The Tenant Farmers Association (TFA) is urging tenant farmers to press the case for farm rent reductions as we enter one of the key rent review periods this autumn. Tenants with rent-review notices served last year should use the opportunity to put forward a properly evidenced case for a lower rent, while those without a live review should consider whether to serve notice for a rent review in the coming year.

Farming is being hit by a near-perfect storm of high costs, low yields, weak returns and devastating livestock disease.  Many arable businesses have endured successive disappointing harvests, and exceptionally dry conditions have reduced grass and fodder availability, increased pressure on water supplies and left livestock producers concerned about winter feed. Bluetongue is bringing further losses and expense, while volatile energy, fertiliser and other input costs continue to squeeze margins.

 TFA Chief Executive, George Dunn said: "If tenant farmers cannot make the case for a rent reduction in circumstances such as these, I would ask when they ever will. Across the industry, earning capacity has been damaged by successive poor seasons, weak yields, drought, disease and a stubbornly high cost base. Rent is one of the largest fixed costs carried by many tenant businesses. Landlords and their agents cannot be blind to the financial realities now confronting agriculture and should respond positively to any approach they receive to relieve pressure on rents. Landlords and their agents are keen to press the case for rent increases in better times, they should also be willing to offer rent reductions in the tough times."

 A rent review notice served by either party can be used by the other in any review. Landlords' notices served last year can be picked up by tenants to argue for a rent reduction.

 "A landlord's notice is not a notice for an increase, it's a notice for a review. Where evidence can be used to argue for a reduction, as in this year, tenants can use landlords' notices to make the case.  Equally, in situations where a live notice is not available, tenants should consider now whether they need to serve a notice for the year ahead. All the indications are that this year will not be a unique year and is important to plan to have a review available next year if one cannot be achieved this year," said Mr Dunn.

 The TFA is also calling for those bidding on land under new tenancies to take a prudent approach.

 "Despite the current difficulties we continue to see individuals, typically large owner occupiers with low rent and finance charges on their existing units and with an inflated sense of their ability to spread fixed costs, bidding over the odds in rent for access to agricultural land.  That is not just a private arrangement between themselves and the landowner, it builds an evidence base of comparables that can be used against other tenant farmers particularly within rent reviews under Farm Business Tenancies.  Individuals taking land at rent levels far beyond its realistic earning capacity do the whole sector a disservice," said Mr Dunn.

 Where agreement cannot be reached, advice should be taken about whether the dispute should be referred to an arbitrator or whatever dispute resolution arrangement has been agreed between the parties within the tenancy agreement.

 "When rent disputes are referred to arbitrators and experts the TFA would urge them to be particularly cognizant of the major pressures under which farming is labouring and resist any ratcheting up of rents on a theoretical basis or by looking at a thin market in comparable rents," said Mr Dunn.

 "Seeking a sensible rent reduction is not an act of hostility towards a landlord. It is prudent business management. Good landlord-tenant relationships depend upon rents that the holding can sustain and that allow both parties to plan for the future.  Landlords should engage constructively, and those appointed to determine disputes must look hard at the exceptional pressures agriculture is facing," said Mr Dunn.