The Agriculture Act 2020 and its impact on Farm Business Tenancies

Published: 27/10/2022 By Rosie Chandler

11th November 2020 heralded the arrival of the first British piece of legislation for agriculture seen since 1947. Rural Surveyor Rosie Chandler outlines the impact it has had on Farm Business Tenancies. 

11th November 2020 heralded the arrival of the first British piece of legislation for agriculture seen since 1947. It’s a date firmly etched in my mind as it was the date that I, and fellow candidates, sat our Central Association Agricultural Valuers (CAAV) exams, we made sure we double-checked the news announcements that morning!

It has taken some time for the government to firm up the policy implications of this new Act. Arguably the most politicised change has been the phasing out of the Basic Payment Scheme subsidy and the phasing in of the new Environmental Land Management Scheme.

The Act also introduces the Lump Sum Exit Scheme for retiring farmers, and a range of grants for improving the productivity of farms.

A number of provisions relating to Tenancy Reform are included in the Act, including key statutory changes relating to dispute resolution in Farm Business Tenancies. Referring parties can now apply to the Agricultural Law Association and the Central Association of Agricultural Valuers as well as the Royal Institution of Chartered Surveyors for arbitration.

Negotiating Farm Business Tenancies becomes more complex as entitlements will effectively be phased out in 2024.  An existing claimant will continue to receive the remaining subsidy so the long-term effects must be carefully analyzed.

For landlords, there may be implications on land or rental values if there is a change in tenants during the agricultural transition. Whereas tenants who have to return the entitlements to the landlord upon termination of the tenancy may find it more difficult to surrender. Those farmers taking advantage of the lump sum early exit scheme will have relinquished their rights to claim any remaining BPS, leaving the subsequent farmer without subsidy unless they can procure their own entitlements.

The Agricultural Act provides a framework for many improvements in environmental procedures, efficiency, and food security, but as ever, the technicalities and terms contained therein can be confusing. Symonds & Sampson’s rural agents across the region are on hand to help ensure that you don’t lose out during the de-linking process, please contact our agents in your nearest office.

Symonds & Sampson's Rural Agents throughout the region offer a wide range of services to farmers and landowners alike. Find further information here