Tenant farmers urged to push for rent cuts this autumn

Tenant farmers are being urged to use this autumn’s rent-review window to press for reductions as farm margins come under mounting pressure.

The Tenant Farmers Association (TFA) said those with rent-review notices already in place should use the opportunity to build a properly evidenced case for a lower rent, while farmers without a live review are being encouraged to consider serving notice for the year ahead.

The call comes as farming businesses face a combination of weak yields, drought, livestock disease and high input costs. Dry conditions have reduced grass and fodder availability, increased pressure on water supplies and raised concerns over winter feed, while bluetongue is adding further losses and expense.

Volatile fertiliser, energy and other input costs are also continuing to squeeze margins, adding to pressure on farm profitability.

TFA chief executive George Dunn said: “If tenant farmers cannot make the case for a rent reduction in circumstances such as these, I would ask when they ever will.”

He said successive poor seasons and a persistently high cost base had damaged the earning capacity of many farm businesses, while rent remained one of the largest fixed costs carried by tenant farmers.

The TFA said landlords and agents should take those financial pressures into account when reviewing agreements and be prepared to consider reductions where the evidence supports them.

A key point for tenants is that a rent-review notice served by a landlord does not automatically mean the rent should rise. Dunn said: “A landlord’s notice is not a notice for an increase, it’s a notice for a review.”

The TFA said tenants can use notices served by landlords last year to argue for a reduction where the evidence supports it. Those without a live notice should consider whether to serve one now so they have the option of pursuing a review next year.

The association said current pressures may not prove to be a one-off, making it important for tenants to plan ahead.

The TFA is also warning farmers to take a cautious approach when bidding for land under new tenancy agreements. It said some businesses continue to offer rents above what the land can realistically earn, despite the difficult trading conditions facing the sector.

Dunn warned that this can affect more than the individual tenancy because agreed rents may later be used as comparable evidence in Farm Business Tenancy reviews.

“Individuals taking land at rent levels far beyond its realistic earning capacity do the whole sector a disservice,” he said.

Where landlords and tenants cannot agree a new rent, the TFA said professional advice should be sought on whether the dispute should be referred to an arbitrator or handled through another process set out in the tenancy agreement.

The association also urged arbitrators and experts to take account of the exceptional pressures facing agriculture and avoid pushing rents higher based on theoretical assessments or limited comparable evidence.

Dunn said landlords should be prepared to consider reductions in difficult years just as they may seek increases when conditions improve.

He added: “Seeking a sensible rent reduction is not an act of hostility towards a landlord. It is prudent business management.”