THE AVAILABILITY of land to let remains central to the encouragement of new entrants. That much was made clear yesterday when the Tenant Farming Forum presented its findings to Rural Affairs Secretary Richard Lochhead, writes Ewan Pate, farming editor.

The TFF includes members from six interested parties, and has been chaired since its inception by Professor Jeff Maxwell, former director of the Macaulay Institute.

Last year Mr Lochhead asked the TFF to look at barriers to new entrants and to see how these could be dismantled, or at least lowered.

Yesterday’s report could certainly be regarded as the most thorough examination yet of the subject. It runs to 17 pages of analysis, nine recommendations and 135 pages of background research, much of it informed by a countrywide survey.

Nearly 500 respondents made written submissions and six workshop sessions were held over the winter.

Although recommendations are made, it is understood that Mr Lochhead believes there is much more to be done and may be looking for more radical action to allow him to fulfil election pledges made last May.

The most controversial area centres around the unwillingness of landlords to let land, especially since tenants’ right to buy legislation was introduced in 2003.

Professor Maxwell said, “It is noted that even aspirant farmers recognise the strong disincentives of prudent landowners seeking to manage risk and this partly explains the widespread use of short-term lets, contract farming and other arrangements, most of which favour established farmers rather than new entrants.”

Resolving that problem without new legislation will not be easy.

The Scottish Tenant Farmers’ Association is a member of the TFF and yesterday its chairman Angus McCall attempted to quell landlords’ fears.

“I want to emphasise that there should not be an extension of right to buy extended to new entrants or those who have tenancies which commenced after the 2003 Agricultural Holdings Act,” he said.

However, the official recommendations of the TFF contain an important caveat which says, “The TFF, with the exception of the STFA, recommend that there should not be any extension of the right-to-buy legislation beyond that embodied in the Agricultural Holdings (Scotland) Act 2003 in relation to secure (1991 Act) tenancies.”

This important qualification will surely alert landlords who dread any extension to the legislation.

However, that cannot be ruled out, because another key recommendation relates to the odd arrangement in the 2003 legislation where short limited duration tenancies (SLDT) can only last for a maximum of five years and the longer-term limited duration tenancies cannot last for less than 15 years, leaving an awkward 10-year gap in the middle.

Professor Maxwell, recognising that let land was likely to become available to new entrants only on the shorter duration tenancies, said, “Ultimately,an incoming tenant needs the confidence of a realistic minimum duration of tenancy to allow for forward business planning and to be able to access bank borrowings.”

The TFF is examining a more appropriate length of LDT and intends to make recommendations, but it is unclear whether these could be adopted without changes to primary legislation.

Apparently, many of the respondents to the TFF survey, both potential landlords and aspiring tenants, felt the freedom to contract any sort of tenancy to suit the circumstances would be a better way to proceed.

Much will depend on the Scottish Government’s response to these recommendations and its willingness, or otherwise, to take action.

Taxation issues relating to let land were also identified as a barrier but in this case the problem will not be solved at Holyrood and only representations to Westminster could have any effect.

Professor Maxwell pointed out that aspects of income tax, capital gains tax and agricultural property relief on inheritance tax would all drive a landowner to the conclusion that either farming in-hand or using a contract farming arrangement would reduce the fiscal burden.

The Scottish Government may be fairly powerless in this respect but the TFF has nonetheless asked for a review of the tax arrangements relating to let land.

Other recommendations merge more neatly with actions already taken within Scotland.

The TFF agrees that the best way to help new entrants is not by means of grants but by subsidising interest payments on loans made through commercial banks. This measure is already included in the Scottish Rural Development Programme.

The “blocking” effect of farmers who are reluctant to retire is also recognised. In many cases this is for tax reasons or because a tenant farmer might not be able to afford a house.

The suggested remedy would be to build on the drive for affordable rural housing and to ease planning restrictions in favour of a retiring farmer when a new entrant could be identified.

Lack of availability of single farm payment entitlements to new entrants was also seen as a problem which had to be resolved.