Addressing the perceived failings of short-term land occupation

Land occupation agreements are increasingly becoming short-term: the average length of a Farm Business Tenancy being just over 3 years for bare land. This means our most valuable asset, the land and soils which we rely upon to supply food, is progressively coming under strain.

The ‘rape and pillage’ scenario has long been associated with short-term tenancies. High rents are paid and no, or little inputs are applied resulting in soil degradation and weed infestation. Too often we witness insignificant investment in resources by the occupier combined with the maximum extraction of the ‘goodness’ of the land. Landowners focus too heavily on short-term financial gain resulting in the long-term wellbeing of their underlying asset suffering. New entrants or the next generation find it more difficult to get their ‘foot on the ladder’ when short-term agreements are offered.

The primary goal of this report is to address such weaknesses, and in doing so, understand whether it is the length of the agreement that is the root cause or if there are other influencing factors, such as tax and capital, or our culture and our outlook. As a practicing rural surveyor, I was also keen to explore what role my profession has in influencing the structural makeup of land tenure agreements.

I visited France and The Netherlands, where protective tenancy legislation strictly governs the operation of land tenure arrangements; Brazil, Uruguay and Argentina to understand their relationship with soil and their strong devotion to improving its health; and New Zealand, where a range of land tenure models are adopted. I also had a desire to understand the Maori culture, and their long-term approach linking people, relationships and land.

Within all countries, I found strong concerns about short-term occupation and seen potential mechanisms to address them but concluded that the duration of an agreement in itself is not the issue. Instead it is short-term thinking in farming businesses that is the real sin and this directly impacts the vitality of soil health and wellbeing; and diminishes the underlying assets long-term value.

The farming sector, and professional advisors in particular, need to broaden their outlook and be more imaginative when it comes to land tenure options. The whole spectrum of land partnership models should be considered and in doing so, both the landowner and occupier should have aligned objectives, common goals and a clear vision. Professional advisors need to also have a more informed understanding of soil health and wellbeing. The removal of unnecessary regulatory barriers and changes to certain capital taxation reliefs would also help drive longer term planning.

A good strong relationship driving longer term interaction between a landowner and occupier based on trust, accountability and commitment is absolutely key. Without doubt, both parties should give due thought to their triple bottom line and address it, if they, their business and their assets are to be considered truly sustainable. C