Hopes legislation will bring fair play to rent negotiations
The fact that rent negotiations often prove to be a flashpoint in what should be a synergistic business relationship between tenant farmer and landowner can come as no real surprise to anyone.
The recent history of rent reviews – along with some of the lengthy legal battles which have ensued – has received a good deal of coverage in the media. It has also attracted a considerable amount of interest from the political classes as well – a fact which saw major changes to agricultural holdings legislation pushed through as part of Scotland’s 2016 Land Reform Act.
And last week was a busy one for anyone wanting to keep abreast of developments in the sector, with the publication of a 230 page report looking at how new plans to radically change how farm rents are assessed – by basing them on a unit’s “productive capacity” rather than the old practice of basing rents on what comparable units were paying.
But despite the extent of the report, most industry stakeholders felt more work was required.
Coincidentally, the week also saw the bell ring to start round two of the investigation requested by the Scottish Parliament into the conduct of land agents in the sector over the past decade or so.
I couldn’t help but feel that there was a certain amount of irony in the concurrent announcement of these two pieces of work, though.
And that was over and above the well recognised irony that it was one of the country’s largest land agent firms which was given the job of conducting the modelling review on future rent determinations – a move which raised predictable comments about putting foxes in charge of the chicken run back when the contract was announced.
But leaving this to one side, I can’t help but feel that it is a tad contrary for an official investigation to be underway into how an entire profession behaved under one set of rules – just at the point when these regulations are set to undergo yet another major upheaval.
Now I certainly wouldn’t want to be seen as an apologist for the role played by some professional intermediaries in creating tensions within the sector.
But there’s no getting away from the fact that the last round of changes to the legislation were only stress tested through the courts after enactment – and a lack of thoughtful and insightful political debate and scrutiny as the 2003 agricultural holdings legislation made its way onto the statute book set the scene for many of the problems which arose.
For there’s no escaping that without great care on the part of the legislators the introduction of a new set of rules can result in a lot of hassle for all involved.
I don’t know whether it was cause or effect, but the application of the 2003 act seemed to be followed fairly swiftly by a move away from the traditional estate-based factor.
This resulted in a more widespread use of land agent companies which had the underlying corporate resources to deal with the increasingly bureaucratic requirements of the sector.
And it could be argued that, as they took up cudgels to get the best deal for landlords, the tactics used by these large-scale businesses represented no more than the application of principles and approaches widely used in many other commercial areas.
Of course you might also say exactly the same about the tactics used during the Highland Clearances.
But even in the 21st century the change to playing hard-ball came as a shock to the agricultural sector which still had, if not a hint of feudalism then at least a sniff of the niceties of prewar social politeness about it.
And the clumsy and ruthless attitude which was sometimes adopted by those working for land agency firms – often backed up by expensive legal teams – was widely viewed as a direct assault on the tenanted sector, a view which was subsequently viewed from the outside as having distinct David and Goliath overtones .
So, with a new set of rules and regulations now coming along, the legislators and parliamentarians have to realise that they play a crucial role in sense checking the regulations and setting the scene for fair play – and pre-empt yet another round of stress, anxiety and bruising legal battles which has dogged the sector for the past decade.