Introduction 

The Rock Review, produced by the Tenancy Working Group, was published on 13 October 2022 after being commissioned by DEFRA in January. Tenants will welcome its publication in a period of uncertainty, largely caused by rising input costs, looming rent reviews and tenant farmers facing multiple barriers to accessing government schemes. For landlords, the publication highlights the challenges that lie ahead in meeting increased demand for greater flexibility and rights for tenant farmers.  

The Rock Review makes over 70 detailed recommendations aimed at creating a more resilient and thriving tenanted sector that can deliver sustainable food production, meet the challenges of climate change and deliver improvement and enhancement of biodiversity.

Immediate recommendations 

The key theme underpinning actions requiring immediate attention is the introduction of the Environmental Land Management (ELM) schemes and how these will take effect in practice for both tenant farmers and landlords. With nearly two thirds of England’s farmland being occupied by tenant farmers, the review highlights the need for the ELM schemes to be accessible to tenanted farms and to provide greater opportunities for tenant farmers to access funding. There has been recent uncertainty in the media surrounding the future of the ELM schemes and so the recommendations for immediate action and clarification are likely to be welcomed by both tenant farmers and landlords alike.

Long-term recommendations 

The longer-term recommendations include proposed changes to how landlords and tenants enter into tenancy agreements and the legislative background that underpins such agreements. The aim appears to be to create a more collaborative and flexible starting point to ensure fairness between the parties, and ultimately more successful and long-term relationships. As Agricultural Holdings Act tenancies are replaced by Farm Business Tenancies (FBTs) over time, the Rock Review highlights the need for the legislation to be updated to reflect the fact that land is not just required for food production but also to deliver improved biodiversity and water quality and to drive adaptation to climate change.  

The Rock Review sets out ambitions for tenants to have increased opportunities to diversify their businesses and to access a wider range of schemes. The review also recommends increasing the average length of FBTs to over 8 years by providing tax incentives for landlords.

However, landlords are likely to be wary of the recommendation for 100% APR only being available for FBTs of at least 8 years or more, particularly if they are cautious of entering into long term arrangements due to current uncertainty in the market. Landlords also still require more clarity around whether land under the new ELM schemes will be classified as ‘agricultural’ or ‘environmental’ in relation to Agricultural Property Relief (APR) available on let land. 

Conclusion 

In order to achieve both the immediate and longer-term outcomes sought by the Rock Review, improving the landlord and tenant relationship appears to be of key importance. The Rock Review concludes that if there is one take-away message, it is that the landlord and tenant relationship must be seen as a mutually beneficial one. The idea is that both parties will thrive more where tenants are given sufficient rights to be encouraged to invest and seek to innovate in their practices, yet landlords are able to retain sufficient flexibility and control over their land to ensure that land remains available for the tenanted sector to grow. What will be important is ensuring that the balance is not tipped too far either way, and that the confidence of landlords is maintained to encourage longer term lettings and continued collaboration.

DEFRA secretary Ranil Jayawardena has confirmed that the Government will be reviewing the recommendations set out in the Rock Review and no doubt landowners and tenant farmers will await the Government’s response with interest.