Scottish Tenant Farmers

News Release

1st September 2015


he Scottish Tenant Farmers Association has welcomed the news last week that the Scottish Government has accepted legal opinion commissioned by STFA and now no longer intends to impose the 50% siphon on single farm payments when a tenancy is transferred by assignation or succession to a new tenant.

Article 34 of the EU regulations provides Member states with the option to siphon part of the BPS entitlements into the National Reserve. In an attempt to discourage trading of entitlements and slipper farming, the Scottish Government elected to apply a 50% siphon to entitlements transferred without land.

Until challenged by STFA, the Scottish Government had intended to treat the transfer of an agricultural lease as a “transfer without land” and therefore liable to trigger the 50% siphon. It has now been recognised that legally, a tenant occupying land under an agricultural lease holds an interest in the land and so, transferring that interest counts as a transfer of land and should not therefore be subject to a siphon.

Commenting on the result STFA chairman Christopher Nicholson said: “The Scottish Government’s interpretation of the rules, which only came to light by chance, could have been devastating to many tenants who have just, or who are about to pass their tenancies on to the next generation. Fortunately this mistake has been spotted in time and can now be corrected so tenants who have recently taken over a family tenancy can be reassured that they will not lose half of their single farm payment.

“We are surprised that government officials interpreted the regulations in such a narrow way without considering possible unintended consequences and how they could be avoided. Without STFA’s intervention we would have been in the ludicrous position, where government policy was encouraging wider family succession to tenancies with one hand and clawing back single farm payments with the other. This must call into question the interpretation of other seemingly nonsensical regulations which could bear further scrutiny. Government officialdom doesn’t always get it right!”

Agriculture law expert Hamish Lean from Stronachs LLP also said; “It was very satisfying to have helped the STFA achieve this victory for common sense in the interpretation of the Basic Payment Rules. It’s also an object lesson in not taking Scottish Government guidelines at face value. It is always the underlying European Regulations which set out the law and which must be referred to for the definitive answer.”