TFA tenancy campaign: the outlook one year on

Tony Blair famously coined the phrase “much done, much still to do” as he reflected on his first term as prime minister.

The same assessment applies as the TFA approaches the end of its year-long campaign for longer-term farm business tenancies (FBTs).

For the first time since before the introduction of the Agricultural Tenancies Act 1995, which brought in FBTs, there has been real debate on the future sustainability of the agricultural let sector in England and Wales.

See also: Give tax relief only on longer farm business tenancies – TFA

The problems faced by our current generation of farmers and new entrants – including market volatility, high land prices, deteriorating soil health and competition between producing fuel and food – have provided the backdrop for the debate.

George Dunn
George Dunn is Tenant Farmers Association chief executive

In the face of these persistent issues it is those farm businesses with short-term interests in land that are most vulnerable. There is a need to ensure sustainable lengths of term are offered to allow businesses the space and time to manage risk, invest and farm sustainably.

Security to invest

It is also important that the farming industry plays its part in the wider economy, including in the drive for improvements in productivity. Within agriculture this will only follow when entrepreneurs are given the right framework for investment and growth. No right-minded farm business will invest in long-term soil health or farm infrastructure if it sees only three or five years of security.

Ten years appears the minimum time horizon needed to service the borrowing required for serious investments and all too often the market is failing to deliver the length of term required.

Some within the landlord community, including the Duchy of Cornwall and the National Trust, accept that the current situation is unsustainable. It is regrettable however that the principal representative organisation for private landowners, the Country Land & Business Association (CLA), appears blind to the need for its members, and those who advise them, to change their practices. 

In the debate about agricultural tenancies, the CLA seems to have forgotten its central belief in long-term property rights, land use and land management. Indeed, it has sought to encourage even less secure arrangements than the short-term FBTs currently available

In the face of this impasse there is need for government action, not least in the tax framework within which landlords make decisions.

Throughout its campaign the TFA has argued for restrictions on inheritance tax reliefs to landlords letting short term and a more robust approach to ensure compliance with current tax law on contract farming, share farming and grazing licences.

On these the TFA has had positive engagement with the chancellor and his officials. With the next budget set for 16 March, the TFA will be keeping up its dialogue with the Treasury to ensure the necessary changes are made.

Government support

It is also pleasing that farm minister George Eustice has stated his desire to see the encouragement of longer-term tenancies and how Defra’s forthcoming 25-year plan for agriculture needs to address this.

Truly this is a time for joined-up government to deliver what has been identified as important policy change.

The TFA has learned lessons too. Despite the fact there is evidence of abuse in the use of contract farming arrangements and other forms of agreement, they do offer important stepping stones into the industry for individuals who have little capital before they progress into secure tenancies.

The TFA will be considering how such individuals can be supported to make the right decisions within properly constituted agreements for their long-term success.

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