County council farm tenancies – still an option?

County council farms have been in decline for decades, but they still provide a valuable foothold for new entrants to the industry.

It’s a Catch-22 situation. Young farmers trying to secure their first tenancy often get turned away because they haven’t got experience of running their own farm. So how can they take that first step on the ladder?

For more than 100 years, county council farms have provided an answer. Established in the 1890s to offer opportunities for young people to enter agriculture, the initiative really took off after the First World War, amid concern over food security and a desire to provide a livelihood for returning soldiers.

Since then, new entrants have been able to start out on a council smallholding, and gradually build both their business and experience.

“With the capital requirements of agriculture, it is one of the most difficult industries to enter,” says George Dunn, chief executive at the Tenant Farmers Association.

“Tenancies offer a very effective way of bringing in new entrants and sustaining businesses into the long term. The county council farm structure has provided a major contribution to this.”

By 1926 the county farms estate had reached 177,265ha with 29,532 holdings. However, the Agriculture Act 1970 demanded a reorganisation of the estate, leading to the consolidation and enlarging of existing holdings – a process that has continued ever since, ensuring farms are of a viable size in modern-day agriculture.

Sell-off

Unfortunately, the recent recession sparked a rapid sell-off by some councils, keen to fill the deep holes in their budgets.
 
In 2010, Somerset County Council decided to sell off two-thirds of its 60 tenanted farms, despite strong opposition from stakeholders – so far 17 have been sold.

A year later, Gloucestershire County Council followed suit, approving the sale of 43% of its tenanted farms in a bid to raise £125m in capital receipts. North Yorkshire is pursuing a similar route as each of its 48 farms becomes vacant.

Since 1964, the council farms estate across England and Wales has shrunk by 37%, to 111,650ha by 2012. Average holding size increased from 10.9ha to 32ha, meaning total holding numbers fell by a whopping 79% to just 3,442.

Of course, that means considerably fewer opportunities for new entrants to get that important first foothold on the farming ladder. But it’s not all bad news.

Investment

Some councils are actively investing in their estates, and last year county farms generated an operational surplus of more than £13m for the public purse (not including capital receipts).

Cambridgeshire County Council has the largest farms estate in the country, with 216 tenants across 13,765ha. “There are lots of benefits,” says rural estate manager John Macmillan.

“It’s financially very worthwhile, but the farms and tenants are also an important part of the rural community. We also provide permissive access to the public, and a lot of environmental benefits.”

In 1990, Cambridge council’s estate was valued at £60m. Last year it generated rental income of £3.7m, with a surplus of £2.5m.

“Councils are interested in steady revenues to support their services,” says Mr Macmillan. “And capital receipts from sales of land with high development value have averaged £3m a year over the past 10 years, so it’s a very good return on investment.”

The money raised is used to pay for council services and to keep council tax down.

This year, the council has advertised 13 farm tenancies, and over the past decade it has given 80 new entrants their first step on the farming ladder. “If we get a good tenant they may stay on the estate for their whole career,” he adds.

The average farm size on the estate is about 100ha, but two farms run up to 283ha – and many tenants also take on extra land from private landlords in the area, he adds.

“Most tenants have some form of diversification, whether that is contracting or running a separate rural business. Our policy is one of retention, and we are investing in the farm buildings, houses and reservoirs to improve returns in the long-run.”

Robin Edwards, south-east regional director of the CLA, spent eight years running Hampshire County Council’s farms. And over that time the council actually increased its land holding and its average farm size.

“The council was very keen to retain the 12 dairy farms and invested in infrastructure for Nitrate Vulnerable Zone compliance,” he says.

Expansion

But one of the most difficult issues for council tenants is how to expand, adds Mr Edwards. “Unless you have a viable unit you can’t build up enough capital to grow – and moving from 120 cows with a husband and wife team to 300 cows and a herdsman is a big jump. That said, there are a number of people who’ve gone on to grow large successful businesses.”

Sadly, those opportunities are diminishing. According to DEFRA’s annual smallholdings report; Sussex, Buckinghamshire and Kent have disposed of almost all their county farms, with very few left in Northumberland, Lancashire, Essex or Nottinghamshire.

In Wales, council holdings have remained relatively stable, with Powys having the largest estate at 4543ha. “However, budget cuts are leading to more holdings being sold off,” says Andrew Gurney, land use policy officer at the FUW.

Limited opportunities

Northern Ireland does not have county council farms, and in Scotland most farms were sold off many years ago, leaving new entrants with either the private sector or crofting, says Sarah Anderson from NFU Scotland. “Most of the croft land is common grazing – although the Forestry Commission has established a few starter units for young farmers over the past couple of years.”

With councils under such financial pressure, it is understandable that they are seeking to consolidate their holdings, says Louise Staples, rural surveyor at the NFU. “But once those farms are sold, they’re gone forever. Thankfully, sales have slowed slightly in the past year, and councils are more open to working with us and other stakeholders to keep the farms on.”

Tight budgets have also led to higher rents being charged, with some councils trying to shift their maintenance obligations onto the tenants, she adds. “Not only are tenants having to pay high rents but they’re also incurring capital expenditure as well. And because there are far more people who want farms than there are farms available, there’s always someone who’s prepared to pay up.”

Charles Leadbetter has been a tenant at Mill Farm, Somersham, Cambridgeshire, for the past eight years, and has built up a successful business over that time. Formerly an agricultural contractor, he had rented various small parcels of land, but failed to secure a farm tenancy due to his lack of credentials.

“My father’s a farmer but I couldn’t work with him so left home at 18 with £400 and a Ford Orion car,” he says. “I worked seven days a week for other farmers and saved up every penny. Then when the council farm came up, it was the best thing that had ever happened.”

Initially taking on 118ha, Charles then bought and rented more little parcels of land, and now runs 890ha of arable land and 121ha of grassland with his fiancée. “We would never have managed to get here without the council farm; it’s an essential part of the curriculum vitae,” he says. “Over the next few years I hope to double in size again. Farming is all I’ve ever wanted to do.”

Case studies

Charles Leadbetter

Charles Leadbetter has been a tenant at Mill Farm, Somersham, Cambridgeshire, for the past eight years, and has built up a successful business over that time. Formerly an agricultural contractor, he had rented various small parcels of land, but failed to secure a farm tenancy due to his lack of credentials.

“My father’s a farmer but I couldn’t work with him so left home at 18 with £400 and a Ford Orion car,” he says. “I worked seven days a week for other farmers and saved up every penny. Then when the council farm came up, it was the best thing that had ever happened.”

Initially taking on 118ha, Charles then bought and rented more little parcels of land, and now runs 890ha of arable land and 121ha of grassland with his fiancée. “We would never have managed to get here without the council farm; it’s an essential part of the curriculum vitae,” he says. “Over the next few years I hope to double in size again. Farming is all I’ve ever wanted to do.”

Liz and Marcus Warner

Liz and Marcus Warner took on their first tenancy at Lower Henland Farm, Kentisbeare, Devon, last September. Although neither were from farming families, Marcus had run a contracting business for 10 years, while Liz had worked in the egg industry.

“We were renting 12ha in Gloucestershire and kept some sheep, but wanted our own farm, so we kept an eye out for county council tenancies,” says Liz. “We looked at a lot of places and applied for a few that suited what we wanted to do – and were successful on our second application after just a year of looking.”

The couple keep 5,000 laying quail and rear batches of 60 calves on a Blade contract, as well as running 150 ewes on the 73ha farm, which includes 27ha of arable land. “We wanted something that would produce cash flow immediately, on a holding that we could expand into,” says Marcus. “We were very lucky to get a council farm – they provide a very good entry into the industry.”

For more information on taking the first steps into a council tenancy contact the Tenant Farmers Association Phone: 0118 930 6130 Email: tfa@tfa.org.uk

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