Review of Scotland’s Starter Farm Initiative – Tenant Perspectives

To help address the lack the opportunities for new entrants to farming in Scotland,
Forestry and Land Scotland made 9 Starter Farm Units available to new entrants between
2012 and 2015. These, together with a further Starter Farm Unit made available by the
Scottish Government’s Rural Payments and Inspection Division, formed part of a wider
Scottish Government initiative operating under the auspices of the Farming
Opportunities for New Entrants (FONE) Group. The wider FONE initiative aimed to
increase opportunities for new entrants on publicly owned land.
• All starter units were part-time in nature and tenants were given 10-year leases, with a 3-
year extension provided due to the landlord instigating a strategic review of their Starter
Farms.
• This research provides an evaluation of the Starter Farm tenant’s perception of the
initiative to feedback to the Scottish Government and the FONE group. 8 of 10 tenants
were interviewed following a semi-structured interview process in summer 2022.
• The application process for leases was competitive with 77 total applications for the
leases. All tenants interviewed had agricultural work experience, but none had a family
opportunity to enter a farming business through succession or partnership. For many, the
first step on the farming ladder came prior to the tenancy through agricultural
contracting / seasonal lets / farm management roles.
• The main objectives for taking on the tenancy were to run a farm business, have an
opportunity for progression, and wanting to build a business and have security. Initial
expectations had largely been met, except for the tenancy acting as a stepping stone to
another lease / ownership. Many alluded to having greater personal satisfaction because
of their starter farm experience than in their previous roles, although they may now carry
more financial concerns.
• On average, the tenants reported initial expected capital needs of c. £39k but generally
had to spend considerably more. Funds were secured from loans, savings, overdrafts,
livestock markets, and in some instances family members. Tenants had generally built-up
fixed assets they would form the basis of any future tenancy / ownership opportunities –
breeding livestock, tractors, machinery and equipment.
• Not all tenants were eligible for the full range of agricultural support payments at the
outset of their lease. This was perceived to put them at a disadvantage in the industry.
Moreover some believed that agri-environment climate scheme opportunities have been
limited due to 5-year commitments and application rounds falling within 5-years of the
initial lease termination date.
• The tenants have generally improved their personal and business skills through their
experiences from the starter farm – and other business activities they undertake. The
skills reported to have developed the most as a result of the tenancy included financial
management, leadership, decision making, business confidence, marketing, and business
and personal resilience skills.
• Nearly all of interviewees reported that they were ‘emotionally invested’ in the starter
farm, treating it as if it were their own. Many felt fully embedded in their local
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community through working and contract relationships with other local farmers,
employing local people, children attending local schools, participating in and supporting
local events, etc. That embeddedness (particularly where farm households are reliant on
local off-farm income streams likely means that modern ties to part-time tenancies are
stronger than historically where tenants may have been more mobile.
• Whilst, on average, there was relatively high scoring of landlord-tenant relationships
some of the tenants reported the relationship had deteriorated over the duration of the
tenancy. Many of the tenants suggested this was a consequence of changes in landlord
personnel, and landlord communication style. Noting the potential for ‘negativity bias’
the tenants generally felt that their landlord had not been particularly helpful with capital
investments and improvements to the holding / buildings.
• Whilst the strategic review 3-year extension to leases was generally well received the
landlords were criticised for poor communications regarding lease terminations and
rumours of possible tenancy extensions / recycling or sale of the units / that appeared to
suggest different long-term opportunities amongst tenants. Specifically, clarity on the
longer-term objectives of the landlord for the land was requested.
• As a result of the strategic review related extension all tenants had time left on their
leases, one tenant had given notice (at time of interview) as they had taken on a larger
unit.
• Only one tenant was confident that they would have been farming without the starter
farm initiative and all tenants wanted to continue farming after their starter farm
tenancy ends - one has now successfully moved up the farming ladder into a new
tenancy. Half the tenants had applied for other tenancy opportunities, often being
outbid on offered rents. There was an undertone that both the Scottish Government and
the industry could do more to provide opportunities for the starter farmers – including
through initiative like the land matching service.
• The majority of tenants would encourage other potential new entrants to take on a
starter farm, and some even expressed that they would offer support to mentor new
tenants – if the initiative was to continue.