“Tenants are expected to pay outlandish rents just to get the land. The Estate has become so business orientated that it will take the highest offer.”
Until 2005, farming subsidies were linked to the amount of food farmers produced. Since then, payments have been based on the area of land and whether farmers meet environmental targets. This means that landlords are now aware of how much their tenants are receiving in farming subsidies.
David Robson, chairman of the NFU in Northumberland and a beef and sheep farmer, said this new transparency has caused many landlords to seek out the farmer’s entire subsidy in rent.
He said: “I’ve got no problem with the transparency as long as it’s not used against farmers by landlords for their own financial gain. It seems the Estate is wanting its pound of flesh. Historically, they were run more on the traditional basis where a farmer was actively encouraged to look after the land.
“Now if the farmer can’t pay he’s out the door. This is a get-rich-quick solution but offers no incentive for much-needed investment in the business.” The Estate has confirmed it is working closely with tenant farmers as part of its current round of farm rent reviews.
An Estate spokesman said: “We understand that tenants do not welcome potential increases in rent but believe that, by encouraging open and honest discussions during negotiations, rent reviews take into account the type of tenancy, the individual farm and rents accurately reflect market conditions.
“Each farm and rent review has unique circumstances and we actively engage in detailed discussions with individual tenants on a farm-by-farm basis.”
The average price per acre for farmland in the North East increased to £5,750 during the second half of 2012.
Surveyors attribute the strength of prices to higher demand and lack of available land.
Reports that tenant farmers are agreeing increases to their rent without seeking professional advice first are being picked up by the NFU.
NFU legal assistance scheme members are entitled to the Tenants’ First Advice service when facing a rent review. The service provides a contribution of up to £500 towards professional advice required to prepare budgetary reports for assessing the rental value of a farm.
A further statement from Northumberland Estates provided on March 14 said: “All of our rent reviews are conducted in line with legal statue and The Northumberland Estates also receives advice from a national land agency firm throughout the rent review process. Where appropriate, this includes comparing our proposed rents with those held in their national database of agricultural rents."
