In an attempt to encourage longer term agreements and increased productivity, the Republic of Ireland has adopted an approach which increases income tax reliefs for farmland lettings of more than 5 years.
As a result, farmland area let in the Republic of Ireland increased from 2% in 2011 to 7% in 2017. Following the scheme, approximately 450,000 acres were let under new agreements between 2015 and 2017, and Ireland now has more letting agreements than Great Britain which are longer than 5 years duration.
Farm Business Tenancy agreements significantly contribute to Wales’ agricultural sector - Welsh Government figures show that 9% of holdings that applied for BPS in 2018 were wholly tenanted whilst 39% were mixed ownership. However, the Farm Business Survey (FBS) estimates that 35% of rental agreements in 2017-18 were for less than 12 months and the FUW believes that the positive impact of tax relief in Ireland could be seen as a lesson for the UK.
The FUW continues to lobby for greater support for tenant farmers. The Sustainable Farming and our Land consultation considers the importance of ensuring that tenants can access the new ‘public goods’ derived scheme, but there remains uncertainty as to how those with shorter tenancy agreements could receive payments for implementing long-term actions. The FUW will be responding to this consultation in due course and will ensure that, amongst the number of issues facing the sector, the particular issues facing tenant farmers are fully recognised.