Nov 24 2020

CODE OF PRACTICE INTRODUCED WHILE RENT REVIEW REFORMS STALL

News Release

Scottish Tenant Farmers Association

24^th November 2020

Code of Practice introduced while rent review reforms stall

The Scottish Government has decided not to proceed with implementing changes to the rent test as proposed in the 2016 Land Reform Act and is instead taking a fresh look at how to modernise the rent review system to provide the fairest and best solution for tenant farmers.  In the meantime, rents will continue to be reviewed under the existing system.  As an interim measure the Tenant Farming Commissioner, Bob McIntosh, is introducing a comprehensive Code of Practice on Conducting Rent Reviews to ensure that rents are reviewed transparently and correctly and proper account is taken of comparable evidence.

A revitalised rent review system was one of the major reforms recommended by the Agricultural Holdings Review Group by former Cabinet Secretary Richard Lochhead and incorporated in the Land Reform Act.  The intention had been to replace the market driven formula for determining rents with one based on the productive capacity of the farm.  Since then, the difficulties associated with designing a brand new rent test have become obvious and stakeholders have struggled to find agreement on how the proposed legislation should be applied in practice.

Commenting on the situation, STFA Chairman said; “We are very disappointed that, for a variety of reasons, the Scottish Government has decided not to proceed with implementing changes to the rent test. We are now faced with an extended discussion with other stakeholders and the government on the best way forward and it is likely that, even with a fair wind, it will be at least another year or two before we could have another rent regime in place.

“We remain adamant that continuing with the status quo cannot be an option and steps must be taken to create a rent test which does not place such a strong emphasis on an increasingly scarce open market for comparable evidence.  We welcome Cabinet Secretary, Fergus Ewing’s commitment to continuing with the quest to re-design a new rent test and Bob McIntosh’s new code of practice which not only details the rent review process which should be followed, but also emphasises some key principles in rent negotiations which are so often conveniently forgotten, especially by landlords’ agents.

“Although it is disappointing that a new rent system has not emerged from the months and years spent on it, it has not been a waste of time and resources.  There is now a much greater understanding about how rent reviews should be done and the importance of honesty and transparency in the review process and especially the cardinal principle that tenants should not be rented on their own improvements.  The amnesty has been a huge help in this regard.”

Although many problems with rent reviews are associated with an out of date rent test, much of the blame must also lie with the ways in which rent reviews have been carried out over the years.  The TFC’s Code describes the legal basis for rent reviews and provides a practical, step-by-step approach to conducting a rent review. The Code also signposts alternative ways to resolving disputes and how to deal with breeches of the Code.  STFA recommend it as a must read for both landlords and tenants and particularly land agents.”

The TFC’s Code of Practice on Conducting Rent Reviews is available here.  Hard copies have already been distributed to STFA members.

By tfadmin • Uncategorized •

Oct 15 2020

STFA launches last ditch amnesty plea

News Release

Scottish Tenant Farmers Association

15^th October 2020

STFA launches last ditch amnesty plea

The Scottish Tenant Farmers Association has welcomed Tenant Farming Commissioner, Bob McIntosh’s timely warning today of the fast approaching deadline of the amnesty on tenant’s improvements. In response to Covid 19 restrictions and STFA’s request in March, the Scottish Government agreed to extend the amnesty period by six months to 12^th December 2020.

Time is running out, but STFA believes that with goodwill on both sides there is still time for tenants to finalise amnesty agreements with their landlords in the remaining two months using the informal process. However, where it may not be possible to conclude the amnesty before 12^th December tenants must serve a formal notice in order to preserve their position.

Commenting on the situation, STFA Chairman Christopher Nicholson said; “Although the majority of tenants have already completed the amnesty process, we are aware that, as predicted, there are some who have left it to the last minute. Despite this, we would urge landlords and tenants to work together to agree and record these improvements in the short time available.

“As has been said many times before, the amnesty is a unique opportunity for tenants to rectify past mistakes and omissions in their paperwork which otherwise, could prevent them from receiving waygo compensation for improvements made over the course of the tenancy. This could be the difference between coming out of the tenancy with a comfortable nest egg or leaving with very little bar the value of your stock. Even if you have no intention of giving up the tenancy it makes sense to get everything in order and, in any case, the amnesty will be essential for future rent reviews to ensure tenants are not charged rent on their own improvements.

“STFA is also aware that there are a minority of landlords or their agents who continue to be reluctant to co-operate or even engage in the amnesty process. This type of behaviour has been condemned by industry stakeholders and tenants in this position should inform the Tenant Farming Commissioner without delay. The next step will have to be serving a formal amnesty notice before the deadline on 12^th December.

“It is important to remember that an amnesty notice must include not only a full and accurate record of improvements but also details of them and the manner in which they were carried out as well as reasons as to why it is fair and equitable for them to be considered for compensation to be payable at waygo. The more accurate the notice is, the more difficult it will be for a landlord to sustain an objection. Assistance is available from representative bodies such as STFA, and the Tenant Farming Commissioner but, at this stage professional help is strongly advised.

“This really is the last chance to take advantage of the amnesty and secure the future for succeeding generations of tenant farmers. Don’t ignore it!”

By tfadmin • Uncategorized •

May 22 2020

STFA calls for farm rent reductions amid Covid19 crisis and looming economic recession

Scottish Tenant Farmers Association

News Release

20^th May 2020

STFA calls for farm rent reductions amid Covid19 crisis and  looming economic recession

As the May term date approaches, the Scottish Tenant Farmers Association is calling on landlords to agree to reduce farm rents, or at the very least a rent standstill, to allow tenant farmers to recover from the havoc caused by the Covid19 pandemic and to prepare to cope with the prospect of a no-deal Brexit compounded by the spectre of an imminent recession.

In a letter to The Tenant Farming Commissioner, Bob McIntosh and recently appointed Chair of Scottish Land and Estates, Mark Tennant, STFA Chairman Christopher Nicholson said that a number of tenants had been in touch expressing surprise and disappointment that not only are some landlords intent on pursuing rent increases in the current climate but there are others who are serving notices to increase rents for next May, despite their tenants having had rent reviews in the last 2 to 5 years. STFA is also aware that there have been a number of rent notices served last year for reviews in November this year.

Christopher Nicholson continued; “We think it is unreasonable and unfair to seek rent increases at this time from tenants who are up to date with rent reviews given the uncertain effects and associated stress caused by Covid-19 and Brexit on agriculture.  Indeed, all sectors are showing poorer profitability compared with recent years except for the pigs, fruit and veg sectors which are largely absent from the tenanted sector, and the general outlook is uncertain with widespread predictions for the worst depression for 300 years. As well as acting insensitively, seeking rent increases and serving rent notices at the moment can be seen as an opportunistic attempt to increase rents using the current open market rent test before a fairer productive capacity test can be introduced which would allow rents to vary up or down in line with farm profitability.”

Many tenant farming businesses have become reliant on diversified enterprises, such as tourism, farmers markets and farm shops and are now seeing their diversification income disappear. Both UK and Scottish governments recognise that businesses are under pressure – and have made emergency support available. Unfortunately, many of these diversified businesses are not eligible for aid schemes and will now be suffering from much reduced incomes.

In recent months, STFA has become increasingly frustrated at the continuing delay by the Scottish Government in implementing the new rent test, based on the productive capacity of the farm which would allow rents to be adjusted in light of economic conditions. Instead, rents continue to be reviewed under the current open market test making rent reductions very difficult to achieve and tenants fear that they may be pressurised into either accepting an unsustainable rent or face a costly dispute with the landlord which will not only sour relationships but may also end up in the Land Court.  Concerns over mental health in agriculture have risen up the agenda and worries over rental disputes on top of falling incomes will inevitably increase the levels of stress tenants will be feeling as the economic and social repercussions of Covid-19 and exiting the EU begin to be felt.

STFA has expressed tenant farmers’ concerns to Bob McIntosh and has urged Cabinet Secretary Fergus Ewing to make progress with the new rent test and is now asked Scottish Land and Estates to encourage landlords to withdraw existing rent notices, consider rent reductions and call a moratorium on rent increases until we see some economic stability and certainty in the sector. After all, in the spirit of good relationships, landlords should be prepared to take a share in any downturn in economic fortunes.

By tfadmin • Uncategorized •

May 13 2020

STFA Welcomes Extension to Tenants’ Amnesty

Scottish Tenant Farmers Association

News Release

13^th May 2020

STFA Welcomes Extension to Tenants’ Amnesty

The Scottish Tenant Farmers Association has welcomed today’s endorsement by the Scottish Parliament of Cabinet Secretary, Fergus Ewing’s decision to extend the tenants’ amnesty on improvements for a further six months until the 12^th December 2020. The amnesty extension is being implemented through secondary legislation and will add a further six months to the current deadline.

Commenting on the news, STFA Chairman, Christopher Nicholson said; “This will be very good news for tenants who have been increasingly concerned that they would not be able to complete their amnesties before the June deadline due to difficulties they have been experiencing from the current Covid19 crisis. We commend the Cabinet Secretary for listening to STFA’s concerns and his officials for their prompt response to STFA’s request for an amnesty extension and finding parliamentary time to implement the necessary legislation.

“This does not mean, however, that tenants and their advisers should put their amnesties on the backburner, but they should continue to press ahead and get amnesties concluded in good time before the new deadline of 12^th December. STFA has been advising tenants to proceed as though the amnesty would be expiring on June 12^th so we hope that most tenants intending to submit an amnesty will already be close to finalising it, and we would now urge them not to take their feet off the gas. The next few weeks could be an ideal time to get the amnesty done, once IACS applications are completed and before the busy summer season begins, many may even have time on their hands with the cancellation of summer shows and other activities.

“The amnesty will also provide a breathing space for those whose amnesties are at an early stage, but time is short and experience has shown that at least six months is needed to complete an amnesty, even in good times. Most land agents are operating from home and STFA believes most of the paperwork could be attended to despite the lockdown period. We would encourage landlords’ and tenants’ agents to prioritise completion of amnesties and advise any tenant experiencing difficulties in contacting or receiving a response from their landlord’s agent to inform Bob McIntosh, the TFC, and/or STFA immediately.”

For further information, please contact:

Christopher Nicholson:   01988 500423

Angus McCall:                   07767 756840

By tfadmin • Uncategorized •

Feb 27 2020

STFA welcomes Commissioner’s intervention in amnesty debate.

STFA welcomes Commissioner’s intervention in amnesty debate.

STFA has welcomed Tenant Farming Commissioner’s intervention in the amnesty debate.

The Tenant Farming Commissioner, Bob McIntosh has urged both landlords and tenants to work together to make the most of the waygo amnesty.  In commenting that time is running out for those who wish to make use of the amnesty Bob McIntosh said:

“The onus to complete the amnesty process is on both the tenant farmer and the landlord, and I would encourage all parties to ensure the process is completed before the deadline.

By tfadmin • Uncategorized •

Feb 27 2020

STFA warns tenants against factors running down amnesty clock

Scottish Tenant Farmers Association

News Release

25th February 2020

STFA warns tenants against factors running down amnesty clock

The Scottish Tenant Farmers Association is warning tenant farmers to be on their guard against landlords or their agents if they suspect them of using delaying tactics in an attempt to “run down the clock” before the amnesty period finishes on June 12^th. With only 3 months to go before the tenants’ amnesty on improvements expires, STFA has been contacted by tenants becoming increasingly frustrated at the lack of progress being made in finalising their amnesties by landlords or factors who appear to be deliberately awkward or officious in an attempt to slow down amnesty negotiations.

The amnesty is an important provision introduced in the Land Reform Act (Scotland) 2016 which allows for certain past improvements carried out by the tenant to become eligible for end of tenancy compensation despite missing notices or consents. The 3 year amnesty period, during which a tenant may notify his landlord of the works carried out on the farm which he wishes to be registered as improvements, expires on 13^th June 2020. STFA has stressed the importance of the amnesty as not only being essential for agreeing what will be eligible for compensation at waygo, but also essential for the new rent test and for clarifying who owns what for the benefit of future generations.

Commenting on the situation STFA Director Angus McCall said; “Unfortunately the uptake of the amnesty continues to be slow and there will be a large number of tenants who will miss out on this once in a lifetime opportunity, despite the efforts of STFA. It is, therefore deeply disappointing that we are being approached by so many who, having put a great deal of time and effort into completing their amnesties over the last couple of years, are now finding it difficult to bring negotiations to a conclusion and complete the amnesty.

“Following discussions with tenants and land agents, we are convinced that amnesty discussions are being deliberately hampered in an attempt to run down the clock and in doing so, there may be breaches of the Code of Practice which should be referred to the Tenant Farming Commissioner without delay.

“The Code of Practice, reinforced by supplementary guidance, clearly sets down guidelines on how both parties should behave in amnesty discussions and defines breaches of the code which should be referred to the Commissioner. Common breaches include a lack of co-operation and sharing of information between parties, the unwillingness of land agents to visit the farm and discuss improvements on site and a lack of communication prolonging discussions much longer than the recommended 9 months. Stalling tactics seem to have increased over the last couple of months as the deadline approaches with landlords’ agents “gilding the lily” by demanding detailed information, well beyond what is necessary to establish the existence and eligibility of improvements and who paid for them.

“The Amnesty was the brainchild of Scottish Lands and Estates and continues to have their full backing, and it was anticipated that the spirit of the amnesty would be respected by landlords’ agents, sadly this has not always been the case. Time is now of the essence and if tenants believe they are being obstructed by the actions of landlords or agents, they should act immediately and not be nervous about referring matter to Bob McIntosh the Tenant Farming Commissioner. Experience has shown that the Commissioner’s intervention has frequently resolved an impasse without disturbing relationships between the parties.

“Tenants should also remember that all is not lost if they have not managed to finalise their amnesty agreements by 12^th June. They still have the option to serve a formal amnesty notice on their landlord. However, in order to do so, they will have to have already compiled a list of eligible improvements along with supporting evidence. This will tie them and their landlords into an inflexible formal process with statutory timelines, less room for manoeuvre and if they fail to reach an agreement, the Scottish Land Court will be the ultimate arbiter.

By tfadmin • Uncategorized •

Jan 25 2020

STFA welcomes cap on convergence payments

News Release

Scottish Tenant Farmers Association

23rd January 2020

STFA welcomes cap on convergence payments

The Scottish Tenant Farmers Association (STFA) has welcomed today’s announcement by the Cabinet Secretary Fergus Ewing confirming that convergence funding payments of £80 million and an additional £10 million for Regions 2 and 3 will be made to farmers and crofters by the end of March 2020.

This represents the distribution of the first tranche of the £160 million convergence money promised to Scotland by the UK Government following 6 years of lobbying by Scottish farming interests. The remaining £70 million is due to be distributed in the next financial year and will be paid by the end of March 2021, once delivered by the UK Government. Of this £70 million, £42 million may be used to maintain next year’s LFASS payments.

Not including addition payments of £13 million towards the LFA and £15 million towards the beef calf and sheep coupled schemes, the remainder of the £90 million due by the end of March 2020 represents a top up of £15.86 per hectare for Region 1, £28.03 per hectare for Region 2, and £11.87 for Region 3.

A cap of £55,000 is to be applied to the total combined convergence totals which is expected to affect around 80 businesses in Scotland.

Following the announcement by the Cabinet Secretary, STFA Chairman Christopher Nicholson said: “We now have clarity as to when the convergence funding payments to farmers and crofters will be made, which is welcome news given the uncertainties faced by Scottish agriculture resulting from Brexit. The Cabinet Secretary has adhered to the spirit of convergence and ensured that the funding will go to where it was originally intended.”

“Having argued strongly in favour of capping payments, we welcome the cap in principle. However, capping convergence payments at £55,000 will affect very few producers and we believe a lower cap at £35,000 would have given a fairer distribution of funds bearing in mind the minimal activity requirements for BPS claims. To put into perspective, at a level of £55,000 the cap will only affect Region 1 businesses if over 3,400 ha in size, or over 1,900 ha for Region 2 and 4,600 ha for Region 3.”

“Some of the convergence funding will be used to maintain LFASS payments for this year and next. With such a large proportion of Scotland’s farm businesses located in remote and marginal areas it is vital that the LFASS budget is maintained until a new replacement scheme is introduced.”

By tfadmin • Uncategorized •

Dec 1 2019

Amnesty key to future of farm tenancies

Scottish Tenant Farmers Association

News Release

1^st December 2019

Amnesty key to future of farm tenancies

STFA warns more than half of tenants still to make a start

The Scottish Tenant Farmers Association (STFA) has warned that more than half of Scotland’s tenant farmers are in danger of not completing the amnesty on tenant’s improvements. The amnesty, initiated by Scottish Land and Estates, has been hailed as one of the main benefits to tenants in the 2016 Land Reform Act. It created a mechanism enabling landlords and tenants to make a definitive record of improvements even if proper procedures were not followed. The amnesty began on 13^th June 2017 and will expire in just over 6 months on 12^th June 2020. Experience has shown that the amnesty process is likely to take at least 6 months so anyone not making a start in the next few weeks is likely to run of time.

In issuing his stark warning, STFA Chairman Christopher Nicholson said; “We have spent the last week meeting and talking to tenants up and down the country and it has become plain that although most of those who attended the meetings had either finished their amnesties or were working at them, they are in the minority, and the vast bulk of tenants have not even made a start.

“The importance of the amnesty cannot be stressed enough. Not only is it a once in a lifetime opportunity to make good some of the mistakes of the past and ensure that investments made by generations of tenants are officially recognised, but it is also key to using many of the new provisions in the 2016 Act and to the future of your tenancy.

“For example; an agreed list of tenants improvements and other works are crucial for transferring the tenancy to the next generation and for receiving end of tenancy compensation; the new rent test is based on what the holding can produce with what the landlord provided and will depend on an agreed list of improvements and fixtures so they can be disregarded; and, thirdly, knowing who owns what is vital in the event that either the tenant buys out the landlord’s interest or vice versa.

“In short, there will never be another amnesty and future generations may will live to regret that their forebears neglected this golden opportunity to put everything in order. We would strongly urge all tenants to make a start immediately.”

STFA ‘Planning for the Future’ meetings continue this week with Bute on Monday 2^nd (Victoria Hotel), Inverness on Wed. 4^th (Jury’s Inn) and Thainstone on Thurs. 5^th (Glengarioch Suite AMN). All meetings start at 7.30pm with Davidson and Robertson, the Tenant Farming Commission and Shepherd and Wedderburn speaking, accompanied by Ian Davidson the National Adviser to the new Land Matching Service. All tenants are welcome and non-members have the opportunity to join on the night.

By tfadmin • Uncategorized •

Nov 6 2019

GOVERNMENT URGED TO ALLOCATE CONVERGENCE MONEY WISELY AND FAIRLY

Scottish Tenant Farmers Association

News Release

6^th November 2019

GOVERNMENT URGED TO ALLOCATE CONVERGENCE MONEY WISELY AND FAIRLY

The Scottish Tenant Farmers Association is urging the Scottish Government to think carefully before allocating the hard won convergence money which is causing so much controversy. The Cabinet Secretary has a difficult balancing act in distributing the new funding fairly and managing the expectations of different sectors of the industry, particularly the crofting sector who believe they are not receiving due benefit from the government proposals.  It now appears that, thanks to the vigorous lobbying of the Crofting Federation, an attempt is being to address their concerns by introducing a further £10 million from the second tranche of £80 million to be distributed to those farming in the most marginal areas in 2019/20.

Commenting on the situation STFA Director Angus McCall said: “The Scottish government, has now put some more flesh on the bones, of the proposals for distributing the convergence money. As anticipated, they have not pleased everybody, although they will go some way towards helping many in Region 1 whose low historic payments were setting them at a disadvantage during the convergence period.  As has been recognised, it is only fair that the bulk of the funding is delivered to those in the more marginal areas and the Cabinet Secretary has moved swiftly to address concerns expressed by the Crofting Federation, that active farmers and crofters in Regions 2 & 3 were not receiving their rightful share.

“However, the current proposals only relate to the first tranche of £80 million and we look forward to discussing how make the best use of the next £80 million and we understand that will include discussion on the design of a replacement for the LFASS.

“As well as being seen as compensation for having had £160 million withheld, the convergence money has the potential to give the industry a one-off financial boost at a time when it is most needed and consequently it must be spent wisely on those who will derive most benefit from it, and that means excluding the non-active. To achieve this, we would like to see convergence monies in Region 2 & 3 land being restricted to farmers and crofters in receipt of LFASS, thus ensuring non-active farmers or land managers do not benefit from the windfall payments.  In effect this would include land, currently in receipt of single farm payments, which has been or is in the process of being converted to forestry or about to be planted with trees, land with no stock and slipper farmers.

“STFA believes that the higher rates of convergence payments, especially on large areas in Regions 2 & 3 would give rise to undeserved over-compensation and has urged Cabinet Secretary, Fergus Ewing, to introduce a cap on payments.

“STFA has also spoken to the Cabinet Secretary, to press him to regard the convergence money as an opportunity to establish a fund to address the anomaly of new entrants who were unable to draw down entitlements from the National Reserve. These new entrants have been operating at a disadvantage without the benefit of support payments and an injection of cash would provide a welcome cash boost to help develop their businesses.

By tfadmin • Uncategorized •

Oct 29 2019

STFA WELCOMES CONVERGENCE ANNOUNCEMENT

Scottish Tenant Farmers Association

News Release

29^th October 2019

STFA WELCOMES CONVERGENCE ANNOUNCEMENT

The Scottish Tenant Farmers Association has welcomed today’s announcement by the Scottish Government that the first £80 million of the £160 million of convergence money, historically due to Scotland, has been allocated and will be distributed to active farmers and crofters with a focus on those farming in the uplands, hills and islands. Further details on how the funding is to be distributed are to be made available in due course.

Commenting on the news, STFA Chairman Christopher Nicholson said; “This news is obviously very welcome at a time when agriculture faces huge uncertainty about future trade, availability of markets and support arrangements. The likelihood of an imminent general election only adds to the confusion, especially as current support payments have only been guaranteed until the end of the current parliament and the length of any future transition period is still undecided.

“This money represents compensation from under-payment of Pillar 1 support payments and it is generally accepted that it should stay in Pillar 1. However, as expected, there are differing views as to who should receive the top-up payment and the Cabinet Secretary has some difficult decisions to make which will not please everyone.  There is little detail in the announcement of how the first tranche of convergence money will be distributed and whether or not the second installment of £80 million will be distributed in the same manner.

“STFA agrees that the bulk of the convergence payments should be received by those farming in the more marginal less favoured areas, but care should be taken to ensure that they are only distributed to farmers and crofters who are actively farming the land and are in the most need. Holders of large tracts of land with minimal activity should be excluded or at least have their payments capped, to avoid over- compensation.  Moreover, convergence payments should be denied to land, currently in receipt of single farm payments, which has been or is in the process of being converted to forestry.  Most of these aims could be achieved by using the LFASS mechanism as a delivery template.

“STFA is writing to Cabinet Secretary, Fergus Ewing, to suggest that this should be seen as an opportunity to address the anomaly of new entrants who were unable to draw down entitlements from the National Reserve. These new entrants have been operating at a disadvantage without the benefit of support payments and an injection of cash would provide a welcome cash boost to help develop their businesses.”

By tfadmin • Uncategorized •