Shropshire Farming Talk: The Rock Review on Agricultural Tenancies

The Rock Review looked at two main areas relating to agricultural tenancies.

The first was how the new government financial schemes should be accessible, open, and flexible to tenant farmers. The second was longer term changes that would ensure a robust, vibrant, and thriving agricultural tenanted sector for the future. The proposals and recommendations aim to ensure tenant farmers can exercise their rights.

The Review set out over 70 recommendations. The government published their response in May.

Key points were: 1. Taxation - The Review recommended a number of taxation changes, including clarity on the taxation on environmental matters and the limitation of full Agricultural Property Relief (Inheritance Tax) to lettings granted for eight years or more. These UK-wide topics are currently the subject of a consultation.

2. Legislative Change - DEFRA have said they will wait for evidence as to how the let sector operates as it moves through the agricultural transition.

3. Encouraging Longer-Term Tenancies - DEFRA recognises that longer tenancies can provide the security that many tenants need to invest and grow their business and, in some cases, to deliver environmental goals. Also, that short term tenancies may also be more appropriate for some new entrants looking to rent land to gain experience without committing to long term risks.

4. Guidance and Codes of Practice - DEFRA accepts the recommendation that an industry-led Code of Practice be developed to set out standards of expected behaviour for all parties in the sector. This is to be led by the RICS.

5. Tenants and Environmental Land Management Schemes - The Government agree that tenant farmers should be able to access farming offers. The Sustainable Farming Incentive (SFI) does not require the landlord’s consent in the application while the duration of its commitments can accommodate all but the shortest tenancies.

6. Diversification in Farm Business Tenancies - DEFRA is to work with the Farm Tenancy Forum to examine how to encourage tenants, landlords and land agents to make wider use of the flexibility to agree diversifications as part of FBT Agreements.

7. Private Environmental Markets - The government agreed that a clear roadmap is needed to support the orderly development of private ecosystem markets and that tenants, along with other farmers and land managers, should be rewarded and not disadvantaged for their work in maintaining and improving natural capital assets and managing the associated flow of ecosystem services.

To further support the sector to engage in nature markets, Defra has asked the Green Finance Institute to work with the finance and farming sectors to explore how private sector sources of finance can be more swiftly unlocked at scale to support the farming transition, including how to resolve the specific barriers faced by tenants.

by Matt Anwyl, Berrys