Small landholdings modernisation: consultation analysis

Highlights

Why was the research needed?

Small landholdings are a form of tenanted land located across Scotland, and are an important part of its agricultural and national heritage. There are approximately 59 small landholders in Scotland. Their small landholdings cover 2,168 hectares (5,360 acres), which constitutes 0.1% of Scotland’s total agricultural land area.^[1]

The Scottish Government has outlined a series of proposals to explore how best to modernise and update small landholdings legislation. These proposals relate to four parts of small landholdings legislation: 1. Right to buy; 2. Diversification; 3. Assignation and succession, and; 4. Access to an umbrella body.

This will aim to achieve three broad objectives: to give small landholders equality of opportunity in line with tenant farmers and crofters; to help small landholders to play their part in tackling the climate and biodiversity crises; and to enable small landholdings to play a role in supporting local rural communities and population sustainability.

What did we do?

We carried out a consultation. This was open from 22 October 2022 to 14 January 2023 and received a total of 41 responses, 30 of which were from individuals (73%) and 11 of which were from organisations (27%). Responses were received from individual small landholders, alongside a range of agricultural organisations, including those representing crofters, farmers, agents and landowners. We analysed all of the responses received using robust and systematic methods.

The consultation paper was sent to small landholders and landlords. Officials endeavoured to make personal contact with all small landholders and to ensure that landlords had fair representation. Scottish Government officials also a workshop on the Isle of Arran and organised individual meetings with landlords.

We also contacted all of those who responded to the Land Reform Bill Consultation, who had indicated that they wished to be kept updated in regards to a future Small Landholdings consultation, and provided them with the opportunity to respond.

What did we learn?

Right to buy

• The majority of respondents (73%) agreed that providing small landholders with the absolute right to buy the land under their homes and gardens could give them greater security and allow them to invest into their small landholding and business with confidence.
• The majority of respondents (68%) agreed that this could also be beneficial in reducing rural depopulation for communities with small landholdings in them.
• Over half of respondents (63%) agreed that small landholders should have the opportunity to purchase their small landholding if their landlord gives notice or takes action to transfer the land containing the small landholding for sale or transfer to another company or trust.
• Around half of respondents (49%) agreed that a clawback provision should be introduced to ensure fairness for the landlord, if a small landholder who previously purchased the land under their home, garden or small landholding subsequently sells either of these within a specific timeframe.
• The majority of respondents (73%) agreed that the most appropriate and fair valuation for the right to buy the land under the home and garden should be decided by a valuer appointed in agreement by both the small landholder and their landlord, or failing this, an independently appointed one.
• There was no broad consensus among respondents in terms of how the valuation of the right to buy should be calculated to provide fairness for both the small landholder and their landlord.

Diversification

• The majority of respondents (83%) agreed that small landholders should be able to diversify their activities on their landholdings.
• Over a third of respondents (39%) stated that small landholders should not require their landlord’s permission in advance of diversifying their activities, whilst a slightly lower number said they should.
• Around a third of respondents (35%) did not agree that the small landholder should have to go to the land court if the landlord does not consent to their diversification, whilst just over a quarter (27%) agreed that they should.

Assignation and succession

• Over half of respondents (54%) agreed that the legislation setting out who can be assigned or succeed a small landholding should be updated to have similar succession and assignation rights as tenant farmers with secure 1991 Act tenancies. Almost a quarter (24%) disagreed.
• A number of respondents agreed there was a need for alignment with secure 1991 Act tenancies in this area. However, others felt that this should instead be done in line with crofting regulations on assignation and succession. Several respondents highlighted the need for consistency across all types of agricultural tenancies, to reduce confusion.
• Almost half (41%) of respondents agreed that a landlord should be able to object to the person the small landholder wishes to be assigned the small landholding or to succeed it. Just under a third (29%) disagreed.
• In terms of objection grounds, respondents felt that landlords should consider factors including: character; interest in agriculture; competency, knowledge and qualifications, and; financial capability and sufficient resources.
• Respondents on both sides felt that there should be provisions in place to prevent different interpretations of the criteria (for example, that the successor is of 'good character') and discrimination against specific groups.

Access to an umbrella body

• The majority (88%) of respondents agreed that small landholders and their landlords should have access to a public body, in a similar way that tenant farmers and their landlords have for agricultural tenancies; 4% disagreed.
• Those who agreed gave a number of reasons, including the need for a public body to oversee disputes; and a wider need for consistency and equity.
• Respondents noted the potential benefits of a public body for small landholders, including: access to guidance, protection and support; making legislation more accessible; and improving relations between small landholders and their landlords.
• Several respondents felt that the Scottish Land Commission was an appropriate public body. Others felt it should be the Tenant Farming Commissioner or a crofting organisation such as the Crofting Commission.
• Three quarters of respondents (75%) agreed that if a small landholder and their landlord have a disagreement, the public body should be able to mediate. They gave reasons including fairness, and the benefits of mediation as an option for both tenants and landlords, in terms of it being a less costly and stressful way of reaching a resolution.
• Another set of respondents stated in the interests of neutrality, the public body should encourage and facilitate mediation but not carry it out.

Additional considerations

• Respondents were able to give their views on further potential changes to small landholding legislation to support small landholders and their landlords. They raised a number of issues, including: changes to agricultural tenancy types; support for new entrants; and the role that small landholdings can play in meeting climate and biodiversity goals due to their scale.

Potential costs and burdens

• Over a third (39%) of respondents said they were aware of potential costs and burdens that may arise as a result of the proposals within this consultation paper. Almost a fifth (17%) said they were not and the same number (17%) were unsure.
• The main potential costs identified by respondents were: costs in purchasing the land, for example valuations, mortgage or conveyancing costs; the cost of funding the purchase; legal costs; the wider cost of new legislation and regulations, for example to the public, and; the loss of small landholdings and the opportunities they offer to new entrants and start-ups.

Potential impacts on the environment

• Almost a third (32%) of respondents said they were not aware of any potential impacts, either positive or negative, of the proposals in this consultation paper on the environment. A fifth (20%) said they were.
• Potential positive environmental impacts identified by respondents included: they may speed up the decision-making process for environmental activities; tenants with greater security will invest more into their holdings and be more likely to participate in environmental schemes, and; the environmental benefits of keeping small landholdings occupied, from local food production to sustainable land management.
• Other respondents identified potential negative impacts, largely in terms of the loss of small landholdings and the neglect or mis-use of agricultural land.
• Lastly, several respondents stated that the consultation proposals were not relevant to this topic, and did not address environmental issues.

Potential impacts on young people

• Over a third (37%) of respondents said they were aware of current or future impacts on young people due to the proposals. Around a fifth (17%) were not aware of any impacts. Whilst some felt the proposals would have a positive impact on young people in terms of opportunities for new entrants, others felt they would have a negative impact in this area.
• Almost a third (32%) of respondents thought improvements could be made from a young person’s perspective. Only a small number (5%) said ‘No’.
• Respondents who did feel that improvements could be made focused on several key issues in their answers: the need to simplify the small landholding system; support for new entrants, and the need to broaden access to land and tenancy opportunities within the agricultural sector.

Potential impacts on data privacy

• Around half of respondents (46%) were not aware of any impacts of the proposals on data protection or privacy, and a quarter (24%) were unsure.

Potential impacts on those with protected characteristics

• Around half of respondents (46%) said they were not aware of any examples of how the proposals in this consultation paper may impact those with protected characteristics. 7% said ‘Yes’ and a fifth (20%) were unsure.
• Respondents raised several points: succession, and the positive impacts of widening opportunities in rural areas; the importance of protecting the rights of all small landholders; the potentially negative impacts of a loss of small landholding tenancies on diversity in the agricultural sector and in rural areas.

Potential impacts on groups or areas experiencing socioeconomic disadvantage

• Around a third (32%) of respondents said they were not aware of any examples of how the proposals might have particular impacts on groups or areas experiencing socioeconomic disadvantage. A fifth (20%) said they were aware of potential impacts and a fifth were unsure.
• Respondents noted potential positive impacts including: benefits to rural communities and services; and the benefits to small landholders experiencing socioeconomic disadvantage. One potentially negative impact was the decline of small agricultural tenancies, which could restrict access to rural land for small-scale and local food production.

Potential impacts on island communities

• Almost a third (29%) of respondents were not aware of any examples of any potential differential impact of the proposals on island communities. Around a quarter (24%) were aware of potential impacts and 17% were unsure.
• Respondents identified a number of potential benefits to island communities in terms of: increasing access to employment and housing; bringing in new residents; and small landholders on islands having more control over their future.

What happens now?

This consultation has provided an insight into the views of a range of stakeholders, including small landholders, landlords and agricultural organisations, on the Scottish Government’s proposals to update and modernise small landholdings legislation. The findings outlined in this report will inform our work in this area. All the consultation reponses, where permission has been given, will be published.