The Tenant Farmers Association (TFA) is urging farm tenants to take the initiative on farm rent reviews this autumn.
With the end to the EU exit transitional period, farm businesses face significant changes in government policy and in the trading environment within which they operate. This will bring new opportunities but also major challenges.
TFA National chairman, Mark Coulman said: “All tenant farmers need to be looking at whether their farm rent commitments are truly sustainable within these new circumstances.
“The removal of direct payments, the creation of new environmental schemes and additional friction expected in our trading relationships with the EU, all mean it is essential to ensure that we are controlling our costs.
Rent reviews triggered this autumn may not take effect for another 12 months, but they will set rent levels at least for the following three years.
Tenants acquiring additional land on new Farm Business Tenancies are also urged to take a cautious approach in how they tender for that land.
“Tender rents for new Farm Business Tenancies are running at unsustainably high levels. Routinely, we see that they are almost double the average levels of rent as recorded in the Defra rent survey,” Coulman added.
“Landlords are using short lengths of term and threats of remarketing land to keep rent levels very high. This approach has got to change.
“Given the uncertainty ahead, landlords would do better to seek long-term agreements with tenants paying sustainable levels of rent and avoiding regular agents’ fees in remarketing properties in short cycles.
Long-term tenancies provide opportunities for investment, growth and sustainable income for both parties.
“Long-term tenancies are also a better fit for the new schemes being developed by Government which propose paying farmers to produce public benefits from farmland.
“The TFA is on hand to provide advice, information and support in triggering a rent review or in pursuing negotiations for a rent reduction,” he added.
