9165 - BM Outlook 2022 R6 - Flipbook - Page 5
Schemes and legislation to
improve biodiversity of the
countryside could lead to a
monoculture occupying it,
with tenants inadvertently
squeezed out by the new
focus on cutting carbon
rather than growing food
and rearing livestock.
Land, once the resource that was
measured on its ability to produce
food, is now just as likely to be
measured in terms of CO2e, the
unit used to measure carbon
footprints, and by its global
warming potential (GWP).
As the push for ‘net zero’ gathers pace,
concepts such as rewilding, regenerative
agriculture and water catchment
management are gaining traction and placing
the environmental agenda centre stage. But
as targets become entrenched in government
policy, global strategy and the public
conscience, and as pressure on agriculture
continues to grow, Batcheller Monkhouse’s
David Blake and Helen Clouting look at the
impact it could have on tenant farmers.
Historically, agricultural land has been
owned and occupied by a mix of farmers
and investors, landlords and tenants, sole
traders, contract farming arrangements
and family businesses. As the agricultural
transition continues to stride ahead,
however, the direction of the industry
seems set to change.
The fear is that the schemes and
legislation being introduced to improve
the biodiversity of the countryside could
lead to a monoculture occupying it, with
tenants inadvertently squeezed out by the
new focus on cutting carbon rather than
growing food and rearing livestock.
Care must be taken to balance the
opportunities and threats that future
policy presents those who have occupied,
and been the custodians of, the land for
generations to ensure their voices are heard.
2 | Outlook
The Tenant Farmers’ Association is
providing robust representation, while
DEFRA’s response in the form of a new
tenancy working group will go some way
towards addressing this current shortfall
in recognition. It remains imperative,
however, that the feedback from such
working groups and pilot schemes is
acted upon and used constructively to
influence future grants and schemes.
David Blake Helen Clouting
Partner,
Haywards Heath
Graduate Surveyor,
Haywards Heath
Future of the industry
Land is a finite resource and agriculture
is an ageing industry, with the average
age of a farmer currently standing at 59.
Incentives such as the new lump sum
exit payment scheme, and the young
farmer and new entrant payments
acknowledge this. The danger, though,
is that if land is taken back in hand to
pursue environmental objectives it will
result in a shortage of the new entrants the
Government claims it is looking to attract.
Food production
The changes the industry is facing raise
a question of priorities. Food production
remains a necessity and, with the global
population now at 7.9 billion, one would
assume the need to produce high quality
food in a sustainable manner would
inspire policies that helped this country’s
farmers do just that.
Landlord and tenant
The landlord and tenant relationship has
long underpinned UK agriculture and seen
the industry recognised for delivering
some of the world’s highest quality
produce and welfare standards.
Currently 30% of UK farms are occupied
by farm tenants, with 94,029 tenancies
farming 2.49 million hectares. The danger
is that policy payments encouraging
rewilding, tree planting and the like will
incentivise landowners to take the land
back in hand, which will have a major
impact on the future of the industry –
and on the nation’s food security.
It has ensured that agricultural land has
been managed in a productive manner
while providing the tenant farmer with
a business and livelihood in which they
are willing to invest. At the same time,
this tried and tested relationship retains
the holding in a tax efficient way for the
landowner and safeguards the rural
landscape for future generations.
Batcheller Monkhouse works closely
with landowners to help them spot new
opportunities, and for some this will
clearly be a sensible move. What the
industry needs, though, is a balance;
one that supports the tenants we
represent as well as providing new
income streams for landowners.
Policies are needed that help farmers produce high quality food in a sustainable manner
One question that will need to be
considered in future is the land’s potential
for environmental improvement and the
income it could generate, particularly when
agreeing rents, both at rent review level and
when compiling farm tender applications.
Will environmental features be considered
an asset of the holding that should be
accounted for when assessing rent?
It could, of course, be suggested that
water catchment management or carbon
sequestration, for example, only holds a
value as a result of a tenant ‘unlocking’
this potential. These are factors which
will need looking at with increasing
scrutiny when contemplating future rent.
Similarly, the treatment of a tenant’s
commitment to the net zero agenda by,
for example, increasing soil organic matter
to improve carbon sequestration, requires
further clarification. Whether this will
be deemed a tenant improvement, and
therefore create an entitlement to end of
tenancy compensation, or whether it will
be considered as merely complying with
the rules of good husbandry, will inevitably
determine the level of time, money and
energy a tenant is willing to invest.
Agricultural Holdings Act 1986
Succession
The Agriculture Act 2020 saw the criteria
a successor must satisfy to apply
successfully for an Agricultural Holdings
Act 1986 (AHA) tenancy updated. The
applicant must now demonstrate ‘capacity
to farm the holding commercially to high
standards of efficient production and care
for the environment’. The shift in such
key legislation, increasing the onus on the
environment over production, represents
the direction of the industry as a whole.
Agriculture | 3