A wide range of models can be used to allow exit, expansion and entry into the agricultural industry. Freehold and leasehold are not the only land tenure models available to begin and develop a farming business. Consideration must be given to ‘stepping stones’ to be taken towards the ultimate goal of freehold land ownership or, for some, just to farm. The model adopted does not need to be prescriptive. Each model chosen must suit those parties involved and be tailored accordingly. Professionals have a large role to play in facilitating successful land tenure models through the provision of support, advice and written agreements. Relationships are the key to successful land tenure models: each party must be respected and valued. Succession is also vital to a sustainable industry.
Entry, expansion and exit are topics regularly discussed within the agricultural industry: the traditional method of entry is either by inheritance or through the use of agricultural tenancies of private farm holdings or council holdings. Many council holdings have now been sold due to the local authority’s need to capitalise assets and private tenancies are few and far between.
Landowners wish to claim the Single Payment Scheme payment for themselves and also benefit from taxation reliefs: hence they hold farms in hand. Exiting from farming has historically been a very private decision and often discussed solely amongst family members together with their professional advisors. More recently, though, this approach to decision making is changing, with active discussions around the subject of succession within the Industry in general and an increasing range of alternatives to the sale of the farm or even letting it out.
Have the traditional methods of land tenure become outdated? To become sustainable does land tenure need to be developed to include joint ventures?
Challenges include the value of agricultural land for both sale and rental, security of tenure, taxation, the influence of the Common Agricultural Policy, the attraction of 9-to-5 jobs with higher wages, plus succession issues.
As part of this Nuffield Farming study Australia, New Zealand, Ireland, Wales and Brazil were visited.
The study sought to investigate the strengths and weaknesses of current land tenure options in order to understand what options could be available for adoption in the UK. From the study it has been concluded that land tenure, to be sustainable in the future, must expand to include joint ventures to allow farmers to expand, diversify, reduce costs to become more competitive, and provide a platform for new entrants to the industry.
Joint ventures which are considered suitable as formal tenure models are:
Many inspiring examples of entry and exit have been seen across the countries visited and they have provided step ladders into agriculture, expansion within the industry, and viable exit strategies. Successful businesses have resulted, offering commerciality and also a fantastic quality of life.
People are vital to the success of any land tenure model adopted and the relationship between the parties is the key to success.
Succession issues must be embraced and are vital to the cycle of land tenure: allowing new generations to enter the industry, facilitating expansion, change and the adoption of new technologies; while ensuring the existing farmer is respected and traditions valued as the Industry continues to move forward. Land tenure and succession go hand in hand.