By Robert Harris
TENANT farmers representatives have welcomed government plans to implement a full review of the 1995 Agricultural Tenancies Act.
MAFF-appointed consultants will assess the effectiveness of the legislation, fulfilling Labours pre-election promise.
The review will begin in March, and findings are expected by the end of this year.
Both the Tenant Farmers Association and the NFU believe farm business tenancies, introduced under the act, have not met expectations.
They want to see several much-needed changes adopted.
“This review will be of huge importance to a lot of our members,” says Ken Oliver, chairman of the NFUs tenants committee.
“Tenant farmers are highly exposed to financial pressures and restrictions because they do not own the land they farm.
“It is important that this review embraces the significant changes within agriculture.”
George Dunn of the Tenant Farmers Association says FBTs were established to meet several objectives.
Those included bringing new land into the tenanted sector; encouraging more new entrants; and enabling tenants to diversify or adopt environmental practices.
“They have brought new land into the sector about 200,000ha of it in the past four years.
“But, in the main, it is going to existing owner occupiers able to pay over the odds to spread fixed costs.”
This has discouraged new entrants, with only about 100 taking up tenancies since 1995. “And lots have gone out again,” he adds.
Mr Oliver believes new entrants also need longer tenancy terms bare land FBTs average just four years and fully equipped holdings only 11 years.
This short life also hampers tenants efforts in securing environmental payments and makes diversification difficult, he adds.
A more flexible tax system would help on all counts, says Mr Oliver.
Mr Dunn also wants landlords to be able to grant 1986 Agricultural Holdings Act tenancies to tenants who move farms on the same estate.
And succession on retirement should, like succession on death, be exempt from FBT legislation, he adds.
The NFU, TFA, Country Land and Business Association (CLA), and Young Farmers are to meet on 01 February to try to agree a common message to deliver to the review body.
But the CLAs Oliver Harwood believes there is little need for change.
“In our view the perceived problems have nothing to do with FBT legislation, but simply the way they are put into practice in some circumstances.”
FBTs have been a “staggering success” in increasing the amount of land in the tenanted sector, he says. And about 9% of the gain went to new entrants, according to latest figures from the Central Association of Agricultural Valuers, he adds.
“The idea that one in 10 new acres is going to new entrants is not half bad.”
Mr Harwood says it is “a nonsense” to blame short-term FBTs for stalling diversification.
“Both landlord and tenant should talk ideas through and work in partnership.”