Survey of the Agricultural Tenant Farmers

EXECUTIVE SUMMARY

Introduction and methodology

A Ministerial led review of the Agricultural Holdings (Scotland) Act 2003 is being carried out by the Agricultural Holdings Legislation Review Group. As part of this review, the Scottish Government commissioned Ipsos MORI to carry out a survey of all tenant farmers in Scotland.

The survey covered the following topics:

• the current level, nature and types of agricultural land tenure arrangements in Scotland
• changes in land tenure since 2000 among existing tenant farmers
• views on the future of the farming sector in Scotland
• relationships of tenant farmers with their landlords
• tenant farmers' views on the Absolute Right to Buy
• tenant farmers' plans for the future of their business.

A total of 3,095 surveys were completed either by post or online. This represents a high overall response rate of 53%. Results were weighted to reflect the distribution of tenant farmers by regional location and type of farm.

Tenant farmers and the land they farm

Almost three quarters of respondents were aged over 50 years, with a third aged over 65 years. Fewer than one in ten were aged less than 40 years.

Half of respondents said that they or their families had farmed their main tenancy for over 50 years, while around a quarter of respondents said that they or their family had been farming on their main tenancy for less than 25 years.

The majority of tenant farming businesses farmed one holding (71%), with 17% farming two holdings and 12% farming three or more. The median hectarage of a business holding was 390 hectares.

Around a quarter of respondents reported that they did not hold any Secure 1991 tenancies, 61% rented-in one Secure 1991 tenancy, with 10% renting-in two or more.

The main reasons that respondents gave in relation to why they rent-in land were "Want to stay on our family farm", followed by "Want to farm but I can't afford to buy" and "Content to stay as I am on a tenanted farm".

Changes in land tenure since 2000

The majority of respondents had been farming on some or all of their main tenancy since at least 2000 (83%), while in 5% of cases a respondent had not been farming on their main tenancy but someone in their family had been.

Ten percent of respondents said that neither they nor someone in their families had been farming on all or some of the land since at least 2000 and therefore were either new entrants to the sector or existing farmers who had moved location.

The most common reasons given by respondents for increasing the hectarage of their business were to increase the production capacity of the business (94%), because of the availability of nearby land (87%) and to help maintain the current financial position of the business (77%).

The biggest challenges faced by those who had increased the hectarage of their business were the supply of land to rent or buy and the cost of land to rent or buy. The main reason given for a decrease to the hectarage of a business was tenancies not being renewed by landlords (39%).

Relations between tenants and landlords

Overall, two-thirds of respondents said that they were either very or fairly satisfied with their current landlord, while 15% said they were dissatisfied.

Those with at least one Secure 1991 tenancy were more likely to be dissatisfied with their landlord than those with no such tenancy. Results suggest that there is a relationship between length of tenure on a tenancy and the extent to which respondents are positive or negative about their relationship with their landlord. The longer that a main tenancy has been held, the more likely it is that the tenant will hold a negative view on certain aspects of their relationship with their landlord.

Future plans and challenges

The majority of respondents (56%) said that they expect their business to be the same size in five years as it is now, with 22% planning that their business would be larger than now and 4% planning for their business to get smaller.

Respondents who planned to increase the hectarage of their business thought the biggest challenge to do so would be the supply of land to buy or rent or the cost of land to buy or rent.

Respondents who own land that they do not rent-out were asked if they would consider doing so in the future. Over a third (37%) gave a response, suggesting that they own farmland that they don't currently rent out. Of these, over two-thirds said that they would not consider renting it out in the future. Overall, around 12% of respondents owned farmland which they don't rent out but would consider renting out in the future. The preferred types of lease arrangements to rent-out land were grass lets and contract farming.

In terms of planning for their future, almost three quarters of respondents said that they had an eligible successor in place and of this group two thirds said that their successor was willing to take on all of their tenancy or tenancies. However, while the majority of respondents have eligible successors and are making pension provision for the future, half of the respondents do not expect to retire until they are over the age of 65.

The Absolute Right to Buy

Almost a half of respondents (46%) said that all tenant farmers with a traditional Secure 1991 tenancy should be offered the ARtB, and a further 26% said that certain categories of tenant farmers with such a tenancy should have the offer of the ARtB. However, 29% said that no tenant farmer should be offered the ARtB.

One-third of respondents said that they would definitely like to buy their tenancy, in principle, if the ARtB were introduced, while a similar proportion said that they would possibly like to buy their tenancy.

Almost two thirds of respondents felt that if the ARtB were introduced that the land should be valued at the sitting tenant value, while 12% said that vacant possession value should be used, and 7% that it should be valued at investment value. Overall, 68% of respondents said that they were confident they could afford to buy their tenancy if it were sold at sitting tenant value, while 20% were not confident.

Views on farming in Scotland

The biggest challenges and issues faced by tenant farmers were found to be based around the availability of land to rent, agricultural holdings legislation, encouraging new entrants, and passing on tenanted farms to family members.

The most important factor in relation to the shaping of a good agricultural tenancy system was thought to be 'Good business relationships between tenant farmers and landlords', rated as important by 93% of respondents. The assurance of security of tenure for at least ten years was thought to be the most important aspect of this relationship (89%).