19 May 1995

Tenancy Act wont mean a new dawn for young

By Peter Bullen

Political correspondent

CLAIMS that the new Agricultural Tenancies Act will provide much needed opportunities for newcomers to enter farming were challenged on Monday.

At the launch of the NFUs roadshows explaining the Act, legal expert Andrew Densham dismissed the idea of a "new dawn breaking" for new entrants.

This was in direct contrast to remarks by farm minister, William Waldegrave, who, only minutes before, told the conference at the Royal Institution of Chartered Surveyors London headquarters that the Act would breathe new life into the farming industry.

The aims of the tenancy reforms were simple, he said. They were to tackle the decline in tenancies, open up opportunities to new entrants and to provide flexibility for British agriculture to remain internationally competitive.

Initial hurdle

"Above all, new entrants will have a chance of overcoming the all-important initial hurdle of gaining access to land," he said. "Many of them have been waiting far too long for such opportunities. If at least they can get tenancies, then they have a chance to show their mettle and build up a track record and a long-term business.

"I do not pretend that all the problems of new entrants will be solved overnight. But I have not heard anyone suggest a practical way in which the legislation could have done more to persuade those who own agricultural land to provide new tenancy opportunities."

But Andrew Densham, senior partner of Burges Salmon solicitors, said he doubted if they would see a rebirth of the farming ladder with chances for new entrants. It was very well the minister saying there was a free market but you couldnt make new land, he added.

There was a finite and diminishing supply of land for which there was an increasing demand as existing farmers required more and more to remain viable. Freedom of contract in that context produced alarming financial results. "We need only see what has happened to milk quota prices," he said.

There was a similar finite quantity of the commodity available, an expanding demand for it and prices paid which only those who were well established and could spread the cost over a substantial enterprise could justify.

It was highly improbable that new entrants could compete commercially. Existing big boys would always outbid them. His worry was that advisers would advise landlords to lease to the big boys.

Mr Densham also warned dairy farmers that, from Sept 1, they were in danger of losing some of their milk quota to landlords from whom they rented land under the Acts farm business tenancies provisions. As milk quota was attached to a holding, dairy farmers could find themselves "massaging" part of their quota off their own land to the newly rented landlords land without entitlement to compensation.

To avoid this, he said dairy farmers must insist on special compensation provisions when they negotiate to rent extra land.

At present sheep annual premium, suckler cow and beef premium quotas were not affected. But if the EU retrospectively attached these quotas to land it would create a minefield for disputes, he warned.

Speaking of criticisms that land would be let only to existing farmers rather than new entrants, NFU tenants committee chairman How-ard Organ said he thought farms would be let to both categories.

Banks dilemma

The main dilemma was for the banks. How were they going to treat the new entrants? Would they be happy to lend and how steady would their nerve be if things started to go wrong?

Mr Organ said it would help if grants available to new entrants in other EU countries were also available in the UK. The investment needed in farming today was enormous. If new entrants were to succeed they needed all the help they could get. He appealed to the government to reconsider its decision not to provide EU new entrant grants.

&#8226 Further NFU tenancy reform roadshows will be held at Swansea May 22; Exeter, May 23; Ciren-cester, May 24; Telford, May 25; Preston, Jun 5; Newcastle, Jun 6; Bala, Jun 12; Newmarket, Jun 13.