Tenant farmers should start to reconsider their rent levels in accordance with future industry changes and their impact on cashflow, industry has said.
Speaking at an NFU tenant webinar, tenants chairman Chris Cardell encouraged farmers to examine the affordability of their current rent levels when approaching rent reviews in light of the Basic Payment Scheme (BPS) phase-out beginning in 2021 and Environment and Land Management scheme (ELMS) starting at its earliest in 2024.
Mr Cardell said: “Not everyone has realised the implications of what is coming. BPS is going and it is unclear when ELMS will come into fruition.
"It is important to think about what might be coming down the road and take that into consideration when going through rent reviews and determining what is affordable.”
Mr Cardell also called on tenant farmers to be careful going forward, since wording for new environmental schemes may not match existing tenancy agreements.
He added: “Some of these new schemes do not fit word for word to tenancy agreements. Old terminology, such as best farming practise, does not match extending hedgerows, so you need to be careful about any agreement pitfalls.
“There will no doubt be opportunities within ELMS and carbon sequestration for tenant farmers and landowners.
"But the active farmer delivering the work and managing the land daily must be the one rewarded.
“It is important to have discussions about participation in new environmental schemes and carbon offsetting with your landowner to clearly outline terms and the role you will play in delivering them.”