The Farming Profitability Review and Farm Tenancies

The Farming Profitability Review by Baroness Minette Batters was published on 18 December 2025.  At 154 pages, including appendices, it’s a chunky piece of work.  The Review provides 57 separate Recommendations for action.  With this amount of effort going into it, the Review is well worth reading, and a link to the full Review is here:   farming-profitability-review.pdf

This is one of a number of articles looking at particular Recommendations from the Review that catch the eye.

When an agricultural lawyer looks at something like the Farming Profitability Review their attention will almost always be drawn towards comments around control of land and tenancies. That is because these are legal concepts but, more importantly, because so much of the work that we do is connected in some way with the ownership or occupation of rural land – in the main, that is where the value is: 

Recommendation 35: Defra to support the tenant farming sector to give them the confidence to invest in and grow their businesses by: 

• Encouraging longer term tenancies through a review of income tax relief for landlords and stamp duty land tax for tenants. 
• Welcome the Law Commission’s review of tenancy legislation and recommend that it should include up-dating end of tenancy valuations to include environmental value. The Law Commission review should also ascertain if the Commissioner for the Tenant Farming Sector needs to be given statutory powers in line with the Grocery Code Adjudicator. 
• Welcome the new Commissioner for the Tenant Farming Sector. The role should be reviewed in 2 years and consideration given to whether the post needs statutory powers including a statutory basis for the code of practice.

                                                                                                 Farming Profitability Review – M Batters, 2025

What this shows is a reinforcement of the perception that some of us have that there has been a fundamental shift in the direction of travel on tenancies.  That seems to reflect the widespread perception that although Farm Business Tenancies (FBTs) have delivered lots to the rural sector, they are in the main perceived as being landlord- rather than tenant-friendly. 

The pushback against the liberalisation of tenancies is not just happening in agriculture.  The most striking example is in residential lettings (see our guide The Renters Rights’ Act 2025 – What you need to know: The Renters' Rights Act 2025) but there are also initiatives going ahead for commercial lettings under the Landlord and Tenant Act 1954 which may be less dramatic, but are perceived to tip the scales back towards tenants.

With agricultural land, there is a perception that the FBT regime has led to too much short-term letting, restricting tenants’ investment in land, and has driven the price of land up too much, preventing new entrants.

In the main, the recommendations refer to initiatives that are already underway.  The Law Commission’s review of tenancy legislation is one, although that has not yet got going so as to involve the sector.  Another is the suggestion of considering beefing up the powers of England's Commissioner for the Tenant Farming Sector (strikingly, made less than 3 months after the announcement of the first Commissioner) and the idea of potential tax incentives for longer-term lettings, a concept borrowed from the Republic of Ireland.

All parts of the rural sector seem to recognise that change is coming, and what is notable now is that landowners are also engaged closely in this process, looking to move their relationships with their tenants on to a longer-term, more partnership-based approach.  

They are doing so believing that this will lead to their agricultural land being better looked after, with tenants who will be in a position to deliver on landowners’ environmental aspirations and take advantage of diversification opportunities that might suit the particular holding.  For the leading example of this, see the Environmental Farm Business Tenancy, created for The Crown Estate’s rural lettings and endorsed by the Tenant Farmers Association:  eFBT - The environmental Farm Business Tenancy.  The thinking is that as well as delivering for the landowner, agreements like this will enable long-term tenanted farms to thrive.

Previous articles in this series:

• The Farming Profitability Review and the Active Farmer - Burges Salmon