAT neither the landlord nor a tenant can insist upon a rent review as a result of the change in the rate of VAT announced by the Chancellor which took effect as from 1st December 2008. Of course parties can continue to negotiate and settle rents by agreement but where landlords are taking an unreasonable line then tenants at least have the scope to resist as arbitration will not be an option. We are, however, working through the Tenancy Reform Industry Group to obtain a change in the legislation to protect both the landlords and tenants’ positions on rent reviews in the future. Together with our ongoing engagement with the Government we are in continual dialogue with many of the country’s leading landlords including the Crown Estate, the National Trust, the Duchy of Cornwall and County Council Estates. On an annual basis the on-going dialogue is supplemented by individual formal meetings. These meetings give us an opportunity of addressing specific issues relating to each individual landlord and general issues of policy in connection with the landlord/tenant sector. In terms of general issues, last year’s meetings focused on compliance of Nitrate Vulnerable Zones, rent reviews and the structure of the tenanted sector. It is on this last issue that I came away from 2008 with some serious concerns. What became very clear was that whilst in the past we could rely upon these major landlords to offer a range of new tenancy opportunities, now, except in a small number of individual cases, these opportunities have dried up. This has happened for many reasons including the need to carry out farm amalgamations, the use of land for development opportunities and the desire of landlords to maximise the residential value of the properties they own. At a time when Local Authority landlords are changing their letting policies to provide only one or two short-term Farm Business Tenancies before requiring their tenants to find opportunities in the private sector, I believe we have a serious problem. At the same time, the benefits of the landlord/tenant system to tenants, landowners and the agricultural sector more generally have not changed. The demand for farms has not changed. The issues appear to come from the supply side and our challenge therefore is to find appropriate ways to address those issues in cooperation with the landlord community. To do this I believe that we will need to enhance our role as an advocate for the landlord/tenant system and work hard to ensure that we have the right legislative, fiscal and structural environments within which landlords feel confident to let and tenants feel comfortable in taking land for farming. As I said, Nitrate Vulnerable Zones were also a topic for conversation with the major landlords. It is clear that we have a considerable mountain to climb in terms of the investment necessary in the fixed equipment required to meet the new statutory standards within the NVZ Action Plan for existing and new NVZ areas. Whilst many tenants will have access to the provisions of Section 11 of the Agricultural Holdings Act 1986 which will require landlords to provide all or a significant proportion of the fixed equipment necessary there are some big problems for Farm Business Tenancy holdings where in the main, the liability will rest with the tenant. Although many will argue that we are fighting a losing battle, we are continuing our stance that the Government should be grant-aiding the construction of slurry storage capacity on farms within NVZ areas. It was surprising to us that with the exception of the National Trust and some Local Authorities, landlords had yet to assess their liability for fixed equipment and to consider the role that they have to play within Farm Business Tenancies to ensure that those holdings remain viable into the long-term. So this year we will be working hard to highlight the issues in the hope that we can promote sensible, pragmatic and sustainable solutions. An important part of the farming ladder is the first rung. Traditionally this has been provided by the County Council Smallholding sector. However, over the past ten to fifteen years the TFA has been fighting a constant battle with a variety of Local Authorities against plans for selling off their County Farms estates. A number of County Council estates have sold all but a few acres of the land they once had including Berkshire, Oxfordshire and Cumbria but there are still some fifty Local Authorities letting approximately 100,000 hectares to around 3,000 tenant farmers. The Association understands the major financial pressures upon Local Authorities but does not believe that selling off farms is the answer. Local Authorities need to realise that once you sell the family silver it is gone for ever. The TFA believes that it is essential for Local Authorities to prepare sound asset management plans which look to achieving significant development value from their estates through careful, planned, strategic disposals of relatively small parcels of land. Local Authorities should take as their example the case of Gloucestershire County Council which, over the past 30 years has been able to raise something like £100 million of value from its County Farms Estate through those types of disposal whilst maintaining the area of their County Farms Estate largely the same over that period. We were therefore pleased that Sir Don Curry produced a report towards the end of 2008 recommending that the Local Authorities take this line in the management of the County Farms estate. Sir Don has been a great advocate of this issue and we are now following it up with individual conversations with Local Authorities up and down the country. The TFA is also pleased to be engaged with the National Federation of Young Farmers Clubs through its Farm Business Development Competition which seeks to encourage young people to learn more about how to obtain an opportunity to farm through a tenancy agreement. This year’s competition was supplemented by a training day sponsored by Savills who also provide a member of the judging panel which is chaired by the Association’s Chief Executive, George Dunn. The TFA will be supporting the competition again in 2009 and it is hoped that a further training day can also been arranged. Turning to wider issues in our industry it is clear that animal diseases are an ever-present threat. We at least saw the final restrictions associated with the 2007 Foot and Mouth disease outbreak lifted early last year and since then we have the report of the lessons learned inquiry together with the Government’s response. There is no doubt that the 2007 outbreak was handled in a much better way than the 2001 outbreak but that still does not excuse the Government from ever letting it happen in the first place. In accepting all the recommendations of the lessons learned enquiry we are also keen to ensure that Defra takes up the challenge of providing sufficient investment to ensure the Pirbright site becomes a real international centre of excellence on animal disease issues. We have experienced first hand the dangers associated with trying to provide a first-class service in third-class facilities and this must not be allowed to continue. The coordinated and concerted effort of the industry in vaccinating all susceptible animals was successful at keeping bluetongue at bay in 2008. It was however disappointing that a number of imported animals tested positive for the disease and I believe as an industry we need to think very carefully about ensuring we do not do anything to increase our exposure to the risk of disease particularly with BTV1 now close by on the continent and BTV6 not far away. In the meantime, I would encourage all producers with susceptible livestock not to take for granted what happened in 2008. We are still at significant risk from BTV8 and we should still be vaccinating all our livestock. Bovine TB continues to be a painful open wound for our industry. There was no disguising the disappointment and anger which followed Hilary Benn’s announcement in July of last year when he said he would not allow licences to cull badgers for disease control purposes. I personally reflected the anger being expressed by TFA members to the Secretary of State when I saw him after his announcement. I made it clear that any sense of partnership and trust between the Government and the Industry on this and wider disease control issues had disappeared. Despite this, we have congratulated the bravery of the Welsh Government which has taken a completely different tack to that of Defra. We applaud the work of the Welsh Chief Vet, Dr Christianne Glossop and hope and pray that at least for Wales we are very soon able to grab the bull by the horns and tackle this soul-destroying disease once and for all. It is however encouraging from the English perspective that Defra was willing to establish a TB Eradication Group which brings together veterinary, industry and government representatives and is looking at all aspects of disease control including the wildlife issue. There is much work yet to be done and it is too early to say whether or not the group will be able to produce an effective eradication strategy. However, I am pleased to report that the industry’s representatives on the group are working hard to ensure that there is a successful outcome. We have told the Government that unless and until it is willing to rebuild trust and partnership through the implementation of a satisfactory eradication plan for TB we are not interested in engaging with them on their agenda for cost and responsibility sharing in the arena of animal health and welfare. We are expecting a consultation document from Defra on this subject at any time. The TFA’s Executive Committee has considered this issue in depth on two occasions and on both those occasions have unanimously agreed that the Association, whilst not cooperating with the Government on its plans, should resist any attempt to levy further costs onto an industry which already bears a significant burden of costs in relation to animal health and disease control matters. We have, however, continued our engagement with Defra and the Rural Payments Agency on Single Payment Scheme issues. The TFA’s National Adviser, Rebecca Marshall, has done sterling work not only in her liaison with the authorities but in the advice that she has been giving to members. It is true to say that the system is in better shape but there is still a long way to go before it can be declared fit for purpose. On top of that we have been fighting plans initiated by Hilary Benn to replace set-aside, which was abolished as part of the 2008 CAP Health Check, with a cross-compliance condition requiring arable producers to effectively set-aside between 5 and 10% of their cultivated land each year. The industry has been warning the Government that if it insists on imposing such a cross-compliance constraint there will be a massive exit from environmental stewardship since the costs of what they are proposing would be too large to bear. However, the TFA understands the desire to maintain the wildlife habitats that have been created by set-aside. Our argument is that the best way to achieve that goal is to incorporate it as a voluntary element into the Environmental Stewardship Schemes already in place. We have been working with the NFU and CLA on this issue and I am pleased to report that there is a greater acceptance within Government that the voluntary approach is the right one to use. The Uplands have also been a recent focus of attention with the Government planning to replace the Hill Farm Allowance with the new uplands strand to the Entry Level Stewardship Scheme. Not only are there concerns about the general eligibility criteria but we have specific concerns about the ability for tenant farmers to access the scheme particularly where their landlords are already within ELS, which will be a base requirement for the new uplands strand, or where tenants have less than 5-years to run on an existing Farm Business Tenancy since the scheme requires at least a 5-year commitment. I have addressed these concerns directly with the Secretary of State and I am pleased to say that a decision was made to postpone the introduction of the uplands scheme for a further year while these matters are looked at and resolved. The last payment of HFA will therefore come in March 2010 and the new scheme is planned for the autumn of 2010. The Tenancy Reform Industry Group has been charged with looking at the eligibility issues for the tenanted sector and we will keep members posted on progress. We are also clear that the UELS will not deal with all the current issues in the uplands including, de stocking, encroachment of bracken and the relationship between farming and shooting. We have been disappointed at the lack of progress on the appointment of a food industry regulator. This is something which has been a firm plank in the TFA’s lobbying for many years. It is clear that the retailers are beginning to wriggle on the issue which is a plain indication that the Government should be pressing ahead with fervour to put the regulator in place. I have not been convinced that the arguments being promulgated by the British Retail Consortium to support the view that all is fine and rosy in the garden are correct. Retailers need to understand their responsibilities in the context of the whole food chain. Whatever the causes of the paralysis in the wider economy both here and in other developed nations in the world, it has served as a salient reminder of our economic fragility and how quickly things can conspire to work against us. There are as many predications as predictors about how long this current economic crisis will last and at some point I am sure that we will reach a new equilibrium which, at the same time, I hope will bring a culture of greater caution and economic sustainability. It is clear we allowed ourselves to become too exposed to factors beyond our control. We will be working hard to ensure that, as far as possible, tenant farmers are able to steer their businesses through the current economic malaise for however long it lasts. I believe that there are strong lessons here for the current thinking on food security issues. The standard response from the Government when questioned about food security issues in the recent past has been that as a rich nation, we would be able to import our way out of any problems. I am pleased to say that we are beginning to see this ethos questioned. We welcomed the inquiry to be carried out by the Environment Food and Rural Affairs Select Committee of the House of Commons which is considering how we secure our food supplies to 2050. Even our Secretary of State, Hilary Benn, is beginning to reconsider food security policy in a more holistic way. The TFA’s belief is that we should be doing as much as we can domestically to fulfil our existing and future food needs and this will require a revolution in Government thinking which has seen agriculture as part of the problem and not part of the solution. Food security is as much a public good as landscape, biodiversity and access. I very much hope that we are seeing the green shoots of a better policy framework for the food security arena. I know that tenant farmers stand ready and able, given the right circumstances and encouragement, to play their full part in assuring long-term food security. As I draw my comments to an end, I must record a few important thank yous. Can I first of all thank my National Vice-Chairman, Stephen Wyrill, all the members of the National Executive Committee and all members of the Association’s Regional Committees throughout the country. Good governance is important in every organisation and I am determined to ensure that we maintain good governance within the TFA. I would also like to thank all those individuals and organisations with whom we work to deliver benefits to our members. These include our Recommended Professionals, Towergate Lloyd and Whyte Insurance, DAS, BHF Finance and all those who sponsor our members meetings and show stands. I pay tribute to our hardworking Head Office staff who provide a dedicated and loyal service to our members. Head Office is an extremely busy place and each member of the team contributes to our organisational success. Finally, can I thank all members of the Association for their on-going support and I look forward to serving your interests again as National Chairman in the coming year.
Content Editor for Farmers Weekly
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