THE TENANT FARMS ASSOCIATION has welcomed a report from the Central Association of Agricultural Valuers (CAAV) indicating that there has been a significant improvement in the average length of Farm Business Tenancies (FBTs) in England and Wales.
Since the introduction of FBTs in 1995 the TFA has been concerned that average lengths of term have ranged between only 3 to 4 years. As a result the TFA launched the FBT10+ campaign in 2015, the 20th anniversary of the introduction of the new legislation, to argue that farm tenancies had been too short for too long and that urgent change was necessary.
The short-term nature of agricultural tenancies has held back progression, investment, sustainable land use and productivity on farms. With much higher demand for land than supply, landlords can offer short-terms, for high rents at very little risk whilst at the same time pocketing generous and unconstrained tax benefits which the TFA argues must be addressed.
TFA Chief Executive George Dunn said: “It is encouraging to see from the CAAV report that the average length of all FBTs has increased to 4.5 years and that excluding lettings of less than a year, the average was six years. This is a step in the right direction towards the goal of seeing average lengths of term in excess of 10 years and clearly the TFA’s campaign has had an impact in encouraging more sustainable tenancy lengths being brought forward. However still more needs to be done to encourage the landlord sector to offer the longer terms that we need to see.”
“The new Government must grasp the nettle to introduce measures to change the fiscal environment within which rural landlords make decisions about letting land to encourage longer term FBTs. The tenanted sector cannot begin to consider issues of resilience and sustainability in the post Brexit environment with average lengths of term on new FBTs of under 10 years,” said Mr Dunn.
The TFA is arguing for the following measures to be in the new Government’s first Budget:
(a) Restricting the generous, 100% Agricultural Property Relief from Inheritance Tax (currently available to all agricultural landlords, regardless of the length of time for which they let land) only to those landlords prepared to let farmland for 10 years or more (excluding rotationally let land on short terms for vegetable and other high value crops).
(b) Clamping down on those land owners who, through schemes promoted by agents and accountants, are using share farming, contract farming, share partnerships and grazing licences as thin veneers of trading activity and as vehicles for aggressive tax avoidance where they take no risk in the business, have little, if any, entrepreneurial input and lack any management control.
(c) Offering landlords prepared to let farm land for 10 years or more the ability to declare their income as if it was trading income for taxation purposes.
(d) Reforming Stamp Duty Land Tax to end the discrimination against longer farm tenancies.
“The TFA is pleased to see that the Government has reconvened the Tenancy Reform Industry Group and this must be a key element for it to consider alongside other important measures to provide a sustainable framework for the tenanted sector of agriculture in the post Brexit era,” said Mr Dunn.
FUW criticise Assembly Committee
ACCORDING to the FUW, a National Assembly for Wales committee has been misled into making a draconian recommendation that would play into the hands of multi-billion pound telecommunication companies.
The union has also suggested that the committee may have been naive in not identifying the true motives of those advocating such moves.
The National Assembly for Wales’ Economy, Infrastructure and Skills Committee published a report entitled Digital Infrastructure in Wales, which included a recommendation that ‘The Welsh Government should consider making future public subsidy conditional on supporting government policy to improve digital infrastructure, and to ensure that it meets the needs of consumers in the future, in particular any likely convergence between broadband and mobile internet connectivity.’
Responding to the report in a letter to Committee Chair Russell George AM, Gavin Williams, chairman of the FUW’s Land Use and Parliamentary Committee, said: “The Farmers’ Union of Wales has long been a proponent of increasing both broadband and mobile phone coverage in Wales, and has worked closely with Ofcom and others for more than a decade to highlight the needs of Wales’ communities in terms of both.”
Mr Williams goes on to highlight the fact that the union is unaware of any instances where farmers have refused to enter into a fair agreement with commercial companies responsible for digital infrastructure – but is aware of many cases where agreement has been reached between farmers and communication companies but planning permission has been refused, and of instances where companies have behaved in unacceptable and unprofessional ways in order to try and install communication infrastructure on private land.
“There may well be a handful of cases where landowners have been uncooperative, but we would suggest that members of the Economy, Infrastructure and Skills Committee have been misled if they believe this is so widespread that it warrants a draconian recommendation to Government, said Mr Williams.
“Rather, we would suggest that the underlying motive for those who have suggested such a barrier exists at any scale is the wish to boost company profits by seeking changes which would allow farmers and landowners to be bullied into signing contracts which do not represent the commercial nature of work and installations.”
Mr Williams concludes his letter by saying, “We share the Committee’s frustrations regarding barriers to broadband and mobile coverage, but find it wholly unacceptable that a National Assembly for Wales committee has been led to believe – some would say naively – that it would be desirable to see multi-billion pound commercial companies boosting their profits by forcing family farms to accept one-sided agreements that in no way reflect the commercial nature of mobile and broadband infrastructure.”
Lynx trial decision near
THE NATIONAL SHEEP ASSOCIATION (NSA) is concerned to hear rumours that Secretary of State for the Environment Michael Gove may be prepared to fast-track a decision on lynx release.
It is calling on representative farming bodies and individuals to unite and take action to voice unanimous concerns over the proposals.
NSA is aware the Lynx UK Trust is continuing its campaign work while the application is considered, and feels it is essential Mr Gove appreciates the substantial and widespread concerns rural communities have around the proposed lynx release.
Lynx became extinct in the UK around 1,300 year ago.
The medium-sized cats can grow to around 1.3m, are apex predators in their environments, and hunt by ambush in forest habitats.
Phil Stocker, NSA Chief Executive, said: “I know Mr Gove is interested in these proposals and I am certain now is the time for individual farmers, land managers and their representative organisations to make their feelings heard. I would go as far as urging every farmer who has views over this to write to the Secretary of State so he can appreciate the strength of stakeholder concerns, which go way beyond the losses that will be suffered by sheep farmers.”
A verdict on whether lynx should be released in Kielder Forest, Northumberland, is still pending after Lynx UK Trust submitted a formal application to Natural England earlier this year. The Government advisory body is currently reviewing information, and is expected to announce a decision in the coming months.
The Trust has also asked landowners in Wales if they would be happy to allow lynx to roam their properties and its chief scientific advisor, Dr Paul O’Donoghue, claims that five Welsh landowners have expressed an interest in lynx being placed on their land.
Dr O’Donoghue said in Europe, the kill rate was 0.4 sheep per lynx per year.
Mr Stocker continued: “The risks to landscape and wildlife, heavily invested in for years, are real. Alongside disease and welfare risks, coupled with concerns around whether any lynx population could be genetically sustainable on our heavily populated island. This of course in addition to the resultant losses and stress on farmers.
“It is not a simple matter of a compensation package putting everything right. We know from sheep farmers in Finland, Norway and elsewhere that losses go way beyond those predicted. I simply cannot accept that the conscious release of a high-level predator is compatible with the high level of animal welfare expected of British farmers.”
The Lynx UK Trust has announced an agreement with Lloyds Syndicate ARK Speciality Programs, which they say will insure the entire sheep population against lynx attacks throughout the period of a trial – if it goes ahead.
Brexit trade agreement attacked by US
AN ADVANCE in the Brexit negotiations between the European Union and the UK Government has been rejected by the US Government and other major agricultural exporters.
EU negotiators had reached a tentative agreement with the UK to establish a single approach to dividing up their relationship with other members of the World Trade Organization post-Brexit.
At the moment, the UK is a joint member of the WTO with the other 27 EU members.
The British economy accounts for about 16 percent of the EU economy but its share of EU imports from other WTO countries at preferential tariffs varies according to products.
As the UK quits the EU in 2019, it will need to separate out its share of the EU’s overall quotas for farm goods that can be imported from countries such as New Zealand and Australia.
According to Reuters, neither the remaining EU states nor Britain want to have to accept greater quantities of low- or zero-duty farm imports from the rest of the world to avoid increasing competition for their own producers. But determining where such goods currently end up being consumed inside the EU customs union is problematic.
In an interview with Bloomberg News, International Trade Secretary Liam Fox said: “We have come to an agreement on the methodology of splitting EU quotas as we move forward,”
The Cabinet Minister described the agreement as ‘a step in the right direction’, but not a final agreement.
However, the agreement reached on quotas has been rejected by seven members of the WTO, including the USA.
Those signing a joint letter objecting to the agreement are US, Canada, New Zealand, Argentina, Uruguay, Brazil and Thailand.
The letter from the objectors states they were not consulted and the deal would disrupt “the delicate balance of concessions and entitlements that is fundamental to the global trade architecture today.”
It continues: “We are aware of media reports suggesting the possibility of a bilateral agreement between the United Kingdom and the European Union 27 countries about splitting Tariff Relief Quotas based on historical averages,
“We would like to record that such an outcome would not be consistent with the principle of leaving other WTO members no worse off, nor fully honour the existing TRQ access commitments.
“Thus, we cannot accept such an agreement.”
A spokesperson for the UK Government promised to coordinate with the complainants: “The UK wants to ensure a smooth transition which minimizes the disruption to our trading relationships with other WTO members and tariff rate quotas are one of the issues that we are discussing with the EU, and with WTO members.”
But New Zealand’s Deputy Trade Secretary tweeted: “Sorry that key partners assume a deal they strike between them will suit the rest of the world.”
And the US Government said: “Ensuring that US exporters of food and agricultural products have the market access in Europe due to them even after Brexit is a high priority for the administration.”
In a response to Brexit, exporters to the EU will want to redress what they regard as an imbalance in quotas by seeking larger export quotas for their own goods. That move could spell disaster for UK farmers, as goods could be dumped on to the UK market, potentially pushing already pressed British farmers out of business.
The British-EU proposal is expected to be debated during the WTO’s week of agricultural talks later this month and at the WTO ministerial conference in Buenos Aires in December.
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