When I made my annual report to members last year, Russia had just embarked upon its "special military operation" in Ukraine which by anybody else's measure amounts to a full-blown and unjustified war. The devastating scenes of death and destruction that have littered our media since then have been heart breaking to watch. Although there has rarely been a time in living memory when there has been an absence of conflict in the world, the fact that it has come so close to home has been a huge wake-up call to us all.

Whilst clearly the impact of the war falls most tragically on the people of Ukraine, the war has certainly had an impact more widely. The escalation of energy costs has hit consumers and businesses alike. The Government's unprecedented intervention has eased this to a certain extent, but it was never going to be able to mitigate the huge uplift in costs to any significant extent. Inevitably we saw eye watering increases in the price of fertiliser, assuaged to a certain extent by the higher prices some farmers were able to obtain for their produce. However, this was not universally the case and we have certainly seen the worst of behaviour within retail and foodservice supply chains over these past months. Many producers facing escalating costs for energy, fertiliser, labour and other inputs faced into a marketplace reluctant to reflect those increasing costs in the price processors and retailers were willing to pay. Hiding behind the guise of protecting consumers during a cost of living crisis, retailers and processors sought to hold the line against offering producers higher prices to cover their costs.

Many sectors took the economically rational decision to scale back production, seen most notably in eggs and fresh fruit and vegetables which have more rapid cycles and which were most potently impacted by the impact of rising energy costs. It was particularly galling to hear retailers claim that some of the problem with empty shelves was related to avian flu and severe weather on the continent. Not that they didn't have any impact at all, but the true reasons for disruptions fell simply to the fact that retailers were not willing to reward producers sufficiently to cover the costs of production.

Having made the point for years that we needed to be more focused on ensuring our long-term food security, the TFA is at least pleased that this issue has certainly come into sharper focus in recent days. How sad, though, that it has taken the emergence of a war on the edge of Europe to achieve that. Of course, it is important to have a certain degree of reliance upon trade, both to obtain products that we cannot produce at home or where seasonality considerations are a constraint on having a consistent supply throughout the year, we have, for too long, undermined our domestic capacity to produce food. The TFA has long called for food security to be within the basket of public goods alongside biodiversity, carbon, landscape, clean air and clean water. Sadly, in England, we did not manage to get this fully recognised within the Agriculture Act 2020 but it is good to see that in the Agriculture (Wales) Bill, food security looms large in the very first of the Bill's Sustainable Land Management Objectives right at the beginning of the legislation currently passing through the Senedd.

It is also vital that we play our role in securing wider global food security. The tragic sight of unharvested crops in Ukraine and the inability to get grain shipped out of the country has impacted many countries, particularly in North Africa, who have routinely relied upon that supply of grain into their marketplaces. As a relatively rich country by comparison, we have been able to find our way through this, but it has been very tough for many of those importing countries. As much as we need to be conscious of our global environmental footprint, we need also to ensure that we are cognizant of the role that we play in feeding the world.

Interesting, then, that the Government should be reviewing the role of the Groceries Code Adjudicator (GCA). Whilst the review is merely part of the regular cycle built into the legislation underpinning the office of the GCA, it could not have come at a more important time. Alarm bells have sounded with the suggestion made by the Government in announcing the review that consideration should be given to disbanding the independent role of the GCA and that it should be subsumed within the Competition and Markets Authority. Part of the reason for establishing the GCA in the first place was the failure of the Competition and Markets Authority to adequately police the retail groceries sector in the first place. The TFA has made it clear that it would be a retrograde step to disband the independence of the GCA making our views clear both in our formal response to the review and in meetings with Ministers.

In fact, rather than weakening the role of the GCA it needs to be strengthened and expanded. The Agriculture Act 2020 contains important supply chain measures aimed at regulating the relationship between farmers and processors. However, very little of that legislation has seen practical implementation. We need to see the end of what has been a bit of a turf war between the Department for Environment Food and Rural Affairs (DEFRA) and the Department for Business and Trade (DBT) so that there is a unified approach to the regulation of supply chains from farm to fork. The TFA will continue to argue for this integrated approach.

A significant amount of time over the past year has been spent locked in face-to-face and online meetings with DEFRA on the delivery of the Agricultural Transition Plan arising as a consequence of the U.K.'s decision to leave the European Union in 2016. The premise of the plan is relatively straightforward in that there will be a gradual withdrawal of payments through the Basic Payment Scheme (BPS) and the development of a new suite of Environmental Land Management schemes to directly reward farmers for delivering what has been termed "public goods". In addition, there will be a raft of other interventions including schemes to promote productivity, new entrants and the health and welfare of farmed animals. What has been clear is that the painful bit of the plan has been very easy for DEFRA to implement and in the coming year BPS recipients will have seen at least half their annual payments disappear. However, this has not been matched with the necessary speed to implement the new schemes. TFA members will be forgiven in thinking that our efforts and lobbying with government have been less than fruitful on this front, however, it has been a hard slog. There have been many occasions where we have come near to throwing our toys completely out of the pram and walking away from the many discussions and fora within which we have been involved on behalf of our members. I am clear that to have walked away at any time would have been to the long-term detriment of our members. Despite the frustrations and disappointments, it has been important to continue to engage with DEFRA and we are now beginning to see some fruit for our labour. There is, however, a long way to go particularly in ensuring that there is a sufficiently significant offering for our upland and grassland farming sectors which, in what has been announced to date, have left them feeling rather ignored.

A really important role played by the TFA through this process has been to highlight the specific and unique issues faced by individuals farming land that they do not own. Moving from a scheme which simply required individuals to have land at their disposal (BPS) to one which is about the management control of that land both in time and space has led to huge concerns both within the tenanted sector and in other non-land owning sectors such as commons. The TFA has played a crucial role in getting DEFRA to understand these issues and to come forward with solutions. This has led to the development of a relatively "tenant farmer friendly" rollout of the first set of Sustainable Farming Incentive (SFI) standards which has set down a marker for the architecture that will be required in the other elements of the new Environmental Land Management approach. Finding solutions in respect of common land is proving much more challenging but TFA continues to be involved in detailed discussions through the DEFRA common land working group in an attempt to find ways forward.

Of course, the whole process of policy development has not been helped by the political turmoil that has beset us over the past year. Three Prime Ministers, three DEFRA Secretaries of State and four Chancellors of the Exchequer since September is not a recipe for resilient governance. As each new administration has come blinking into the light we have had to educate, influence and lobby afresh. TFA has worked hard to ensure that whoever has been given a seat at the Cabinet table has received clear and informed briefing on the issues impacting the tenanted sector of agriculture.

Of course, the situation in Wales has been very different. It has been consistently led by a Labour administration which has been rather more cautious about moving quickly into a new policy space. However, it is seeking to move in a largely similar direction to England by removing the BPS and replacing it with a scheme more specifically targeting public goods – the Sustainable Farming Scheme (SFS). We have seen the outline of the SFS and, as a result, we have set about our core business of ensuring that the schemes will be accessible to the tenanted sector of agriculture. Huge concerns have been expressed about the requirement of a universal action demanding that all SFS applicants have or aim to have 10% of land under trees and an additional 10% of land under some form of seminatural habitat. These are both factors which would be hugely problematical for the tenanted sector, and we are working hard with Welsh Government to overcome those issues. It will also be important to ensure that the optional and collaborative actions are fully available to tenant farmers as these are likely to be the more lucrative offerings within the new scheme. Payment rates are yet to
be published.

To assist with this, the Welsh Government has, at long last, established a Tenancy Working Group which has been going through the outline of the SFS line by line to highlight particular issues for tenant farmers and to offer a raft of solutions. Unfortunately, the work of this working group is happening at the same time that the Welsh Government is promoting its Agriculture (Wales) Bill in the Senedd. It would have been better if the working group had been established in advance of the presentation of the Bill (a call that had been made consistently by TFA Cymru). It makes it much more difficult when the two things are happening side-by-side.

The Welsh Minister, Lesley Griffiths, has been very clear in her pronouncements that if the SFS does not work for tenants than it does not work at all, but the value of those words will be measured by what is ultimately delivered. Whilst she has been willing to consider bringing forward Government amendments to the Bill which addressed some of the concerns of tenants, none have thus far been forthcoming. However, we are grateful to both Plaid Cymru and the Conservatives who have tabled amendments drafted by the TFA for the second stage of the Bill's consideration. We await news of whether these will be either supported or picked up by Welsh Government as the Bill proceeds.

Again, similarly to England, the Welsh Government has established a Commons working group which is seeking to inform the final structure of the SFS so that it can deliver benefits to and include those who graze using common grazing rights. So far, the group has identified many more problems than solutions. The key to unlocking the problems that have been highlighted is a robust governance structure using external facilitators rather than relying upon individual Commons Associations to self-regulate what they are doing and having to find ways of engaging with the commons owners who may be either reluctant or seek to use their leverage in inappropriate ways.

Another important piece of continuing work on behalf of TFA members in Wales is our engagement with Welsh Government on the implementation of its pollution control regulations. The Regulations have set strict requirements on necessary fixed equipment, in particular slurry storage capacity and on loading limits of nitrates. Tenant farmers will struggle to comply with these new requirements where either the landlords are responsible for providing the fixed equipment required or where the consent of the landlords is needed before new or improved fixed equipment is provided. We are already encountering huge problems with members who are struggling to get their landlords to respond positively to requests for either investment or permission for tenants' investment. Tenants who are limited in their ability to export nutrients by their tenancy agreements will also find themselves in difficult circumstances. To date, Welsh Government has sought to address these fundamental issues through a non-binding, advisory Question and Answer briefing which barely touches the sides of the issue. We will continue to seek a much more realistic approach from Welsh Government to ensure that tenant farmers are not significantly disadvantaged in the implementation of the new rules. Where tenant farmers have done all that they can to comply and where they are not either polluting or at significant risk of polluting there is no reason why they should be landed with penalties or legal sanctions. Equally, where landlords are balking at taking the necessary action to upgrade fixed equipment in circumstances where there is significant risk of pollution, we will expect Welsh Government to take enforcement action against the landlord who has the liability for the fixed equipment rather than the tenant.

Just prior to Christmas last year, the Government published a set of legally binding environmental targets stemming from the Environment Act 2021. Included within the list of targets are those relating to improvements in biodiversity, reductions in water pollution, delivering on carbon net-zero ambitions and reducing air pollution. Setting targets is one thing, achieving those targets in a practical, realistic and systematic way is immensely more difficult. The worry is that farmers and farming will become the scapegoats for addressing the negative environmental externalities caused by other parts of the economy and society.

Let's start with housebuilding. The Government has an ambitious target to achieve 300,000 new houses each year as articulated in the Conservative Party manifesto for the 2019 General Election. However, at the same time, it has now set a priority to reduce nutrient pollution (nitrates and phosphates) from household sewers and from the way in which households use water. Taking these two public policy points together, one would have assumed that developers would be under an obligation to ensure that their new homes are built in such a way to not contribute to the nutrient problem. Sadly, not.

Instead, the Government identifies that some nutrient pollution is "unavoidable" and that this pollution will be tackled through a Nutrient Mitigation Scheme allowing developers to enter into long-term agreements with landowners to divert the use of land to "soak up" or mitigate the nutrient pollution they are creating. Therefore, rather than taking steps to mitigate pollution at source, developers will be given licence to allow pollution to continue if they compensate for that somewhere else. Already, we are seeing this scheme leading to land coming out of traditional agricultural use with some agricultural tenants losing access to land important to their businesses and already delivering food sustainably produced to high levels of environmental management.

Moving on to achieving our carbon net zero ambitions, it is increasingly the case that best practice in this space is all about inseting our carbon reductions by the way in which we develop and manage our supply chains. However, the Government has decided that the best approach to achieving this goal is to increase our woodland cover in England from its current level of 10.1% to 16.5% – necessitating finding a further 2 million acres of trees over the next 25 years. Inevitably, those trees will be targeted on grassland currently used for agricultural purposes and already delivering huge positives for both carbon storage and sequestration.

The most recent statistics from UK Government suggest that the whole of UK agriculture is responsible for around 11% of our carbon emissions. Given that it covers 70% of our land mass, the remaining 30% of land must be responsible for the other 89% of our emissions. That makes agricultural land use some 18 times more carbon efficient, acre for acre, than all other land uses put together. There are huge question marks around the extent to which trees are any better or are indeed worse than grassland in delivering carbon benefits so putting all our net zero eggs into one basket seems a very risky option.

Meeting our renewable energy targets by moving good land out of agriculture into solar parks rather than using the vast area of rooves within our built estate and allowing what is termed "rewilding" on an unconstrained and unregulated basis to improve biodiversity rather than looking to best practice in terms of land sharing are further cases in point.

Meeting environmental targets is a complex endeavour requiring a systematic approach rather than the apparent easy wins that will create unintended, negative halo effects but which the Government currently seems to prefer. At its extreme, this approach will damage our food security causing us to have to rely increasingly on parts of the globe with lower environmental production standards.

The increasing narrative around biodiversity net gain, nutrient neutrality, carbon sequestration, renewable energy, woodland planting and rewilding is also causing huge concerns about the resilience of the let sector. For the first time, in a long time, we are beginning to see the amount of land within the let sector of agriculture begin to fall as landowners take back land previously let under Agricultural Holdings Act Tenancies and holding it so that they are in pole position for whatever new markets come along rather than letting it out again under Farm Business Tenancies (FBTs). In addition, FBTs continue to be stubbornly short term with average length of time barely more than three years and with nearly 90% of all new tenancies be let for five years or less.

It was therefore hugely positive that previous Secretary of State, George Eustice, asked Baroness Kate Rock to form a working group to consider what needed to be done to secure the resilience of the let sector of agriculture. As we have always said, the let sector is vitally important to our farming industry as it allows individuals who own land but who lack the necessary entrepreneurial skills or desire to link up with those without land but who have the entrepreneurial drive to work that land efficiently. It also brings liquidity to the most fixed factor of production in agriculture, land, as well as providing opportunities for both new entrants and progressive farmers to expand and improve.

Our own Chief Executive, George Dunn was appointed to the group established by Baroness Kate Rock and it delivered its 100+ page report to government with 74 separate recommendations to Government in October of last year just nine months after it had been commissioned.

The report of the Rock Review made the promotion of landlord tenant collaboration its number one recommendation. The report speaks to Government, landlords, tenants and land agents who all have a role to play in delivering that collaboration. The reason why it is necessary is to ensure that we build resilience within the landlord tenant system which already delivers much for new entrants, progressive farmers, cultural and social objectives, environmental and landscape outcomes, and of course food and food security.

The report concludes that whilst there are pockets of good practice existing within the landlord tenant system, the existence of good collaboration is more often the exception rather than the rule. To address this, the report has a raft of recommendations which, if implemented, should help to nudge the parties to an agreement towards a better place. Given that most of the cards are held in the landlord's hand, quite a lot of the recommendations are rightly focused on how to affect change within the landlord community.

Key recommendations around the taxation framework within which landlords make decisions reflect what the TFA has said for a long time. Why should landlords have access to generous inheritance tax relief if they are only prepared to let land for a very short term? The TFA has called for those reliefs to apply only in situations where landlords are prepared to let for terms of 10 years or more, and whilst the Rock Review has proposed a minimum term of 8 years, that would be a significant improvement against an previously referred to averages.

Restricting landlords from taking land back from tenants to enter public schemes including woodland planting but instead encouraging joint applications for such schemes between landlords and tenants is another key recommendation. If by their agreements tenant farmers find that they cannot access schemes the hoped-for uptake from Government will not materialise. The report provides some easy wins for DEFRA to improve that vital tenant access.

The Rock Review also signals out the role of land agents reporting that in gathering evidence it was often the case that they were the biggest problem to achieving good levels of collaboration. Agents using standard agreements based on very short terms and restrictive covenants is the norm. The report advocates for DEFRA to look at how a licensing scheme might be introduced to improve agent performance and behaviour through an appropriate mechanism to bring scrutiny and accountability.

Bringing all of this together under the umbrella of a Tenant Farming Commissioner is another major recommendation of the report. This is an idea which is certainly gaining support across the industry. The Commissioner could introduce and develop codes of practice, hold DEFRA and Government to account to ensure that their policies and practices are tenant friendly and look at how dispute resolution could be reformed and reviewed for the benefit of the sector.

The Rock Review has grasped some very important nettles which, to be frank, are not entirely unfamiliar in the day-to-day work of the TFA. However, to have these issues highlighted in the context of an independent review brings a greater degree of credibility and hopefully a greater degree of willingness and ability for things to change too.

As a first sign of that change, after many years of lobbying by the TFA, the Treasury has taken up the recommendation within the Rock Review to look at the way in which Agricultural Property Relief from inheritance tax operates within the let sector of agriculture. In the spring budget statement, the Treasury has launched a call for evidence on how such a restriction could work in practice, focusing on the eight year bar set within the Rock Review recommendation.

The TFA is incredibly grateful to Baroness Rock, not only for the speed and diligence with which she has produced her insightful and influential report but the extent to which she has been prepared to be an advocate for that report and has held it high in both the media and political circles since it was published. There is always a danger with reports of this nature that they end up been forgotten, particularly when, as with this one, they were commissioned by a previous Secretary of State. Baroness Rock has worked brilliantly to ensure that this has not occurred. We are awaiting the full response from Government but hugely encouraged that one of the major recommendations on tax has already been picked up.

When the founding fathers established the TFA back in 1981, it was against a background of year-on-year reductions in the size of the tenanted sector of agriculture across England and Wales. At the start of the 20th century, 90% of farmland was operated by tenants whereas by the time of the formation of the TFA, this had fallen to 30%. As a result, the organisations representing farming had become more concerned about issues for owner occupiers than for tenants. In addition, for the most part, tenant farmers lacked access to good professional advice, information and support. The establishment of the TFA certainly changed things for the better.

Slowly, but surely, since the introduction of the Agricultural Tenancies Act 1995, which ushered in FBTs, we have seen a decline in the amount of land let under secure Agricultural Holdings Act 1986 (AHA) tenancies to be replaced with FBTs. Recently, Government statistics reported that, for the first time, there is now more land rented under FBTs than under AHA agreements. That is a hugely poignant moment to reflect upon. We have reached the tipping point between tenancies which offer security and regulated rents and those which are insecure with rents based on open market pressure. At the same time, we are seeing landlords resuming possession of land to take advantage of alternative opportunities and where their ability to do so is assisted when agreements are let on such short terms.

Clearly, there is more work for the TFA to do in moving the dial towards greater levels of security of tenure and better protection for tenants facing dislocation by their landlords seeking alternative land uses. Organisationally, only the TFA has the dedication, focus and determination for this work and TFA members can be assured, that is exactly what it will be doing.

I am, as always, hugely grateful to our determined staff team who, day in and day out dedicate themselves to supporting TFA members and fighting for the future of the tenanted sector. The team continues to be led by our long-running, Chief Executive, George Dunn with whom we were delighted to celebrate a quarter of a century of service to the TFA in 2022. In addition, it was fantastic to see his long service recognised by the Farmers Weekly which bestowed upon him its much coveted Lifetime Achievement Award. Truly well deserved.

I am also grateful to all of the affiliates with whom we work, including our Recommended rural surveyors, solicitors and accountants, our sponsors and other partners. Their support and assistance adds greatly to the work that we are able to deliver for our members and the wider sector.

TFA members are at the heart of everything we do and I am grateful to every one of our members for their willingness to put their trust in us to represent their interests and support them in their farming endeavours. As I enter the final year of my chairmanship, I hope to be able to engage with as many of our members as possible and to encourage those who are yet to commit to joining to see the benefit of working together for this vital sector of agriculture.