2021 will bring ‘big decisions’ for farm tenants – TFA
The Tenant Farmers Association’s (TFA’s) national chairman, Mark Coulman, has said that 2021 will be a year for big decisions within the tenanted sector of agriculture.
“After four-and-a-half years of discussion, debate and argument, including a 12-month transition period, the UK will be fully out of the EU.
Farmers in England will have had the chance to digest the Agricultural Transition Plan issued by Defra [Department for Environment, Food and Rural Affairs] at the end of November and farmers in Wales will have taken note of the clear direction of travel set out in the Welsh Agriculture White Paper.
“Now is the time that individual farm businesses will need to decide if the future articulated by these documents is one within which they can see their farm businesses thrive,” said Coulman.
Intertest in BPS
“It is fair to say that in England there has been a significant amount of interest in the Basic Payment Scheme [BPS] lump sum exit proposals, particularly amongst farm tenants who are towards the end of their farming careers and without clear routes for the succession of those businesses beyond their retirement.
Further details about how that scheme will run should be available in the early part of the year and I fully expect a significant number of individuals to see that as a viable option to take when it becomes available in 2022.
“Many other farm businesses, whilst acknowledging the challenges, will also see potential benefits from being able to operate outside the previous framework imposed by the EU.
“However, those businesses will need to adjust to the new environment within which farming will be operating,” added Coulman.
“For the tenanted sector that will mean ensuring that farm rents are brought down to sustainable levels and that tender rents on new agreements are considered cautiously and prudently.”
“The landlord community will also need to adjust to the new norm by offering longer term agreements with sufficient security of tenure,” he said.
This will allow individuals to profit from their own investment and take part in new government initiatives which are likely to be more beneficial where they are entered into on a multi-annual and collaborative basis.
“More than at any other time we need to see a true partnership approach between landlords and tenants.
“Agents for both sides need to be focused on finding mutually beneficial paths forward, rather than looking for opportunities for dispute which has, hitherto, tended to be the default position.
“That said, there is still much work to be done on finalising the details of the new policy frameworks operating in England and Wales.
With transition away from the BPS starting in England at the beginning of 2021, that detail will need to be worked up in real time as things change.
“At least in Wales, we will have more time to consider the necessary detail as significant change is not expected until 2024 at the earliest.
“The TFA in England and Wales will be fully engaged in those discussions with the government, to ensure that the needs and aspirations of the tenanted sector of agriculture are always front and centre in the minds of policymakers,” Coulman concluded.