Scottish tenant farmers with secure 1991 Act tenancies could soon be able to sell their tenancy to a new entrant when they choose to retire from the industry.
The Scottish Government has laid draft legislation – the Agricultural Holdings (Relinquishment and Assignation) (Scotland) Regulations 2020 – as part of the implementation of the Land Reform (Scotland) Act 2016.
If passed by Parliament, the legislation would allow tenants wishing to retire to relinquish their tenancy to their landlord for compensation, or in instances where the landlord does not want to buy them out they can sell the tenancy to a new entrant or a person progressing in farming for the tenancy’s market value.
Announcing the move, Rural Economy Secretary, Fergus Ewing said: “These changes will assist the tenant farming sector in moving forward while supporting those who wish to progress towards a well-deserved retirement or leave the sector.
“I know that for some tenant farmers who are anxious about what happens in the future and who want to move on but feel they cannot, this legislation will provide welcome peace of mind. It will also help new entrants find a suitable opportunity.”
Mr Ewing added: “This reform has the potential to make a positive difference to the future of our vital tenant farming sector, as part of a stronger, more robust and forward looking agricultural industry.”
The Scottish Tenant Farmers’ Association (STFA) welcomed the move and said the new legislation, if passed, would break the “tenancy logjam”.
However, STFA chairman, Christopher Nicholson, said delays in implementing the relinquishment legislation had been very frustrating and some tenants on secure 1991 Act tenancies had left their farms in recent years without being able to benefit from the process.
He added: “Relinquishment and assignation are important pieces in the tenancy reform jigsaw and will help break the logjam at the top of the tenanted sector while also providing opportunities to encourage elderly tenants to retire and make way for the next generation of farmers.”
Sarah-Jane Laing, chief executive of landowners’ body Scottish Land & Estates, welcomed the proposed new legislation and encouraged tenant farmers wishing to relinquish their tenancy to start discussions with their landlord.
She added: “These new provisions provide another route for those who wish to exit the sector.”