'Starter' tenancies call to attract new blood

Published on Monday 3 August 2009 19:32

FOR almost two decades few farms have been let in Scotland on a basis that would provide a degree of security to tenants. The Agricultural Holdings (Scotland) Act of 2003 was designed to address this situation.

Two new forms of tenancy were introduced: one with a minimum duration of 15 years and another with a maximum term of five years.

The legislation was much lauded at the time, but landlords and their agents have been very wary of entering into arrangements that might at some future date give a tenant the absolute right to buy.

However, the Scottish Government announced last year that it has no intention of amending the act. Since 2003, estate agents have devised a series of agreements that avoid any possibility of long-term security.

They had little choice, given the fact that wrong advice could lay them open for considerable compensation as the value of a tenanted farm is in the region of 40 per cent less than the open market rate.

But the tide may be turning with five farms on the Island of Bute advertised for let as well as one near Oban and a substantial unit in the Borders.

Angus McCall, chairman of the Scottish Tenant Farmers' Association, said: "It is significant that all of the farms are livestock units andnot suitable for contract farming arrangements.

"The landowners concerned should look towards the future of farming in the Highlands and Islands, as well as other remote parts of Scotland, and choose new-entrant tenants for these farms rather than looking for the highest rent which, if left to the vagaries of the open market will inevitably come from a neighbouring or an already established farmer.

"Scottish agriculture is desperately in need of new blood, but unless new entrants are given a fair wind, they will never be able to compete for farms on the open market."

However, where an estate is in the hands of a trust, the trustees may well be bound to secure the best available return.

In May 2007 the Scottish Government pledged to make 10 million available for new entrants. The take-up has been modest because potential claimants have been unable to secure land.

A radical rethink is necessary, according to McCall: "The STFA is proposing the creation of a special starter tenancy, which in conjunction with measures included in the Scottish rural development programme will give the new entrants a competitive advantage in bidding for a tenanted farm and which will encourage landlords to let to a new entrant."

The SFTA is exploring this avenue with government officials and hopes to be able to develop this idea with other stakeholder groups over the coming weeks.

There is a view that tenant organisations are constantly at odds with landlords. There may be a few points of difference, but the reality is that they have to work together on a constructive basis.