CAAV survey shows rise in tenant acres
CAAV survey shows rise in tenant acres
By Catherine Paice
AN extra 38,000 acres were brought into the tenanted sector during the year to Oct 2000, latest figures reveal.
This means over 250,000 acres have been added to the sector since farm business tenancies began in 1995, according to the Central Association of Agricultural Valuers tenanted farms survey.
Before tenancy reform, CAAV surveys showed a loss of 50-70,000 acres each year.
Last year, 518 previously unlet units on 57,000 acres – amounting to one in five units – were let on FBTs, compared with a pre-reform figure of 25 on 3730 acres in 1994.
Over 50 holdings were bought and then let during the year. Of tenancies brought to an end, about 83% were re-let on FBTs, leaving a tiny fraction to be taken in hand or put into joint ventures, including contract farming. Most units not relet were sold.
The survey indicates that most contract farming agreements apply to larger, and mainly arable, units in lowland England.
"The attractions of contract farming do not appear to extend to previously let land," says Jeremy Moody, secretary of the CAAV. "The key to this may lie in the different impact of and attitudes towards taxation. Existing landlords are not looking to participate in the farming of these units."
Less encouraging for those whose businesses are based on tenanted land is the average length of term, which is just over four years.
Tenancies for more than five years are let for an average 14 years; house, buildings and land (less than 10% of the total) for just under an average of 11 years.
"These are initial terms," said Mr Moody. "I think we will see a significant number running on."
Half of new tenancies are for less than five years, although 70% were let for less than two years in 1994.
"I take this point," says George Dunn of the Tenant Farmers Association, "but if you are a livestock farmer and you are offered a five-year term you are not going to take it. Banks are also looking for a longer period in which to take the risk on the debt incurred.
"The only benefit that we can see from FBTs is in bringing more land on to the market but we remain concerned that those who can take advantage of it have low rent and finance charges, and they tend to be the better-heeled owner occupiers.
"We do need the forthcoming review of the legislation and we will wait to see the outcome of that."
New entrants took 9% of all new FBTs, generally for longer than the average term, and 8% of new contract farm agreements, according to CAAV figures. *
TENANTEDSECTOR
• Year on year gains continue.
• Extra 38,000 acres last year.
• 518 previously unlet units now FBTs.
• Average length of term – four years.