30 August 1996

Tenants angry at rent rises

TENANT farmers have hit out at proposed substantial rent increases as part of the Michaelmas rent reviews, claiming the impact of BSE is set to dent profits.

The Tenant Farmers Association has written to all its members warning that landlords agents are pressing for increases of between 25% and 40% at a time when the economic tide was turning in the opposite direction.

Reg Haydon, TFA chairman, warned tenants that farmers who signed rent increases would be locked in to the rises for the next three years.

He advised members to seek professional advice before negotiations got under way.

There is particular concern that the impact of BSE on the livestock sector will continue to cause economic deterioration among the beef trade.

"Official slaughter schemes are way behind schedule, and despite the removal of 400,000 over-30-month cattle to date, the market price continues to fall, with the MAFF top-up payments following the trade down," commented Mr Haydon

MAFF is currently reviewing its 10p/kg liveweight payment for steers and heifers, and the figure could fall to just 5p/kg.

Mr Haydon added the dairy sector was becoming seriously disrupted by the log-jam in the cull cow slaughtering scheme, which was putting pressure on milk quota, while problems in cohort tracing could delay the accelerated slaughter scheme into 1997.

And he argued that projected cuts in arable area aid payments next year could also hit profits.

coupled with rising costs of fertilisers, sprays and machinery, could even hit cereal profits after years of recent bonanza prices.

Jeremy Moody, Central Association of Agricultural Valuers adviser, said the effect of BSE on land prices and rents had been at the forefront of discussions at its annual meeting in June.

Mr Moody said valuers would be discussing Michaelmas rents at a meeting at the beginning of September.