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Reform plans could land rural sector in difficulty, warns Finlay Clark

Reform plans could land rural sector in difficulty, warns Finlay Clark

This week the Scottish Government published a consultation on its Land Rights and Responsibilities Policy Statement.

While the intentions behind these reforms may be noble, the expected changes outlined in the First Minister’s programme for government speech last Wednesday fail to address some of the countryside’s biggest challenges and could damage the rural economy.

Improving social justice and encouraging a more vibrant rural economy are excellent ambitions, but how to meet them has to be carefully thought out if the opposite effect is to be avoided.

Scottish farmers operate in a market where being paid for what they produce is often barely connected to the profitability of their business, so dependent on payments made through the Common Agricultural Policy have we become.

In an industry which should be an archetypal primary producer, and where the excellence of Scottish produce is widely recognised, the disconnect between what consumers pay and farm-gate prices must worry not just farmers but all of us.

Major reform of support mechanisms for agriculture should perhaps be considered more important than reform of land tenure.

Encouraging new entrants into farming would not be helped by introducing an absolute right to buy for some classes of agricultural tenants.

If those renting property in the housing and commercial property sectors suddenly found themselves having the right to purchase, at a discounted rate, and at a time of their choosing the property they currently occupy, confidence in these areas would be destroyed as landlords watch their assets crash in value.

Why should such a situation be proposed for farming?

There are those who believe this is a price worth paying, but the economic implications are potentially serious.

What Scottish farming really needs is an agricultural tenancy system fit for the 21st century, encouraging sound business relationships benefiting tenant and landlord.

Productive forestry is less reliant on direct grant support and is a great Scottish success story, to be encouraged and built upon rather than changed by radical land reform.

Our world-class, modern processing industries and the whole infrastructure of professional contractors and managers working in forestry require large scale in order to operate efficiently and compete with imports. They would not be assisted by the breaking up of large land holdings, or by increasing the tax burden on property.

Large parts of our uplands are unsuitable for agriculture or forestry, and much of this is held by estates where management of deer, grouse and the environment provide both employment and sources of income.

Some say this is an undesirable state of affairs; many of us beg to differ, and the proposed withdrawal of business rate exemptions for shooting and deerstalking could put jobs in fragile rural communities in jeopardy.

Money raised by this move is intended to increase the Scottish Land Fund from £3 million at present to £10m per year from 2016-20.

Community ownership holds a range of potential attractions but, before setting ever-more ambitious targets, it must be sensible to conduct a dispassionate review of existing community projects.

There would be much to gain, not only in helping promote and encourage best practice, but also avoiding pitfalls into which some of these schemes may have fallen.

Have the objectives of community ownership been met? Have business plans been followed? What are the costs to the tax payer?

The Scottish public, particularly the great majority living in urban communities, deserves to be given the facts, and hopefully the proposed Land Reform Commission will consider this as part of its work.

Many improvements to our rural landscape and business prospects could be achieved by shifting emphasis away from land reform towards updating existing mechanisms such as agricultural support fostering proper business relationships between farm tenants and landlords, and overhauling planning rules to promote rather than control desirable economic activity in the countryside.

We hope these points will be considered as the Land Reform Bill is taken forward for consultation.

* Finlay Clark is a partner with rural land agents Bidwells.