May 4 2017
STFA WELCOMES TENANT FARMING COMMISSIONER’S CALLS TO TAKE ACCOUNT OF BREXIT IN RENT REVIEWS
Scottish Tenant Farmers Association
News Release
2nd May 2017
STFA welcomes Tenant Farming Commissioner’s calls to take account of Brexit in rent reviews
The Scottish Tenant Farmers Association has welcomed the Tenant farming Commissioner, Bob McIntosh’s call to landlords and tenants to consider the impact of reviewing farm rents rent until the implications of Brexit are clearer. STFA has already warned its members to take account of the Brexit factor in rent negotiations and has reminded all those engaged in rent reviews that, although farm commodity prices have improved in the short term, following the EU Referendum result, the real challenges lie ahead. The rent review period is 3 years, so rents set in 2017 cannot be reviewed until 2020, by which time the UK may have left the EU and the Single Market if Article 50 is triggered as planned in 2017.
Commenting on the intervention, STFA Chairman Christopher Nicholson said: “The TFC’s call to think again about rent reviews is a commonsense suggestion and a sign of the gravity of the situation. Previous calls for a rental standstill from STFA have been rejected by landlords and their agents, however the TFC has no axe to grind save a desire to see fair play and this move must be taken seriously by all parties.
“The agricultural industry faces huge uncertainty as we contemplate leaving the EU and there is little sign that the UK government has any idea how we will cope with the loss of export markets and the potential imposition trading tariffs on top of much reduced support payments. Farm Business Incomes seem to be in freefall with a 48% fall in 2015/6 representing a 75% decrease in real terms in farm incomes since 2010/11. In these circumstances there can be no justification for any increase in farm rents.
“Good practice codes have been encouraging rent negotiations to take place in good time before the term date, consequently, STFA would also call upon any landlords and tenants who have already agreed an increase in rent for this May to shelve the new rent in line with the TFC’s statement.
“The agricultural industry faces hard times and landlords should be prepared to take this into account and not expect short term gain from rent increases at the risk of jeopardizing the viability of their tenants’ farming businesses. After all, if some of the dire predictions for agriculture materialise, landlords may be grateful to have tenants to farm the land and pay them any rent at all.”