Farming News - TFA Responds to Defra Plans for Farm Tenancy Reform

TFA Responds to Defra Plans for Farm Tenancy Reform

02 Jul 2019
Frontdesk / Finance

The consultation is the first major look at agricultural tenancies for over a quarter of a century. The last significant review ushered in the Agricultural Tenancies Act 1995 which gave birth to Farm Business Tenancies (FBTs). Now approaching half of the land farmed in England under an agricultural tenancy is through an FBT.

Two sheep crossing the road

TFA Chief Executive, George Dunn, said, “In welcoming this review, we have also expressed disappointment that so little of the consultation is devoted to improving the quality of lettings through FBTs. Almost 25 years of experience with FBT’s has concluded that they are predominantly short-term, restrictive in nature and overpriced in terms of rent”.

“Whilst we appreciate that this was a consultation by DEFRA and not the Treasury, we should have seen more of a joined-up position across Government so that this consultation could have grasped the nettle of taxation which is the real driver through which we will see longer, more sustainable FBTs. If the estates of landlords who let for less than 10 years were denied access to lucrative Agricultural Property Relief from Inheritance Tax, we would see improvements in average lengths of term which are currently pitiful. Four years is the average length of term for an FBT and 85% of FBTs are let for five years or less,” said Mr Dunn.

With major change in the wider policy environment for agriculture due to take place, this review could not have come at a more crucial time.

“There are some who are arguing that with the extent of changes elsewhere that it is too early to be looking at agricultural tenancies. However, the TFA argues that that is an unsustainable position. If we do not address the areas where agricultural tenancies rub up against wider policy objectives, we could see agricultural tenants become disenfranchised from new initiatives, whether that is, about improving productivity or providing public goods in return for public payments.”

“The real danger is that we will not see fast enough change. It is disappointing that the Government has not committed itself to a legislative timetable for its proposals. Particularly, those which allow tenants to question the reasonableness of a landlord’s refusal to allow activities promoting the efficient use of the holding for agricultural and agri-environment purposes. That is why we are pressing for amendments to the Agriculture Bill expected back in the House of Commons for report stage. We are urging the Government to at least bring forward the changes needed to address this issue, by tabling its own amendments to the Bill,” he concluded.