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The vital importance of tenancies to agriculture.

Byline: NFU Cymru president John Davies

Athriving tenanted sector is vital for a vibrant and sustainable farming industry in Wales. While a range of routes into farming exist, such as joint venture, share farming and contract farming models, access to land through a Farm Business Tenancy (FBT) remains a key route for many new entrants and young farmers to the industry.

The tenanted sector provides a crucial rung on the traditional "farming ladder", offering opportunities for the next generation of agricultural entrepreneurs. In Wales, around a third of agricultural land is rented through both formal and informal agreements. Farming is a long-term business and tenants need confidence and security to make investments for the long term, yet the average length of FBT is around four years, increasing to an average of nine years for larger and better-equipped holdings such as those with a house and buildings.

In recent weeks, the Welsh Government has launched a consultation on tenancy issues. This consultation seeks views on reforming and modernising agricultural tenancy regulations, with the aim of providing an enabling environment for sustainable productivity improvements and investment; facilitating structural change and supporting new entrants and the next generation; and enabling tenant farmers to access new agricultural and landmanagement schemes.

Proposals for reform focus on specific changes to tenancy law (both the 1986 Agricultural Holdings Act and the 1995 Agricultural Tenancies Act) to facilitate structural change, as well as proposals to facilitate productivity, investment and environmental improvements. Tenancy reform needs to allow both landlords and tenants to make investments in their holdings, which can help drive greater productivity for the tenanted sector.

It is also vital that reforms take account of the move away from the Common Agriculture Policy (CAP) as a new agriculture policy is developed and introduced in Wales. Equal access for farmers who do not own the land they farm to the schemes that will replace the CAP is a fundamental priority for NFU Cymru.

We are clear that future support must be targeted at the active farmer - the person who takes the financial risks associated with food production.

During the Brexit and Our Land consultation last autumn, NFU Cymru expressed concerns for the future of farmers who do not own the land they farm and their ability to access support through the proposed Economic Resilience and Public Goods schemes.

With the proposed phasing-out of direct support by the Welsh Government, the public goods approach is likely to represent a significant income stream for farmers in future. At the heart of proposals, the fundamental question remains of who will receive the payment for the delivery of public goods in future - the person who owns the land or the person who farms the land (where they are different)? The fact that long-term interventions and contracts are needed to deliver public goods outcomes and how these can be achieved in the context of short-term tenancies is an issue that will need to be resolved.

The extent to which public goods delivery is reliant upon and directly linked to agricultural activity also remains far from clear at this stage. There are also concerns that specific tenancy agreements may prevent participation in public goods delivery as specified in the consultation, as some aspects may not be deemed agricultural activity.

Whether Welsh Government tenancy reform proposals can realistically address concerns that tenant farmers will have over future access to schemes in the time-frame proposed by the Welsh Government will be the subject of intense scrutiny in the coming weeks.

As during the Brexit and Our Land consultation, NFU Cymru plans to hold tenant-specific meetings during the consultation period.

Overall, NFU Cymru is clear that future policy must recognise that tenant farming delivers the same economic, environmental, social and cultural outcomes for society that farming on owner-occupied holding and other land tenure does.

The position of this vitally important sector must not be disadvantaged through tenancy reform or changes to agricultural policy moving forward.


<B Parc Farm, a tenancy on Great Orme in north Wales
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Publication:Western Mail (Cardiff, Wales)
Geographic Code:4EUUK
Date:Apr 23, 2019
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