Tenant farmers back early retirement scheme
© Tim Scrivener Three-quarters of tenant farmers say they would consider retiring – depending on the value of a government package offering them the opportunity to leave the industry.
The finding is based on a survey of 360 growers and livestock producers by the Tenant Farmers Association (TFA).
It canvassed its members about Defra plans for a lump-sum payment exit scheme, which is expected to launch in England next year.
See also: Exit payments: How should farmers prepare for 2022?
Eligible farmers would be paid a lump sum in place of any further annual basic payments.
Calculations by Farmers Weekly suggest it could be worth about 2.5 times the total amount of the 2021 annual basic payment, which will be phased out by 2028.
The survey is significant because tenant farmers are often understandably reluctant to talk openly about their retirement plans in case it affects their relationship with their landlord.
Strong appetite
TFA farm policy adviser Lynette Steel said: “Three-quarters of those responding said they were seriously interested in the proposed scheme – demonstrating a strong appetite for it.”
Details of the scheme are yet to be announced.
But if it is designed and implemented effectively, the TFA says it could allow older tenant farmers to retire with dignity, while allowing a younger generation of farmers to take their place.
Ms Steel explained: “We could see a marked increase in land mobility.
“This would not only allow new entrants into the industry, but would provide more opportunities for those to progress within the industry on to bigger and better units.”
The survey found that half of those interested in the scheme rented their land on traditional, Agricultural Holdings Act tenancies with security of tenure.
Geographically, farmers in south-west England showed the highest level of interest in the lump-sum scheme.
Value of package
More than 75% of respondents said the value of the retirement package would be the biggest factor they would need to consider before taking part in the scheme.
Other key factors were readiness to retire and whether succession rights would be affected.
One in 10 Welsh farmers said they would be interested in a lump-sum scheme.
But agricultural policy is devolved and the Welsh government has so far not mooted running a similar initiative for farmers in Wales.
Defra has promised that an exit scheme to help farmers who wish to retire will be introduced in 2022.
It said rules for the lump-sum payments will be set following a consultation with farmers expected early this year.
Ms Steel said: “On a practical level, negotiating exits from farm tenancies is often a lengthy and complicated process.
“Therefore, given the short time frame Defra has outlined for the delivery of the scheme, we really need to see full scheme details by this autumn at the latest.”
Farmers’ views on the proposed scheme
“We need to know the details as soon as possible – it is a huge decision and would need a considerable amount of business planning.”
“I am over 55 with health issues and would seriously look at this scheme to retire depending on the criteria.”
“A payment would allow me to retire instead of carrying on after retirement age – allowing the next generation to take over while they are young.”
“The payment represents the best opportunity to exit my tenancy. I would be able to retire without it, but could be limited in retirement options”.
Source: Tenant Farmers Association