Farm rents increase by three per cent

The average cost of renting agricultural land has risen three per cent since last year, new figures show.

Scotland’s Chief Statistician today released the latest figures on Tenanted Agricultural Land in Scotland.

Average rent for land was £39 per hectare in 2014/15 compared to £38 per hectare the previous year. The increase was 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.

Since most rents are reviewed only every three years, this implies that, where there have been increases, they have been, on average, well above three per cent. Rent increases have been above inflation since 2008.

Rents were highest in Fife and the Lothians, with three quarters paying over £75 per hectare. They were lowest in Shetland and Na h-Eileanan Siar, where half of rents were less than £3 per hectare.

Analysis of the results of the Farm Accounts Survey suggest that there was no clear link between profitability and whether a farm is wholly owned or wholly rented. The figures released were produced by independent statistical staff, free from any political interference, in accordance with professional standards set out in the Code of Practice for Official Statistics.

Gemma Thomson, NFU Scotland’s Legal and Technical Policy Manager 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 re 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.”