Survey of the Views of Owner Occupier Farmers on Current Issues for Tenant Farming

5 FUTURE OF OWNER OCCUPIERS' LAND AND THE FARMING SECTOR

Summary

1. Four out of five respondents said that it was unlikely that they would rent-out any agricultural land in the future. However, one in ten respondents said that they would be likely to rent-out land in the future.

2. The types of arrangements that respondents were more likely to use to rent out land in the future were seasonal lets and informal agreements with neighbours (35% and 29% respectively). Five per cent of respondents said that it was likely they would use secure tenancies.

3. Financial incentives for renting-out land, less bureaucracy and more rights for landowners would encourage respondents to rent-out land in the future.

4. Uncertainty of the future of agricultural holdings legislation and a lack of freedom for landlords and tenants to develop business contracts were viewed as particular challenges facing the farming sector.

Owner Occupier Farmers' views on renting out agricultural land

5.1 As shown in Figure 5.1, most respondents (80%) said that it was unlikely that they would rent-out any agricultural land in the future, with 46% saying that it was not at all likely. However, one in ten respondents (10%) said that it was likely that they would rent-out land in the future, with 2% saying this was very likely.

Figure 5.1: Likelihood to rent out land in the future

Q. How Likely, if at all, would you be to rent-out land in the future?

5.2 Respondents were asked what types of arrangement they would be likely to use if they were to rent-out agricultural land in the future. Sixty three per cent of respondents said that it was not likely that they would use secure tenancies, with half saying that it was not at all likely (49%). Five per cent of respondents said that it was likely that they would use secure tenancies, with 3% saying it was very likely.^[13]

5.3 Seasonal lets (including grass lets, cropping lets, potato and vegetable lets) and informal agreements with neighbours were the most likely types of arrangement that respondents would use to rent-out land, with 34% and 29% respectively saying they would use these arrangements. Smaller proportions, around one in ten in each case, were likely to use the remaining types of arrangements commercial leasing, short limited duration and limited duration tenancies, share farming or contract farming(see Figure 5.2).

Figure 5.2: Likely arrangements for renting-out land in the future

Q. How likely, if at all, would you be to use the following types of arrangements to rent-out land in the future?

5.4 Respondents were presented with a number of statements about reasons for not renting-out land at present. Several of the main reasons that respondents agreed with were concerned with a desire to keep the land within the business/family. For example, 76% said they needed all their land for their own business, 66% said they wanted to pass the land on to a family member and 59% said it was more profitable for their business to work the land themselves (Figure 5.3).

Figure 5.3: Reasons for not renting-out land

Q. To what extent do you agree or disagree with each of the following statements on why you don't rent-out agricultural land?

5.5 Sixty one per cent of respondents who provided an answer agreed that uncertainty around future legislative change was a reason why they did not rent-out agricultural land, with 25% strongly agreeing.

5.6 When asked what would make them more likely to rent-out agricultural land in the future, similar proportions of respondents said that financial incentives, less bureaucracy and more rights for landowners would make them more likely to rent out land (43%, 42% and 42% respectively). Thirty four per cent of respondents who answered said that being certain ARtB would not be introduced would make them more likely to rent-out land (Figure 5.4).

5.7 Almost a third said that freedom of contract and shorter contract terms would encourage them to rent out land (31% and 28% respectively).

5.8 A small majority of respondents who said that no tenant farmers should be offered the ARtB said that 'Being certain that ARtB will not be brought in' would make them more likely to rent-out agricultural land in the future (52% compared to 34% overall).

Figure 5.4: Factors which may encourage renting-out agricultural land

Q. Which of the following would make you more likely to rent-out agricultural land in the future?

Challenges facing the tenant farming sector in Scotland

5.9 Respondents were presented with a series of attitudinal statements concerning the different types of challenges facing the tenant farming sector in Scotland (Figure 5.5).

Figure 5.5: Issues facing the tenant farming sector

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

5.10 Overall, 66% of respondents agreed with the statement that 'Uncertainty around the future of agricultural holdings legislation is detrimental to farming', with 22% strongly agreeing. Nobody disagreed with this statement and 33% did not know^[14].

5.11 Fifty eight per cent of respondents agreed that 'Landlords and tenants should have more freedom to develop business contracts to progress new business interests', while only 4% disagreed. A half agreed that 'There is a lack of available land to rent' (51%). Less than half said that 'It is difficult to invest on tenanted farms' (44%), while only 11% agreed that 'Current rent levels encourage new entrants' (26% disagreed).

5.12 In terms of passing tenant farming businesses on to successive generations, 52% agreed that 'It is important that tenant farmers can pass on a viable business to a family member', 40% agreed that 'There are too many restrictions on succession to secure tenancies', while only 14% agreed that 'It is currently easy to assign tenancies' (24% disagreed).

5.13 Respondents who said that no tenant farmers should be offered the ARtB were more likely to disagree than agree that 'It is important that tenant farmers can pass on a viable business to a family member' (26% compared to 11% overall) and that 'It is difficult to invest on tenanted farms' (22% compared to 10% overall).

Views on farming in Scotland

5.14 Respondents were presented with eight statements about the future of the farming sector in Scotland. Three of these statements were related to the availability of land to rent and entry into the farming sector (see Figure 5.6).

Figure 5.6: Views on current availability of tenanted agricultural land

Q. Thinking about farming in Scotland, to what extent do you agree or disagree with each of the following statements?

5.15 Seventy one per cent agreed with the statement 'The industry struggles to attract new entrants' (24% strongly agreed). Opinion was more mixed over the remaining two statements. Thirty three per cent of respondents agreed and 29% disagreed that 'The number of tenancies should be increased in Scotland in the future', while 31% agreed and 34% disagreed that 'Measures should be put in place to increase the area of let land in Scotland'.

5.16 The remaining five statements are shown in Figure 5.7.

Figure 5.7: Views on aspects of the current structure of the farming sector

Q. Thinking of farming in Scotland, to what extent do you agree or disagree with each of the following statements?

5.17 The majority of respondents agreed that 'It is important for farm businesses to own land' (65%, with 21% strongly agreeing). Half of respondents agreed that 'Contract farming will be a useful part of the industry for a long time', 'The current tax regime does not encourage a vibrant agricultural sector' and that 'Renting requires less capital which gives businesses more flexibility' (51%, 49% and 45% respectively).

5.18 Opinion was divided over whether 'Farmers are able to make an adequate living from agriculture', with 41% agreeing and 38% disagreeing with this statement.