All change for agricultural tenancies?

The Law Commission is the government organisation that considers changes to the law.  They identify potential areas for review, consult on those and publish reports that generally result in new legislation being brought forward.  Given that role, their announcement that they will be looking at agricultural tenancies in England and Wales is significant. 

The present formal tenancy system is a mix of two types of tenancies, under the Agricultural Holdings Act 1986, and under the Agricultural Tenancies Act 1995.  

For a brief comparison between the two, and why the difference between them is very important, take a look at chapter 2.1 of The Pink Book 2 – the Burges Salmon Guide for Landowners and Farmers, available for free download here:  The Pink Book 2 - Burges Salmon

Changes to the farm tenancy regime have the potential to impact a massive area of land.  Figures from DEFRA for 2024 in England say that out of a total let area (let for 1 year or more) of 2.9m hectares, tenancies under the AHA 1986 make up 1.1m hectares, and FBT’s (Farm Business Tenancies – agricultural tenancies under the ATA 1995) make up 1.3m hectares.  The rest (493,000 hectares) is let under “other agreements”.  

Reading what the Law Commission say, you get the sense that they consider that FBT‘s are not working for tenants in particular:

We have heard that these regimes may not correctly balance the interests of landowners and tenants and that the lack of security of tenure and often short-term nature of many tenancies is a barrier to investment and the viability of some tenanted farm businesses.  We have also been told that the current law may restrict tenant farmers from diversifying and adapting their businesses and benefiting from new opportunities.  The current law may therefore hinder economic growth and opportunity for tenant farmers.

This is reinforced by their statement of the focus of the review:

This project will consider whether the existing law properly balances giving tenant farmers sufficient security to encourage investment and maintain viable farm businesses, opportunities for new entrants to access farming opportunities, and the interests and confidence of landlords to let land.

This project will also consider whether the law impedes tenant farmers from diversifying their businesses, including to farm in more sustainable ways; whether the law supports a collaborative approach between landlords and tenants; and whether there are technical issues which cause problems in practice.

But the Law Commission may now just be looking to catch up with the market, which has seen rapid recent change.  We have been part of that – look at the eFBT project we have worked on to produce The Crown Estate‘s new environmental Farm Business Tenancy documents, endorsed by the Tenant Farmers Association – a 15 year term, a genuine openness to environment enhancements and diversification, and a recognition of the need for mutual benefit for landlords and tenants – see  eFBT - The environmental Farm Business Tenancy which has the documents available for free downloading.  

These are modern and flexible, and focus on the landlord and tenant relationship which lies at the heart of farming tenancies.   

We will be sharing our experiences with the Law Commission when they consult on this project.  This is sufficiently important that everyone with an interest in the sector is encouraged to do so.

Detailed consideration of reform of the law in this important area is long overdue.

https://lawcom.gov.uk/project/agricultural-tenancies/