A plan to shorten tenancy agreements on Powys County Council farms could deter new entrants, tenants fear.
Tenants on medium-size holdings of between 4 and 36ha (10 and 90 acres) will in future be offered eight-year tenancies, with the possibility of renewal after that period.
But what is really concerning tenants is the introduction of a break clause at year three. Smallholder Susan Jones suggested that this effectively meant the tenancy would only be secure for three years.
“This will make it extremely difficult for anyone to plan and we are also concerned that banks will be reluctant to offer finance,” she said.
The existing tenants are meeting on Thursday (23 February) to discuss the final draft of the county council’s farms policy.
Ms Jones, who is also county executive officer for the Montgomery office of the Farmers Union of Wales, believed the new policy would hit young entrants hard. “The council is seeking top market rents, with new tenants expected to improve and develop their business and be in a position to move onto bigger holdings within a very short time,” she said.
Tenancy specialist Philip Meade, of Davis Meade Property Consultants, was advising the smallholders. He urged them to check all paperwork carefully before new agreements were signed.
Mr Meade had been negotiating on behalf of the tenants and succeeded in getting the council to agree to increase the tenancy term from the original proposal of six years. However, the three-year break clause is still in place.
“We are concerned these new tenancies will prevent new entrants coming into the industry. They don’t offer enough security,” he said.
Around one-third of the estate’s 160 farms are on Farm Business Tenancies (FBT) and farms are being amalgamated to make units more viable, enabling surplus farmhouses to be sold off.
Larger farms of more than 36ha (90 acres) are being offered with an initial 12-year FBT and an eight-year renewal, each including a three-year break clause.
Mr Meade said it would be difficult for tenants to take advantage of environmental schemes such as Glastir, because these had a minimum five-year agreement.