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CENSUS SHOWS STAGGERING FALL IN TENANTED LAND

CENSUS SHOWS STAGGERING FALL IN TENANTED LAND

STAGGERING FALL IN TENANTED LAND

The Scottish Government has today confirmed that the long term trend in falling livestock numbers is again matched by the continuing shrinkage in the tenanted sector.  Over the last year cattle and sheep numbers have dropped by 2.3% and 2.5%, the size of the pig herd has seen a 12.1% reduction and the area of rented land has contracted by a staggering 21,000ha representing a loss of 370 (5%) tenanted holdings.

Commenting on the situation STFA Chairman Christopher Nicholson said:  “It is ironic that whilst Scotland’s flagship food and drink export sector flourishes and demand for Scottish beef is at an all time high, agricultural production is dropping.  The fall in livestock numbers over the past year is not unexpected, following the appalling weather conditions faced by many of our farmers, but the underlying trend is worrying particularly in fragile areas where the marketing and processing infrastructure will be reaching a tipping point as throughput declines.  These figures demonstrate the need for continuing targeted direct support reinforced by coupled payments to help arrest the decline in livestock numbers so that we can satisfy the demand for our produce both home and abroad.

 “Government figures echo the reality of a tenanted sector in decline as landlords withdraw land.  STFA has been aware of an increasing number of tenancies being lost, but even the most pessimistic estimates come nowhere near the 21,000 ha in the census.  Unless positive action to taken to ensure tenanted land remains within the sector there will be fewer and fewer opportunities for new entrants and the remaining rungs will vanish from the farming ladder.

 “Despite claims to the contrary, there is spare agricultural capacity and opportunities in our hills and glens.   You don’t have to travel far to see increasing examples of under-utilisation of farmland and chronic lack of investment on farms rented out on short-term arrangements.  This is stifling initiative and preventing Scottish agriculture from realising its potential.  The ministerial review of agricultural holdings is a welcome chance to sort out the problems of the present, such as the ailing rent review system, and to look towards developing a fairer land tenure structure that will provide opportunities for secure tenure for the next generation of farmers to develop and grow their family businesses.”

SHORT FORM ARBITRATION AND PRACTITIONERS GUIDE TO RENT REVIEWS LAUNCHED BY SAAVA

SHORT FORM ARBITRATION AND PRACTITIONERS GUIDE TO RENT REVIEWS LAUNCHED BY SAAVA

SAAVA’S ARBITRATION INITIATIVE WELCOME BUT REFORM STILL URGENTLY NEEDED TO RENT SETTING FORMULA

 The Scottish Tenant Farmers Association have welcomed today’s launch of the Practitioners Guide to Rent Reviews and the announcement of a new Short Form Arbitration service as a step in the right direction for a cost effective and quick alternative to the Scottish Land Court.  STFA recognises the work SAAVA has put into the developing the Guide and the new arbitration system and expects them to be valuable tools in the rent review process.

Commenting on the introduction of SAAVA’s arbitration scheme STFA chairman Christopher Nicholson said: “The Practitioners Guide will provide a much needed rule book governing the conduct of rent reviews.  We hope that the Guide will help and encourage an accurate and consistent application of the rent review process throughout the country and remove some of the brinkmanship and pressure tactics that are all too evident at the moment. The concept of short form arbitration was mooted three years ago and I am pleased that it is now ready for use in the rent review process.  The success of the new system will, of course, hinge on the members of the panel of arbitrators and the confidence they will inspire.

“This should not, however, be seen as the end of rent review problems.   In detailing the rent review process the Practitioners Guide only too clearly emphasises the influence that open market lettings have on sitting tenants rents, inevitably causing rents to escalate with little prospect of future reductions in times of falling profitability.  Rent reviews will continue to be contentious, expensive and stressful as long as rents are driven by a scarce and over-heated open market which takes little account of what the farming business can actually stand.

 “The evidence is there to substantiate this and we will be pressing the Cabinet Secretary to revisit the way in which rents are set during the Agricultural Holdings Review.   By contrast, in England where rents are based on the productive capacity of the holding our sister organisation, the TFA, is urging tenants to serve rent notices on their landlords to reduce rents following the last few years of falling farm incomes.  This is not an option in Scotland with our market driven rent system.

 “The rent rack will continue unless decisive action is taken. Tenant farmers cannot continue to farm with the spectre of regular rent hikes over-shadowing and threatening their businesses.    The overwhelming view of tenant farmers is that this one-sided rent formula must change.  Rents must reflect the reality of farm economics, particularly as we approach a new CAP regime of considerably reduced support payments.”

CABINET SECRETARY WRITES LIMITED PARTNERSHIP TENANTS

CABINET SECRETARY WRITES LIMITED PARTNERSHIP TENANTS

 

SALVESEN RIDDELL RULING – DOES IT AFFECT YOU?

 The Scottish Tenant Farmers Association is urging all tenant farmers who are or have been involved in Limited Partnership tenancies to contact the Scottish Government as soon as possible following a letter issued today by the Cabinet Secretary Richard Lochhead to tenant farmers who may be affected by the recent Salvesen Riddell judgement by the UK Supreme Court.

 In his letter the Cabinet Secretary said:

 “I am writing to you as a result of the Supreme Court judgement in the Salvesen v Riddell case in April 2013. This is a complex legal case about farming tenancies and only a relatively small number of people may be affected by the ruling. 

 “Subject to certain limited exceptions, to be in the affected group you would need either to have served or received a dissolution notice for a Limited Partnership between 16 September 2002 and 30 June 2003.

 

“Unfortunately as we have no official record of who is affected I am taking the unusual step of writing to tenant farmers and landlords who may be involved in Limited Partnerships.

 “For those who are affected, the Scottish Government intends to resolve this situation by bringing forward legislation in Parliament to amend the Agricultural Holdings (Scotland) Act 2003 during the next parliamentary term; and we are now consulting with both landlords and farming tenants to ensure changes to the legislation are as fair as possible.

 “My officials have met with representative bodies including the Scottish Tenant Farmers Association, Scottish Land and Estates, Royal Institute of Chartered Surveyors, National Farmers Union for Scotland and the Scottish Agricultural Arbiters & Valuers Association.

 “However, it is also important that we make direct contact with landlords and tenants who may be affected by the Supreme Court Ruling.

 “If you think you may be affected, please let us know by filling in a brief online questionnaire available on our website at:

 http://www.scotland.gov.uk/limitedpartnerships

 or by calling the Limited Partnership team on 03002449847. You can also email the dedicated mail box at limitedpartnerships@scotland.gsi.gov.uk

 “This questionnaire is completely confidential, only takes a couple of minutes, and will help ensure the Scottish Government’s proposed legislative changes are as fair as possible. This process will help you understand your position better and allow us to engage directly with you as appropriate.

 “Once a legal remedy has been put in place it will be important for you to seek independent legal advice. Your solicitor, Citizen’s Advice Scotland and the organisations mentioned above should be able to help with this.

 “Our website will also provide up-to-date information about the action being taken by the Scottish Government.”

STFA welcomes Richard Lochhead’s letter to tenants who may be affected by the Salvesen Riddell decision.  STFA has been helping the Scottish Government trace tenants in Limited Partnerships and these people will shortly be receiving a letter from Mr Lochhead.  We will be contacting our members directly but it is important that everyone affected is made aware of what happening and how they may be affected and we would encourage them to respond as soon as possible to this call. 

 

STFA can be contacted on 01408 633275 or by email: stfa@tfascotland.org.uk

HILLS MUST NOT BECOME CASH COW FOR THE UNDESERVING

HILLS MUST NOT BECOME CASH COW FOR THE UNDESERVING

HILLS MUST NOT BECOME CASH COW FOR THE UNDESERVING

The Scottish Tenant Farmers Association is expressing its concerns to the Scottish Government that the inclusion of deer farmers in the new CAP support regime may encourage some sporting estates to fence in wild deer on hill ground to qualify as eligible for entitlement to Single Farm Payment.

 Commenting on the situation STFA chairman Christopher Nicholson said: “Deer farmers missed out on the last CAP programme and so it is only right and proper that they become eligible for support in the future.  However, it is crucial that deer farming is rigidly defined so that only boa fide deer farmers are able to draw down support payments and the floodgates are not opened for substantial areas of hill to be enclosed and stocked with wild deer masquerading as domestically run farmed animals. 

 “Future reductions in the CAP budget makes it all the more important that SFP is targeted at those who need support to maintain their businesses and that farming activity is robustly defined.  Actively farmed inbye land will be relatively easy to define, but steps must be taken to prevent Scotland’s vast hill areas becoming a cash cow for the undeserving”

STFA WELCOMES CABINET SECRETARY’S COMMITMENT TO TENANCY REVIEW

STFA WELCOMES CABINET SECRETARY’S COMMITMENT TO TENANCY REVIEW

STFA WELCOMES CABINET SECRETARY’S COMMITMENT TO TENANCY REVIEW

The Scottish Tenant farmers Association has welcomed the Cabinet Secretary’s announcement today that he is to take charge of a thorough and wide ranging review of the tenanted sector including consideration of extending tenants’ rights to buy their farms. 

 In response to the announcement STFA chairman Christopher Nicholson said: “We are pleased that the Cabinet Secretary has recognised that the tenanted sector is ailing and in need of an overhaul.  We are still working with 65 year old legislation, long past retirement age, and we look forward to working with government and other industry bodies to make tenancy law fit for the 21st century. 

“It is also good news that the Cabinet Secretary has  confirmed that, if implemented, ARTB will only apply to 1991 fully secure tenancies.  This must remove the fear held by landlords that rights to buy could be extended to short-term tenancy arrangements.

 “STFA also welcomes confirmation that the absolute right to buy for tenant farmers is to be considered as part of the review.  It is high time that the emotion and rhetoric surrounding ARTB is put to one side in favour of a rational debate, taking into account not only the effect it would have on individual lives and businesses but also the impact it would have on Scottish agriculture and the benefits it would bring to rural Scotland. 

SPORTING INTERESTS MUST PLAY FAIR WITH FARMING TENANTS

 

SPORTING INTERESTS MUST PLAY FAIR WITH FARMING TENANTS

In response to concerns about the often conflicting interests between field sports and agriculture the Scottish Tenant Farmers Association is urging landlords and their shooting tenants to play fair with farming tenants.  Autumn is frequently the time when the competing demands of farming and shooting can flare into dispute as ripening crops are subjected to marauding pheasants causing crop damage and heated tempers.

 Commenting on the situation STFA spokesperson Angus McCall said:  “Field sports can be a major source of disagreement between landlord and tenants especially where shooting is rented out with keepers eager to provide good sport for their clients.  Tenant farmers, trying to make a livelihood from the farm, understandably feel that agricultural production is the main purpose of the lease and sporting activities should take second place and fit in with farming practices.   Relationships deteriorate rapidly when crops are damaged by birds or deer and shooting parties interfere with the day to day running of the farm. 

 “This conflict could all too easily be resolved if landlords and gamekeepers treated farming tenants with respect, consulted with them and tried to work together.  Although the TFF Guide to Good Relations provides some advice on relationships between the shooting tenant and the agricultural occupier, the Code of Good Shooting Practice* is deafeningly silent on relationships with the farming tenant – the full time occupier on the land.  The Code waxes lyrical on respect for the countryside and on the welfare for the shooting quarry, but nowhere is there any mention that the sport is taking place over another person’s workplace whose interests also have to be taken into account.  If this Code is to be credible, this flaw should be addressed immediately and recommendations made to improve relationships between shooters and farmers.

 

“As the shooting season approaches we will be encouraging Scottish Lands and Estates and their members to treat farming interests with consideration and respect, make good any game damage promptly and make sure that the sporting activity takes place within clear guidelines agreed at the start of the season.  In return, the farming tenant will undoubtedly co-operate with the sporting enterprise and arrange his farming activities accordingly.”

REALISM NEEDED IN LAND AND RENT MARKETS

REALISM NEEDED IN LAND AND RENT MARKETS

 

The Scottish Tenant Farmers Association is concerned that the recent publicity claiming record highs in farmland prices will heighten landlords’ expectations in the next round of rent reviews in November.

Last week the surveyors professional body RICS, announced that a survey of members opinions was indicating that farmland prices had trebled in the last decade and were expected to rise even further over the next few years. Furthermore, the RICS spokesperson said  “The growth in farmland prices in recent times has been nothing short of staggering.  In less than ten years we’ve seen the cost of an acre of farmland grow to such an extent that investors – not just farmers – are entering the market.  If the relatively tight supply and high demand continues, we could experience the cost per acre going through the ten thousand pound barrier in the next two to three years.”

STFA chairman Christopher Nicholson said: “This would seem to be yet another attempt to talk up the land market and we can expect to see this hype reflected in the rental sector in a couple of month’s time as the rent term date approaches and land agents try and use the open market to drive up rents. 

“The capital cost of land rarely reflects its agricultural productivity and this is as true in the rental market as scarcity causes rents to overtake profitability.  It is high time that commonsense was brought to bear and sitting tenant rents become based on the real worth of the land, that is, what the farm can produce rather than what it could fetch in an over-heated market stoked by profit driven land agents. 

“The failure of last year’s report by the Rent Review Working group to recognise the weakness of the rent review formula and recommend change was a major disappointment to the tenanted sector.  The  Group’s lacklustre report is widely regarded as a lost opportunity to stabilise these unsustainable farm rents. 

STFA will be using the forthcoming review of agricultural holdings to press for radical change to the way in which farm rents are set to ensure tenants’ businesses are not crippled by unreasonable rent demands.  The issue of farm rents is a major problem and one of the main causal factors in calls for serious land reform in Scotland.  The tenanted sector will continue to stagnate unless these real issues are addressed as a matter if urgency.

Summer Shows give tenants a chance to air their views

Summer Shows give tenants a chance to air their views

Summer Shows give tenants a chance to air their views

 The Agricultural Shows taking place around the country over the next week or two provide a timely opportunity for tenants to discuss the recent developments relating to the tenanted sector.  With the on-going work of Land Reform at Holyrood and Westminster, and the announcement by the Cabinet Secretary Richard Lochhead that there will be a review of Agricultural Holdings legislation in 2014, we now have a real opportunity to tackle the problems faced by Scotland’s tenant farmers.

This year, as usual, STFA will have a stand at the Turriff Show.  As well as being the rural heartland the SNP, Scotland’s governing party, the North East has a large population of tenant farmers whose views are important to the tenancy debate.  The show will provide an opportunity for tenants to discuss tenancy issues and speak to political representatives.

STFA is also having its first outing to the Dumfries show on Saturday; The South West has also large areas of tenanted land and is home to some of Scotland’s biggest estates

Speaking in advance of the Shows Chairman Christopher Nicholson said; “We are pleased that, following the Cabinet Secretary’s recent announcement, an open debate is developing around Land Reform and Agricultural Holdings legislation including the absolute right to buy for tenants.  Topics up for discussion include the test for setting farm rents, compensation to outgoing tenants for their improvements, and provisions for assignation and succession of farm tenancies.”

“Family farms are the backbone of many remote rural communities, and all the arguments should be explored in full to ensure long term sustainable family farming in the tenanted areas for future generations.”

“Land Reform and changes to Agricultural Holdings legislation are part of the ongoing political process and it is vital that tenants’ views are heard.  Of the 484 recently published submissions to the LRRG, over half were from estates, landowners and their professional representatives, all happy with the current status quo.  This has been interpreted by some as demonstrating little appetite for change amongst tenants, but the views heard by STFA at this summer’s shows suggest a different picture.”

 

TFF AND SAAVA LAUNCH SHORT FORM ARBITRATION FOR TENANCY DISPUTES

TFF AND SAAVA LAUNCH SHORT FORM ARBITRATION FOR TENANCY DISPUTES

POTENTIAL FOR RESOLUTION PROCESS TO STRIP TIME AND COST OUT OF TENANT AND LANDOWNER DISPUTES

 

TFF and SAAVA launch short form arbitration system

 

 Tenant farmers and landowners in Scotland now have access to a short form arbitration process to deal with disputes over rents.

The process has been developed by the Scottish Agricultural Arbiters & Valuers Association (SAAVA) at the request of the Tenant Farmers Forum (TFF).

This is the latest development in a series of workstreams for the TFF designed to facilitate good working relationships between landowners and tenants.  It follows the publication of ‘Farm Rent Reviews – Introduction and Guide to Good Practice’ in May.

In welcoming the move Scottish Tenant Farmers Association Chairman Chris Nicholson said:

“Settling rental disputes is becoming an increasingly time consuming and expensive exercise and STFA welcomes SAAVA’s initiative to introduce a fast track and cost effective arbitration process and will be encouraging members to make use of the service. 

“Tenants should never feel compelled to agree a rental increase which they believe to be unjustified because the alternative is a long drawn out, costly and stressful legal battle in the Land Court and the introduction of short form arbitration is a step in the right direction. 

We now look forward to a system of rental determination by an independent expert being developed as the preferred option for most tenant farmers.”

 Phil Thomas, Chairman of the TFF said:

“The introduction of the new short form arbitration system has full TFF support. We believe that it will be very much welcomed by both tenants and landowners as a direct and straightforward way of resolving differences in view about rents, without having to resort to the legal process of going to the Scottish Land Court.

“We also look forward to the development of the next SAAVA initiative which relates to Expert Determination. 

“The primary purpose of the Tenant Farming Forum is to help to promote a healthy farm tenanted sector in Scotland. We see simpler and less costly processes, facilitating good tenant-landlord relationships as an important part of that objective.”

Martin Hall, President of SAAVA commented:

“Our new Short Form Arbitration Process is designed to be a more straightforward and cost effective means of dispute resolution for the agricultural tenanted sector in Scotland.   SAAVA believes that our robust Short Form Arbitration tool will be extremely useful to tenant farmers and landowners and we are proud to launch this tool alongside our industry colleagues on the TFF.

“Our Short Form Arbitration Process is the result of 12 months of solid work and input from our professional members. We are now focussing on the development of further alternative dispute resolution tools, including making it easier for tenants and landowners to take the Independent Expert approach. This work will follow on from discussions in the Rent Review Working Group where there was a clear desire for cheap efficient methods for reviewing, setting and agreeing agricultural rents.

“SAAVA membership consists of practical valuers and, alongside the Short Form Arbitration, SAAVA has a panel of trained and qualified arbiters able to undertake appointments as and when cases arise.”

Scott Walker, Chief Executive of NFU Scotland added:

“NFUS welcomes the launch of this faster and cheaper way of resolving rent disputes.   We strongly encourage all landlords and tenants unable to reach an agreement on rent to make use of this alternative dispute resolution process.   Cost should never be a barrier to a fair resolution and this new process will mean there is an independent and quick system to resolve a dispute where two parties are unable to agree what the rent should be.”

On behalf of Scottish Land & Estates, Stuart Young of Dunecht Estates said:

“ScottishLand & Estates fully supports this initiative for resolving disputes.  It is an independent, efficient and inexpensive method of dealing with disputes and we would urge any landlord or tenant to consider using it where agreement cannot be reached.”

Warmly welcoming the launch on behalf of RICS Scotland, Andrew Hamilton said:

“We have worked closely with SAAVA on this project and they are to be congratulated on producing such a practical and usable tool. While I believe the Land   Court do an excellent job, I also believe as an arbiter myself that there is a role for an alternative approach such as this simplified and accelerated arbitration procedure.   Both tenants and landlords can now use that without fear of a disagreement over a rent review snowballing into a very expensive dispute”.

 

FREEDOM OF CONTRACT A RECIPE FOR DISASTER

FREEDOM OF CONTRACT A RECIPE FOR DISASTER

FREEDOM OF CONTRACT A RECIPE FOR DISASTER

  The Scottish Tenant Farmers Association has branded landlord plans to deregulate farm tenancies as a recipe for disaster.  Yesterday, ScottishLand and Estates unveiled its future vision for the tenanted sector recommending the introduction of freedom of contract in the letting of new tenancies.

 Condemning the proposals, STFA chairman Christopher Nicholson said: “Yet again SL&E have resurrected the old freedom of contract chestnut in their long-standing attempt to wind back the clock sixty years to the 1948 Act when tenants were granted security of tenure.  Freedom of contract will only work where there is a balance of supply and demand as in the commercial world.  As long as Scotland retains its current concentrated structure of landownership the rented sector will require protective legislation.

 “Furthermore, it is disingenuous to suggest that the introduction of freedom of contract will be of any benefit to new entrants when the reality is that the only beneficiaries will be existing farmers prepared to offer inflated rents for short term arrangements.  New entrants will not have any more of a look-in than they do at present. The advent of Farm Business Tenancies in England has shown that apart from County Council Holdings, opportunities for new entrants are just as limited as in Scotland, with some FBT rents achieving in excess of £200/ac.  In addition the market driven rental process in Scotland would see rents for existing tenants soar severely damaging the viability of many farming businesses.

 “We, in the tenanted sector, have bent over backwards in agreeing to legislative change which landlords have said would encourage more land to be let. Tenancy terms have been made more flexible and fixed equipment rules have been relaxed but still the tenanted sector shrinks with very little land offered for rent.  It is no wonder that the industry shares Mr Lochhead’s frustration.  This latest piece of propaganda by SL&E will convince no one.”