Tenant farmers need to plan for their retirement

As farmers and growers move into the post-Brexit era with a plethora of changes on policy direction and support measures, many in the industry have been considering whether the time is right to retire.

Tenant Farming Commissioner Bob McIntosh

And while those who own their farms can have a considerable nest-egg in the form of the value of their land, tenant farmers often struggle to realise enough capital to support their retirement.

Policy makers have recognised that measures are required to allow those in the industry to retire with some dignity and allow new blood into the sector - and proposals have been drawn up to allow tenants to retire with a small lump sum both in Scotland and in England.

But while English policy-makers are considering allowing producers to take an up-front lump sum exit payment based on the expected value of their future support levels, so far Scotland has focused on allowing tenant farmers to key into some of the rise in the value of land which the landlord has enjoyed during his tenure of the farm.

Known as relinquishment when the landlord accepts the offer to buy the tenancy back and assignation for value when it is sold to a ‘developing farmer’, new guidance published recently by Scotland’s Tenant Farming Commissioner (TFC) clarifies some of the information that is needed when a tenant decides to investigate this route.

Urging tenants who are considering giving up a secure tenancy using the new procedures to assemble all the necessary information before they submit a ‘Notice of Intention to Relinquish’, Tenant Farming Commissioner (TFC), Bob McIntosh said:

“Tenants should seek professional advice at the start of the process to ensure that they are taking the right steps and that they have assembled all the necessary information.”

He said there were strict limits set on the time allowed for the TFC to appoint a valuer and for the valuation to be completed:

“These timescales cannot be extended. It is therefore absolutely essential that Notices include all the information that the valuer requires in order to carry out their task”.

“If the information is not complete or not agreed with the landlord, it is unlikely that the valuer will be able to complete the valuation within the timescale allowed in law, and the TFC will have no option other than to reject the Notice,” stated McIntosh.

Meanwhile the English NFU warned against a ‘one size fits all approach to the lump sum exit payment south of the border - and stressed that those thinking of leaving the industry needed enough time and information to make such life changing decisions.

“For tenants there are the added complications to meet with the legal requirements of giving notice to their landlords. Deciding to exit our industry is leaving a job like no other and deeply subjective to that person, which is why any future approach whether it be lump sum or delinking must be sensitive of this fact,” said the NFU vice president, Tom Bradshaw.