By Andrew Howard (Managing Director, Moray Estates)
The issue of rent reviews has always been a topic guaranteed to stoke much debate in farming circles.
There is no doubt that the subject causes some friction but there is a real need to take a measured view on this issue.
Let me say at the outset that how rent reviews are conducted can be improved and Scottish Land & Estates has expressed this view many times. It is a point that the organisation will be making again to the Scottish Government's Agricultural Review.
It is beneficial to all involved on a number of levels to conduct more regular reviews rather than delay the process, even though there may be good reasons for doing so such as when farming hits a tough period. If reviews are conducted more frequently it encourages and sustains dialogue. This is a view that has been expressed by many farmers themselves.
In the bulk of cases where there is a significant rise in rents, it is where reviews have not been carried out frequently and circumstances have changed considerably over the period since the last review, which has the potential to cause difficulties for all involved.
In the overwhelming majority of cases, rent reviews are conducted amicably and this fact is often lost in debate.
The system of rent reviews has recently been considered by the independent Rent Review Working Group and it concluded that changes to legislation on reviews were not required.
This week, the Scottish Tenant Farmers Association called for a halt to rent reviews whilst the Scottish Government’s review of agricultural holdings legislation continues.
Should reviews be halted, the perfectly normal business practice of agreeing rents between two willing business partners would seize up and have a detrimental effect on relationships.
We subscribe to the view that such an intervention from the STFA is unhelpful at a time when everyone should be pulling in the same direction to create the most vibrant tenant sector we can possibly have.
The Scottish Government and the Tenant Farming Forum (TFF), of which Scottish Land & Estates is a member, believes that the rent review process should be seen as part of the normal working relationship between the parties involved.
There are ways that the review process can be improved, however. As part of our submission to the Agricultural Holdings Review, we will be putting forward our case to encourage new training, good practice and improving relationships for everyone involved in the review process.
Much of this work is underway through the TFF already but we can always look to do more to ensure rent reviews are as smooth a process as possible rather than something that should be halted to the damage of everyone within the sector.
As published in the Press & Journal on 22 March 2014