Survey of the Agricultural Tenant Farmers

7 VIEWS ON FARMING IN SCOTLAND

Summary

1. Issues around the availability of land to rent, encouraging new entrants, and passing on tenanted farms to family members were identified as particular challenges to the sector and areas where action should be taken.

2. Uncertainty over the future of agricultural holdings legislation was seen as a particular challenge (by 84% of respondents).

3. Good business relationships between tenants and landlords was identified as the most important factor in shaping what a good agricultural tenancy system would look like.

7.1 Respondents were presented with a series of attitude statements covering three topics:

• general views on the current state of the farming sector in Scotland
• the current challenges facing the tenant farming sector
• factors which would shape a good agricultural tenancy system.

Views on the tenant farming sector in Scotland

7.2 Of the eight statements asking about the current state of the tenant farming sector, three were about the availability of land to rent and entry into tenant farming (see Figure 7.1 below). Three-quarters (74%) of respondents agreed (29% strongly agreed) that the farming industry struggles to attract new entrants, while 18% disagreed. Respondents whose family have farmed their tenancy for 175 years or more (82%) were more likely than overall to agree.

Figure 7.1: Views on current availability of tenanted agricultural land
Q. Thinking of farming in Scotland, to what extent do you agree or disagree with each of the following statements?

Base: All who gave an opinion on each statement (2,912; 2,895; 2,896)
Source: Ipsos MORI

7.3 Furthermore, two-thirds (66%) agreed (19% strongly) that the number of tenancies should be increased in Scotland in the future, while 15% disagreed.

7.4 Two-thirds of respondents (65%) also agreed (19% strongly) that measures should be put in place to increase the area of let land in Scotland, while 16% disagreed.

''We need to encourage new generations to join farming in Scotland to ensure quality of product and quality of care for the land and livestock."

7.5 Those dissatisfied with their landlord and respondents on large livestock farms were more likely to agree that such measures should be put in place. (76% and 73% respectively compared to 65% overall).

7.6 Responses to these statements did not differ depending on whether the respondent owned land and would/would not consider renting it out.

7.7 The remaining five statements are shown in Figure 7.2 below:

• Two-thirds (66%) of respondents agreed that renting requires less capital and gives businesses more flexibility, while 21% disagreed
• Sixty-four per cent agreed (22% strongly) that the current tax regime does not encourage a vibrant agricultural sector, while 13% disagreed
• 53% agreed that contract farming will be a useful part of the industry for a long time, while 21% disagreed.

Figure 7.2: Views on aspects of the current structure of the sector
Q. Thinking of farming in Scotland, to what extent do you agree or disagree with each of the following statements?

Base: All who gave an opinion on each statement (2,892; 2,888; 2,880; 2,897; 2,897)
Source: Ipsos MORI

7.8 Opinion was more divided over whether it is important for farm businesses to own land and if farmers are able to make an adequate living from agriculture:

• Half (50%) agreed and 39% disagreed over whether it is important for farm businesses to own land
• Half (48%) disagreed and 43% agreed that farmers are able to make an adequate living from agriculture.

Challenges facing the farming sector in Scotland

7.9 Respondents were presented with a series of attitudinal statements concerning different types of challenges for the tenant farming sector in Scotland, as shown in Figure 7.3.

Figure 7.3: Issues facing the tenant farming sector
Q. Thinking about the challenges facing the tenant farming sector at the moment, to what extent do you agree or disagree with each of the following statements?

Base: All who gave an opinion on each statement (2,914; 2,906; 2,910; 2,893; 2,840; 2,889; 2,871; 2,852)
Source: Ipsos MORI

7.10 While 87% agreed (and 6% disagreed) that it is important that tenant farmers can pass on a viable business to a family member, views were more mixed on assignation and succession:

• 66% agreed that 'There are too many restrictions on succession to secure tenancies', while 15% disagreed
• 53% disagreed that 'It is currently easy to assign tenancies', while 19% agreed.

7.11 Availability of land to rent and rent levels were also acknowledged as challenges by the majority of respondents:

• 83% of respondents agreed that 'There is a lack of available land to rent', while only 6% disagreed
• 62% disagreed that 'Current rent levels encourage new entrants', while 17% agreed.

7.12 The remaining statements were concerned with broader aspects of the current tenant farming system:

• 84% agreed that 'Uncertainty around the future of agricultural holdings legislation is detrimental to farming'; only 3% disagreed
• Three-quarters (77%) agreed that 'Landlords and tenants should have more freedom to develop business contracts to progress new business interests', while 7% disagreed
• 69% of respondents agreed that 'It is difficult to invest on tenanted farms', while 18% disagreed.

Factors shaping a good agricultural tenancy system

7.13 Respondents were presented with a number of factors and asked to rate how important or unimportant they felt each one was in relation to what a good agricultural tenancy system would mean to them.

7.14 Perhaps unsurprisingly, 'Good business relationships between tenant farmers and landlords', was rated as important by 93% of respondents (with 67% rating it as very important) (Figure 7.4).

Figure 7.4: Importance of issues around contractual arrangements
Q. Thinking about what a good agricultural tenancy system would mean to you,how important or unimportant are: 'Good business relationships between tenant farmers and landlords'?

Base: All respondents who gave an answer (2,894)
Source: Ipsos MORI

7.15 Four statements concerned specific aspects of the contractual relationship between tenants and landlords, and are shown in Figure 7.5. Security of tenure for at least ten years was said to be important by 89% of respondents, including 65% who thought that it was very important. Only 4% overall thought that this was either not very or not at all important.

Figure 7.5: Importance of issues around contractual arrangements
Q. Thinking about what a good agricultural tenancy system would mean to you, how important or unimportant are the following features?

Base: All who gave an opinion on each statement (2,904; 2,884; 2,875; 2,843)
Source: Ipsos MORI

7.16 Easy access to an independent arbiter or dispute resolution measures was viewed as very important by half (50%) of respondents and as fairly important by a further 36%; again, only 4% saw this as not important. Respondents most likely to think that this is very important were those dissatisfied with their landlord (72%) and those who would definitely like to buy their tenancy (65%).

"The present system to settle rents through the land court is very expensive and most tenants will never go to land court so may have to pay rent more than they can afford. A better system of arbitration is needed that is far cheaper to both sides."

7.17 Three-quarters (76%) of respondents were of the view that the ability to assign a tenancy to a new tenant, with the new tenant paying the outgoing tenant for any improvements they have made, was important (42% rated it as very important); 11% felt that this was not important.

7.18 In contrast, only half of respondents (50%) said that flexible contracts between tenants and landlords as equal partners, was an important factor, while a quarter (26%) thought that this was not important.

7.19 Three factors concerning rent reviews and rent increases were asked about and opinion was divided on these, as shown in Figure 7.6 below. A regular, independently-carried out, binding rent review was seen as important by 62% of respondents, and not important by 20%.

7.20 Fifty-five per cent said that rent agreed at the start of a tenancy that increases annually by inflation rather than by open negotiation was important, with a quarter (25%) saying that this was not important.

7.21 Opinion was most divided over whether the current rent review system is continued, with 41% saying that this is important, 31% not important, and 28% saying that they don't know. Respondents who are satisfied with their landlord (49%), and those who would definitely not like to buy their tenancy (48%), and respondents in the North East region (48%) were more likely than overall to view this as important. An illustration of respondent's views are given below.

"Tenant farming is open to however the landlord chooses to do his rent reviews, whether decent or brutal, this person can make the tenant farmers' life exceptionally stressful."

"Rent reviews for tenants should be carried out by independent arbiters who are not estate agents."

Figure 7.6: Importance of issues around rent review
Q. Thinking about what a good agricultural tenancy system would mean to you, how important or unimportant are the following features?

Base: All who gave an opinion on each statement (2,871; 2,881; 2,848)
Source: Ipsos MORI

7.22 Finally, respondents were asked about tax and subsidy measures. As shown in Figure 7.7, 79% of respondents thought that tax or subsidy measures that encourage landlords to release land for letting was important, with 45% saying that this was very important and 8% that it was not important. Respondents with arable farms (88%) and those with two or more landlords for leases of more than one year (87%) were more likely than overall (79%) to say that this was important. Those dissatisfied with their landlord (15%) and respondents who would definitely not like to buy their tenancy (12%) were more likely than overall to feel that this was not important.

Figure 7.7: Importance of tax or subsidy measures to encourage letting land
Q. Thinking about what a good agricultural tenancy system would mean to you, how important or unimportant are: 'Tax or subsidy measures that encourage landlords to release land for letting'?

Base: All respondents who gave an answer (2,882)
Source: Ipsos MORI

7.23 Two comments relating to new entrants are provided below.

"It is very important that farming has a vibrant and forward-looking approach. Young entrants by their very nature are generally vibrant and positive, which is a good job as they will still have to be focussed and determined to succeed in this very important industry. I don't think there are any easy answers with regards to ARtB. and succession in general. The overall hurdle is still generating sufficient income for investment, ongoing security and personal financial security."

"I have been farming on this holding for 9 years with no SFP or CFASS support and feel the whole system of new entrants and so called slipper farming is totally wrong and gives no incentive for young people to actively farm."