Agricultural holdings review opens door to change
The Union has called for new legal standards, robust industry codes, improved tax incentives, and low-cost dispute resolution systems. It also believes the proposed adjudicator would act as an intervention vehicle where parties – whether landlord ort tenant - fail to deliver basic standards of operation.
NFU Scotland was replying to the Cabinet Secretary-led Agricultural Holdings Review Group’s call for evidence on agricultural tenancies. NFU Scotland President, Nigel Miller; Chief Executive Scott Walker and Policy Manager Gemma Thomson will give oral evidence to the group this Friday (18 April).
The Union’s Legal and Technical committee; Tenants Working Group and New Generation Group were key contributors to the submission. In addition, NFUS held nine regional meetings in recent weeks involving tenants, landowners and owner occupiers to help with evidence-gathering.
President Nigel Miller said: “A healthy and vibrant tenanted sector is vital for the future of Scottish agriculture. It underpins many established farming businesses that are the core of food production and communities the length and breadth of Scotland.
“Importantly, it also ensures that there are opportunities for those entering farming who do not own land, and can serve as a vital bolt on for existing farming businesses as they develop.
“The present review process is an opportunity to deliver significant change and a new collaborative approach. Tenure and arrangements must support and encourage investment by either party, and establish systems which see all parties share risk and reward.
“Having spent considerable time meeting many members – tenants, landlords, owner-occupiers and new entrants – it is clear that delivering positive outcomes for the tenanted sector needs a wide ranging complementary package of legal standards, industry codes, tax incentives, dispute resolution systems, and an intervention vehicle where parties fail to deliver basic standards of operation.
“In the first instance, the industry requires a robust set of codes which govern how it operates and the practices of professionals involved in it. In addition, changes to Section 13 within the current legislation could rebalance the basis of rent determination and ease some of the areas of friction within the industry. Amendments to legislation addressing issues at waygo could also go some considerable way towards achieving this. As could a new form of assignation to open up opportunities for new and developing farmers.
“We believe that a low-cost dispute resolution is required and there must also be an ability to intervene when systems fail.
“That is why we are promoting the creation of an Independent Adjudicator. Working alongside an alternative dispute resolution process, where expert determination is the preferred option, the adjudicator would monitor and encourage best practice in the tenanted sector. Crucially, it would deal with those who repeatedly fail – the ultimate sanction for failure for landlords being compulsory purchase or, if a tenant, notice to quit.
“The Cabinet Secretary-led review specifically called on respondents to examine an absolute right to buy for traditional secure 1991 agricultural tenancies, and what that would mean for land ownership and the wider economy of Scotland.
“In speaking to members, it is clear that long term personal relationships are the backbone of a successful tenanted sector and, in some parts, the relationship between landlords, tenants and third-parties involved in management and rent negotiations are fractured. Where relationships are broken, the introduction of the absolute right to buy or other forms of radical intervention are high on the agenda for tenants who feel that this offers an escape route from what they perceive to be a dysfunctional system.
“As a tool to resolve failures, absolute right to buy may be an answer to some but it has wider, significant ramifications for agriculture. Others, including many secure tenants and our New Generation, believe that the debate around an absolute right to buy can only serve to close down opportunities to access land, and stifle the development of long term letting arrangements which the Scottish farming industry badly requires for its future.
"On balance, NFUS opposes the introduction of ARTB but strongly believes a more targeted approach, built around robust codes and an Independent Adjudicator can close down chronic problems and presents a strong, positive way forward to rebuild our tenanted sector.”
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