Short tenancies are ‘damaging farming’

Greater certainty and longer tenancies would encourage more people to choose a career in agriculture, believes farm minister George Eustice.

A longer-term outlook and better arrangements were needed so youngsters could build up their own business, he told an NFU tenant farmers conference on Thursday (7 November).

Mr Eustice said he would be examining over the coming months what could be done to encourage more longer term tenancies to become available.

“One big barrier to new entrants setting up is that farming is notoriously capital intensive,” he said in a keynote speech to delegates at the Harrogate Pavilions.

“Unless you have inherited a farm or taken on a farm from family it is actually quite difficult to get into. To borrow money, the returns on capital have never been that great.”

Mr Eustice – himself a farmer’s son from Cornwall – said he had always felt more could be done to make it easier for people from outside the industry to carve out a career in agriculture.

This could include profit-sharing schemes, share-options or contract-farming arrangements for new entrants who had studied agriculture and wanted to earn a stake in a business.

“I think we can do more on that and I would love to know why they have not been taken up as widely as they have been in other industries,” said Mr Eustice.

“If you look at other industries, it is quite normal for people to be rewarded with share options or bonuses and build a stake in a business over time from scratch.”

Mr Eustice added: “If we want to encourage aspiration in this industry, we have got to look to those sorts of arrangements.”

There was perhaps a “cultural issue” within farming – a tension between fathers and their sons coming into the family business, suggested Mr Eustice.

This tension was likely to be exacerbated between an older, retiring farmer and an incoming youngster or new entrant who was not part of the family.

“I can entirely imagine that it is something people would have reservations about. But I do think it is an interesting area and one I would like us to consider how we can take it forward.”

Many farm tenancies were too short, Mr Eustice continued. The average farm business tenancy was about four years, he said.

High rents and high demand meant it was easy for a retiring farmer simply to rent out land on a short farm business tenancy rather than looking at longer term agreements.

Many tenant farmers would benefit from longer term deals.

Environmental stewardship schemes, for example, often required a farmer to have control of the land for at least five years, said Mr Eustice.

“It does exclude farmers who are on short term tenancies from accessing some of those schemes. So I do think we need to look at ways of providing greater certainty.”

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