Urgent action call to tackle bemusing farm rent levels

Stephen Wyrill expected to have seen a larger number of farm rent reductions in 2015.
Stephen Wyrill expected to have seen a larger number of farm rent reductions in 2015.
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CONCERTED action to lower rent for farmland and relieve the acute financial pressure facing farmers has to be a pressing priority this year, an influential farming group said.

With little prospect of improvement in farming fortunes in the immediate future, it will be necessary, once again, for the farming community to tighten its belt and it is only right that landlords should share that burden too, said North Yorkshire farmer Stephen Wyrill.

The Tenant Farmers Association’s national chairman, Mr Wyrill who farms at Leases Farm, East Appleton near Catterick, said: “Despite the significant downturn in returns across all sectors we have seen very little response, so far, in terms of farm rents falling.

“On tenancies let under the Agricultural Holdings Act 1986 we have seen some reductions and many more standstills.

“However, I would have expected a larger number of reductions to have been in evidence in 2015. If current economic conditions within agriculture prevail then we must see many more reductions in 2016,” said Mr Wyrill, who this week took part in a panel session at the Oxford Real Farming Conference.

“For those taking land on Farm Business Tenancies, I continue to be concerned about what I can only describe as exorbitant levels of rent being offered at tender.

“Taking arable land and given current feed wheat prices, that must suggest that sustainable FBT arable rents on additional land should be no more than £100 per acre and even that, in some cases, would still be too much.”

He urged tenants to take advice about serving their own rent review notices on their landlords and using notices served on them to argue for reductions.

“Rent reviews conducted now will set the rent for the next three years and in this period of pressure on incomes they need to be as low as possible,” he added.

In their 2016 Outlook report, Andersons, the farm business consultants, said rents tendered in recent years have cause much bemusement.

On tenancies governed by the terms of the Agricultural Holdings Act, George Cook, senior farm business consultant at Andersons, writes: “The round of Michaelmas (rent) reviews in autumn 2015 saw a market lacking in direction.

“Some landlords served notices a year earlier believing they could get an increase, but falling commodity prices resulted in a standstill or even a reduction where the existing rent was very full.”

Mr Cook added: “Rents tendered in recent years have and continue to cause much bemusement, particularly at the higher end and even more so with current prices for many commodities being at or below this cost of production.”