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Farming

Welcome evidence of longer farm tenancies

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TFA Chief Executive: George Dunn

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.

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Farming

Farming faces zero carbon challenge

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AN AMBITIOUS new target to reduce greenhouse gas emissions to zero by 2050 will lead to significant changes in farming practices over the coming decades, according to a leading agri-environment specialist.

Professor Iain Donnison, Head of the Institute of Biological, Environmental & Rural Sciences (IBERS) at Aberystwyth University, was responding to the publication of ‘Net Zero: The UK’s contribution to stopping global warming’ published by the UK Government Committee on Climate Change.

Professor Donnison is an expert on agriculture and land use, which feature in the report in terms of targets for one-fifth of agricultural land to be used for forestry, bioenergy crops and peatland restoration.

According to Professor Donnison, such a reduction is very ambitious but achievable in Wales and the wider UK. “Land use can positively contribute towards achieving the net zero targets, but there are challenges in relation to emissions from agriculture especially associated with red meat and dairy,” said Professor Donnison.

“In IBERS we are already working on how to make livestock agriculture less carbon intensive and developing new diversification options for the farming of carbon. For example, net zero targets could provide significant diversification opportunities for both farmers and industries that make use of biomass and wood for the production of energy, materials including in construction and for wider environmental benefits.”

Professor Donnison added: “The report gives a clear message regarding the importance of the task and the role that the UK can play to compensate for past emissions and to help play a leadership role in creating a greener future.

“The report says it seeks to be based on current technologies that can be deployed and achievable targets. One-fifth of agricultural land is a very ambitious target but I believe that through the approaches proposed it is achievable (e.g. for bioenergy crops it fits in with published targets for the UK). This is based on the knowledge and technologies we have now regarding how to do this, and because right now in the UK we are developing a new agricultural policy that looks beyond the common agriculture policy (CAP). For example, the 25-year Environment plan published by Defra envisages payment for public goods which could provide a policy mechanism to help ensure that the appropriate approaches are implemented in the appropriate places.

“The scale of the change, however, should not be underestimated, although agriculture is a sector that has previously successfully responded to challenges such as for increased food production. The additional challenge will be to ensure that we deliver all the benefits we wish to see from land: food, carbon and greenhouse gas (GHG) management and wider environmental benefits, whilst managing the challenge of the impacts of climate change.

“The link is made between healthy diets with less red meat consumption and future reductions in greenhouse gas emissions from agriculture. This reflects that agriculture will likely go through significant change over the coming decades as a result of changes in consumer diets.

“Net Zero targets, however, could provide significant diversification opportunities for both farmers and industries that make use of biomass and wood for the production of energy, materials including in construction and for wider environmental benefits.”

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Farming

HSE fees up 20%

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A FEE imposed on farm businesses found to be in breach of health and safety legislation has gone up nearly 20% to £154/hr.

Since October 2012 the Health and Safety Executive has operated a cost recovery regime, which means that businesses are charged for the costs of an investigation from the point a material breach has been identified through to the point when a decision is made on enforcement action.

If you are found to be in material breach of health and safety law, you will have to pay for the time it takes the HSE to identify the breach and help you put things right. This includes investigating and taking enforcement action. This charging scheme is known as a Fee for Intervention (FFI).

Robert Gazely, farm consultant and health and safety specialist for Strutt & Parker said: “A material breach is something which an inspector considers serious enough that they need to formally write to the business requiring action to be taken. Once an inspector gives a farmer this written notification of contravention (NoC), the farmer will be expected to pay a fee.

“From 6 April 2019, the hourly charge has been increased from £129 to £154. The final bill will be based on the total amount of time it takes the HSE inspector to identify the breach and their work to help put things right.

“Of course, the primary reason for farms to be proactive in their approach to health and safety should be to protect themselves, their families and any employees.

“The number of people who are killed and injured each year on farms remains stubbornly high and the human cost of these incidents can be incalculable to those affected.

“But taking a safety-first approach should also help farm businesses to avoid a financial hit, as the HSE fees can mount up in the event of an investigation.”

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Farming

Red meat gives ‘Taste of Wales’

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WELSH Lamb and Welsh Beef were among the finest of Welsh foods at Wales’ largest and most prestigious food and drink trade event, Taste Wales last month.

The remarkable display of products, all under one roof, brought together a large contingent of UK and overseas buyers, including importers with a specific interest in Welsh red meat. These included a major foodservice and retail importer and distributor from Scandinavia that imports 6,000 million tonnes of meat annually from all over the world. The company is recognised for bringing tasty food experiences to Nordic dining tables.

They were invited to the event by Hybu Cig Cymru – Meat Promotion Wales (HCC) who also arranged site visits to some of Wales’ major red meat processing plants. The main aim was to impress the importers with the industry’s high ethical and environmental standards.

The visit, led by HCC’s market representatives in Scandinavia, was a platform for many productive and promising discussions.

One representative, Anette Stenebrandt said at Taste Wales: “We have a company from Sweden and Finland with us, trying to do some new business in the Nordic-speaking countries. This is really a fantastic fair and we have enjoyed it a lot.”

Her colleague Jakob True added: “This is our first time here at this amazing event, it’s a great opportunity to meet a lot of Welsh producers, particularly Welsh Lamb which is world-class, we know. We’ll go back to Scandinavia with a lot of good new leads and hopefully bring a lot of business to Wales.”

HCC’s Market Development Manager, Rhys Llywelyn said: “Many of the buyers we met at Taste Wales, including the Scandinavians, showed a significant interest in Welsh Lamb and were impressed by the whole package – from the story of producing Welsh Lamb to the processing techniques, the taste and texture.

“Others also expressed a keen interest in forging deals with the industry, including a Japanese department store, a major buyer from Hong Kong and a representative from Qatar. This bodes well for the future, especially as Brexit uncertainty is set to continue in light of the extension on Article 50.”

In recent months, HCC has undertaken a strategic GB marketing drive to encourage growth and recognition of our quality produce on British soil.

HCC’s UK Market Development Executive, Emily Davies said: “Our presence at Taste Wales also included concentrating our efforts on promoting Welsh Lamb in the domestic market. We met a number of foodservice companies, retailers and executive chefs and discussed Welsh red meat opportunities with meal-kit companies and online retailers. We also launched a new tool-kit for retailers which highlights the ways in which we can work with them to promote Welsh Lamb and Beef.”

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