Comment: Tenancy divide helping no-one

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THIS past week has been marked by a fair amount of sniping between the Scottish Tenant Farmers Association (STFA) and Scottish Land & Estates.

As an agricultural journalist, this trench warfare is grist to the mill and should be welcomed by myself and my reporting colleagues – but I find the depth of current divide worrying.

The week started with an argument over the effect ever-rising land prices had, with the tenants viewing this as a method of railroading them towards higher rents, while those owning and letting land claimed rents were pitched at a level reflecting farm productivity.

Then, in another salvo, the STFA blasted away at the disruption its members face in their everyday farming operations through the actions of those who held the rights to shooting over their farms.

In response, the landlords claimed their members knew about the demands of farming and they could balance these with the requirements of their country sports clients.

All of this covers the suspicion that appears to exist between the two sides.

In some ways, this form of warfare resembles a First World War battlefield, with both sides in deep trenches and, instead of lobbing deadly artillery towards the enemy, they send verbal volleys.

Taking the analogy further, both sides are led by battle-hardened leaders scarred with memories of earlier conflicts; these helping to fuel the flames of dislike.

And, in a final link with a military conflict as far as I am concerned, one side has the support of a band of activists who want to overthrow the current system of land ownership. Although having no direct financial involvement in the dispute, this group has ideological reasons for wanting change to the system.

Short of a major upheaval, which frankly I do not see happening, there can be no quick, big or easy solution as the tenancy system of farming in Scotland is deep rooted.

What there can be – and must be – are changes to the agricultural holdings legislation. This was promised at the Highland Show by Richard Lochhead, cabinet secretary for rural affairs and environment, with work to start on a review this autumn.

The announcement of this review was somewhat hi-jacked by his inclusion of tenants having an absolute right to buy their rented farms. I suspected at that time, this was a sop to some of his backbenchers and possibly one or two of the reform activists, and I still think this is the case.

The bigger challenge for Lochhead is to make the changes necessary to the current laws to remove many of the niggles between the two sides.

One helpful contribution to any future debate on tenancies came from Donald MacRae, formerly head of business with the TSB but now with the Bank of Scotland.

In his TSB days, MacRae used to carry out a farming survey into attitudes and investment plans by those in the industry. These were highly valued by the press as they provided an insight into the economic health of Scottish agriculture.

However, that survey seems to have been axed but we are still left with his quarterly economic report and, in the latest edition, he has cast his analytical mind over the facts and figures relating to farm tenancies. Those sceptical of a banker making judgments on a complex agricultural system should note that MacRae’s farming roots are deep.

Arrive early at one of his press briefings and in the pre-meeting chit-chat you will not get the latest thinking on quantitative easing or the strength or weakness of the euro, although that would be entirely within his grasp. You would more likely get his take on this year’s harvest as he saw it from the seat of the combine on the family farm or, out of harvest season, a comment on the workings of some old tractor.

Not unexpectedly, his survey of tenancies shows the gradual decline in the number of these. Something that will continue regardless of any tinkering with the legislation.

About one quarter of all the farmland in Scotland is now tenanted. MacRae points out this was 40 per cent as recently as 1982. What he does not mention is that it was above 90 per cent just before the First World War, before death duties from the conflict caused the break-up of many old estates.

However, perhaps the most significant point from the survey is that nationally there was no increase in rent paid between 1998 and 2008, thus, with inflation taken into account, a reduction in real terms.

It is little wonder that in the three subsequent years to 2011, rents moved up by an average of 15 per cent.

Oh dear, I suppose that will set off another salvo of verbal grapeshot.