Tenant farmers' fears over rent increases

Surges in wheat prices this year to around the 150 a tonne area have led some landlords to seek an increase in rental costs from thousands of tenant farmers across Yorkshire and the North East.

However while commodity prices may be high, little of this is being seen at the farm gate – -with both the Tenant Farmers' Association and the National Farmers Union saying they expect rental negotiations to be very tough in the coming weeks and months.

The NFU said the issue was of "grave concern" to its members while the Tenant Farmers' Association said the problem was already being seen by many farmers currently trying to renegotiate their rental figures – some of whom are being asked to pay as much as 150 an acre in rent.

In response, the North East NFU is holding a specialist meeting for tenant farmers to help them prepare for the next round of rent reviews.

"This summer's headlines highlighted record prices for cereal crops and that is encouraging landlords to argue for higher rents," said North East NFU regional director, Richard Ellison.

"But even in the cereals sector, few farmers actually received the reported high prices, having 'forward sold' much of their crop at the lower prices of 2009. Across other sectors, beef returns have fallen steadily this year and the price crisis facing dairy farmers is well documented.

"Alongside this we have seen farmers' costs increasing and this looks set to continue into the winter. As a result we are keen to help our tenant members prepare for what will undoubtedly be a tough round of rent negotiations and put themselves in the best possible position to secure a reasonable review."

George Dunn, chief executive of the Tenant Farmers' Association, said: "We are particularly worried about this. Individuals on short-term tenancies are currently negotiating their rents as we speak. Whenever there is any sort of volatility in the cereal market, as there has been over the past few years, it does tend to get reflected in the rental market.

"Despite high cereal prices of 150 per tonne the majority of the crops sold this year are from people who were contracted last year to a lower price."

Mr Dunn also advised farmers who are negotiating their rental rate for next year to seek advice prior to agreeing a figure for the new year. The TFA is also campaigning on the issue of county council farms at the moment with many local authorities selling off the farms they own to save money.

The NFU is holding a meeting in York this week to discuss the issue at which expert advice will be provided by land agents working on behalf of tenants. The meeting will be held on Monday from 7.30pm at NFU Regional Office on Tadcaster Road in York.

CW 20/11/10