Farm leaders have called for greater transparency over rent proposals on tenant farms.
A trio of organisations – NFU Scotland, Scottish Land and Estates (SLE) and the Scottish Tenant Farmers Associations – have urged landlords and tenants to follow cross-industry guidance regardless of whether the proposal is for a rent increase or decrease.
The trio say all proposals should be laid out in a transparent manner and take into account a difficult period for the industry, with falling commodity prices and a change in farm subsidy support payments.
In August the organisations jointly published guidance on rent reviews. They say although the guidance has been well received and the vast majority of autumn rent reviews have been settled amicably at an affordable level, there is concern that some landlords are asking for significant rent increases from tenants without a fully transparent justification being given.
NFU Scotland president Allan Bowie said: “I struggle to see how rents could be increased at the moment other than in exceptional circumstances. The industry is under significant pressure, and it is essential that pragmatism prevails in any discussions between landlords and tenants about rents. The guidance is there to ensure that this happens in a fair and open manner, and I am delighted that so many people have already found it helpful.”
This was echoed by STFA chairman Christopher Nicholson who said the current economic climate of farming pointed towards rent reductions. He said: “Tenants who agreed to rent increases over the last decade when prices and support payments were more favourable would have an argument to reduce rents. It is therefore vital that both landlords and tenants fully justify their respective positions with reference to farm profitability in any rent review negotiation”.
SLE chairman David Johnstone said the key to all rent proposals was transparency. “Rent proposals that lack a sufficiently detailed justification are not helpful in ensuring a fair outcome for both parties,” said Mr Johnstone.