Farm land rents rise by 3% over 12 months

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Agricultural land rents have gone up three per cent in the past year according to new figures published by the Scottish Government this week.

NFU Scotland said that considering the huge financial pressure on Scottish farmers over the past 12 months, it was difficult to justify any increase in rents.

Rents in the Lothians and Borders are among the highest in Scotland, three quarters of tenant farmers in the Lothians paying over £75 per hectare.

Average rent for land was £39 per hectare in 2014/15 compared to £38 per hectare the previous year, increases seen in both the poorer-quality Less Favoured Area (LFA) land, which was up three per cent from £25 to £26 per hectare, and in the better quality land which rose by five per cent from £124 to £130 per hectare.

The Tenanted Agricultural Land in Scotland 2015 Farm Accounts Survey reveals: “Between 1998 and 2008 there was very little change in the overall average rent paid per hectare (and hence a reduction in real terms, once inflation is taken into account).

“Since 2008 there has been an above-inflation increase in rent (41 per cent or 23 per cent after accounting for inflation), particularly on LFA land which has risen 57 per cent (36 per cent in real terms).”

In 2015 there was a total of 1.32 million hectares recorded as rented under arrangements lasting at least one year - 23 per cent of the country’s agricultural land, or about one sixth of the total area of Scotland.

“There was no clear pattern as to whether tenanted farms were more or less profitable than owned farms.”

NFU Scotland’s legal and technical policy manager, Gemma Thomson, commented: “Given the huge pressure on farm businesses at this time, it is difficult to envisage any circumstances that would support an increase in rents.

“There remains a disconnect between farm rents and farm profitability and we recognise that all sectors of the agricultural industry are going through a torrid time with commodity prices at an historic low.

“Knowing that rent reviews can be a point of friction between landlords and tenants, the union drove the formation of a code of practice for rent reviews, and insisted on the early appointment of an Interim Commissioner for Tenant Farming ahead of the full time post created within the Land Reform Bill.

“We encourage any member who has concerns over a tenancy to make contact with NFUS to allow us to refer issues to the Tenant Farming Commissioner, Andrew Thin.

“NFUS has already referred a number of issues to him which he has been able to successfully resolve.”