Landlord's Agents Should Take Note of Tough Times28 January 2013
UK - The Tenant Farmers Association is warning that many rural landlords and their agents are taking an unrealistic stance in current rent review negotiations.
Speaking earlier this month, TFA Chief Executive George Dunn said: "We have just been through one of the most difficult years in modern farming history. All sectors of agriculture have been hit both by spring droughts and an excess of rain and floods in the summer and autumn.
"The effects of the poor weather in 2012 will continue to have an impact well into this year and possibly beyond. There has been poor crop establishment across the country and feed and fodder continues to be a scarce and expensive resource.
"Against this extremely difficult backdrop it is a sad fact that there are a number of landlords’ agents continuing to live in cloud cuckoo land with regard to expectations of levels of rent achievable on current reviews.
"Output prices for some commodities, notably arable crops, are high but this reflects a shortage of both quantity and quality of available supplies now and expected supplies following next harvest. Input prices too are very high which, taken together with the quality and quantity issues, have caused farm margins to be squeezed to negligible or non-existent levels,” said Mr Dunn.
"Things are not much better on the livestock side with recent increases in milk prices paid to producers barely keeping up with costs of production if at all, lamb prices in the doldrums and returns in the beef, white meat and egg sectors continuing to be under pressure," said Mr Dunn.
"Tenant farmers would much rather be making good profits and paying good rents to their landlords as a result. However landlords must accept that in tough times the ability of tenants to pay increased rents will be severely limited. With the high costs of pursuing rent reviews to all sides the TFA hopes that common sense will prevail.
"However, we cannot rule out some rents having to be settled by arbitration and those of our members with our Farm Business Protector Insurance will at least be able to use that to defray the costs of arbitration where the landlords pursue an unrealistic line in rent review negotiations,” concluded Mr Dunn.