Memorandum submitted by Tenant Farmers
Association (X1)
RURAL DEVELOPMENT REGULATION
INTRODUCTION
The Tenant Farmers Association welcomes the
opportunity of providing written evidence to the House of Commons
Agriculture Committee as part of its short inquiry into the Rural
Development Regulation. The Committee has asked for brief statements
and we therefore set out below some of the important issues to
tenants in a concise format. We would be pleased to expand on
any areas below if the Committee would find it helpful.
UNIQUE POSITION
OF TENANTS
In looking at the Rural Development Regulation
it is important that the unique position of tenant farmers is
taken into account. Most traditional agricultural tenancies provide
a narrow focus within which tenants are allowed to operate and
many would find it difficult, without a sympathetic landlord,
to participate in Agri-environment or Rural Development Schemes
without creating bigger problems for themselves. Those on short
term Farm Business Tenancies may not have the required length
of time needed to satisfy scheme rules remaining on their tenancy.
Even where these hurdles can be overcome there
may also be problems for statutory succession. For example, in
a family farm where father is the tenant but wants his son to
succeed to the tenancy under statutory rules, it would be unwise
to allow the son to gain his main income from diversified activity
either on or off the holding, as he could fall foul of the "principal
source of livelihood" test under the statutory rules.
It is against this background that the TFA provides
its views.
Aid for Marketing
We see great advantage in developing regionally
based programmes providing support for marketing and collaborative
processing between farmers and that a well targeted grant scheme
for this could be a great help. We would urge the use of existing
channels (such as farmers markets, livestock markets and abattoirs)
to progress this scheme rather than inventing new infrastructures
and organisations.
ARTICLE 33 SCHEMES
The TFA welcomes the Government's commitment
to an "inclusive and integrated approach" to the implementation
of Article 33 Schemes. Given our concerns about the problems for
tenants in participating in non agricultural activity we would
prefer the introduction of community based projects such as developing
local roads and public transport, provision of other services,
developing livestock markets and the creation of information centres
as opposed to specific on-farm schemes.
AGRI-ENVIRONMENT
MEASURES
Given the difficulties faced by tenants in participating
in Agri-environment and Rural Development Schemes, we believe
that the Government should establish a taskforce to develop a
strategy for the full participation of tenants in these schemes.
This could include the amendment of the statutory definition of
agricultural use so that it includes land once in agricultural
use and now in an Agri-environment or Rural Development Scheme.
This would help tremendously with, for example, tenants participation
in schemes like Farm Woodland, Biomass, Habitat Creation, and
re-use of redundant buildings.
LESS FAVOURED
AREAS
The TFA is greatly disappointed that the decision
has been reached to switch HLCAs from a headage based system to
an area based system. Despite repeated concerns being expressed
to Government about such a switch it does not appear that the
Government paid adequate attention to these in the CAP Reform
negotiations. Although the change in policy is only to apply to
hill areas, we are concerned that it marks an opening of a change
for other schemes. We have urged the Government and the European
Commission to reconsider such an aspiration. A switch from headage
to area payments will only serve to reduce the value of the tenant's
capital and raise the value of land. Agricultural tenants in hill
areas will therefore be placed at a disadvantage to their owner
occupier counterparts.
The current scheme upon which the Government
is consulting the industry is overly complex and impractical.
We do not see how a de-coupled scheme could be developed without
reference to historic stocking levels. We also do not believe
that the European regulation prevents the Government from using
historical stocking rates as a basis for the scheme.
The TFA would not be opposed to an adjustment
being made, when setting individual farm payments based on historical
stocking rates, to take into account whether or not individuals
were over-grazing so that previous situations are not fossilised.
We would also like to see the possibility that producers are offered
the opportunity of taking a capital sum based on five years payments
for a five year management agreement. They could then use the
capital sum to restructure their businesses or invest in other
activities.
EARLY RETIREMENT
SCHEME
By far the biggest disappointment to the TFA
was the lack of any early retirement scheme in the package of
measures announced by the Minister. It was particularly disappointing
given the Minister's apparent support for such a scheme. The Minister
has been keen to promote restructuring in the industry and the
TFA believes that a significant kick start to such restructuring
would have been a well targeted early retirement scheme.
There are many tenant farmers who have seen
the value of their capital decline year on year, who are in significant
debt to the bank and have little option but to stay put, who would
have been encouraged to leave the industry if an early retirement
package had been developed. There is now no route available to
these individuals allowing them to leave the industry with dignity
and restructuring will be all the more difficult to achieve.
The TFA would urge the Select Committee to ask
the Minster to think again on this point. A scheme targeted on
tenanted holdings would provide benefits to the most needy and
the maximum amount of restructuring.
MODULATION
The Government has been keen to stress that
modulation, together with the matched funding from the Treasury,
will ensure that all sectors of farming (apart from general cropping)
will benefit from the Rural Development Regulation. The TFA remains
to be convinced that the modulation with matched funding will
be at least neutral or at best beneficial across all tenancy types
given the difficulties, already noted, for some tenants in participating
in Agri-environment and Rural Development Schemes. With this concern
and the lack of an early retirement package the TFA cannot support
the concept of modulation.
CONCLUSION
The package of measures announced by the Government
on the Rural Development Regulation is a disappointment to the
TFA. Our main concern is the lack of an early retirement scheme
but we are also very concerned about the ability of farm tenants
to access Rural Development and Agri-environment schemes by virture
of restrictions within their tenancy agreements or in the legislation.
We are also deeply worried about the implications of the new hill
farming scheme which could impact very badly upon hill farming
tenants. The TFA believes that the Government has much more work
to do before we can support the package announced by the Minister.
21 December 1999
| 
