Tenant farmers are at the heart of our rural economy, says government

The government has published its response to the Rock Review.

On the government’s offer

“Tenant farmers continue to help shape our offer through pilots, tests and trials, co-design and stakeholder groups. For example, we designed Sustainable Farming Incentive (SFI) agreements to be three years in duration, making it easier for them to take part.

“We also allow farmers with only two years remaining on their tenancy agreement to enter the scheme and leave without penalty after two years, along with those on rolling one-year tenancies, or licences that operate like tenancies.

“We’re adding twice as much scope into the scheme as planned in 2023, making a wider range of options accessible to tenants without landlord consent and on shorter agreement lengths than have historically been available.

“We also invited tenant farmers to take part in project bids during the first round of Landscape Recovery as long as they could show they had management control of the land, or the consent of those with management control, for the duration of the project development and implementation agreements.

“We asked landlord applicants within Landscape Recovery projects to confirm that they had the support of tenants before submitting their applications. We also asked them to confirm that the support of tenants extended into the development phase.

“We’ve made sure that our grants are accessible to tenant farmers, including the £168 million of investment we will make available throughout 2023.

“We lowered the minimum Farming Equipment and Technology Fund grant to £1,000. The Farming Equipment and Technology Fund now allows local authorities to be the applicant.

“Larger value grants under the Farming Investment Fund are available to both landlords and tenants.
“Countryside Stewardship capital grants are available to both landlords and tenants.

“We continue to work with tenant and landlord organisations to find practical and achievable ways to enable more tenant farmers to take part in tree planting schemes and contribute to the government’s tree planting ambitions in England.

On improving accessibility and flexibility

The government has pledged to:
● Offer further options on SFI terms and conditions in 2024 so that tenants can access them straightforwardly and on flexible terms that work for them
● Bring together all schemes that support tree and woodland planting into a central service by bringing the England Woodland Creation Offer into enhanced Countryside Stewardship in 2025
● Work with tenant farmers to explore how we can simplify and bring more flexibility into Countryside Stewardship options
● Work with tenant and landlord organisations to find practical and achievable ways to enable more tenant farmers to contribute to England’s tree-planting ambitions.

On strengthening landlord-tenant relationships

The government has pledged to:
● Improving our engagement with the tenanted farming sector through the establishment of the new Farm Tenancy Forum.
● Launching a call for evidence this summer to explore the benefits and impacts of how a Tenant Farmer Commissioner might work in practice and how such a role might fit within existing procedures and regulations.
The response also shared that the Royal Institute of Chartered Surveyors (RICS) will lead the development of a code of practice on expected standards of socially responsible behaviour for all parties involved in agricultural tenancy agreements.

On encouraging new entrants

The government responded: “We are designing all our farming schemes to be as accessible as possible to tenant farmers and will continue to build on this as we deliver our schemes.
“Through our New Entrant Support Scheme pilot, we’re testing approaches to building entrepreneurial capacity and increasing opportunities to access land and finance.
“We will commit to assessing how the pilot supports farmers to gain new tenancies and we will present emerging findings to the new Farm Tenancy Forum, to ensure that the views of the tenanted sector are embedded into the scheme.
“By supporting tenant farmers and making our offer work for them, government can encourage new people into the sector.”

Tax incentives

The review included recommendations on how tax incentives could encourage longer-term tenancies.
The government launched a consultation to explore the extension of inheritance tax relief to include land in environmental land management schemes and ecosystems service markets.
It has pledged to:
● Open a call for evidence on the taxation of ecosystems service markets to understand the commercial operations and the areas of uncertainty around taxation
● Update the HMRC Inheritance Tax Manual to help clarify the tax treatment of agri-environment schemes.

Next steps

The government pledged to:
● Work closely with the new Farm Tenancy Forum (FTF) to progress and implement many of the commitments outlined in our response
● Share details of the FTF membership here on the blog later this year
● Report on progress.

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