UK: ‘Beware contract traps on subsidy,’ says Tenant Farmers’ Association

George Dunn, Chief Executive of the Tenant Farmers Association
EADT 29.1.11

George Dunn, Chief Executive of the Tenant Farmers Association EADT 29.1.11 - Credit: Archant

TENANT farmers could lose out on farm subsidy payments under new agreements with clauses depriving them of Single Farm Payments (SFP), a body warns.

The Tenant Farmers Association is warning all tenant farmers to watch out for traps in new tenancy agreements and other papers and not sign away vital support payments. Chief executive George Dunn said “Increasingly the TFA is seeing new tenancy agreements containing clauses seeking to deprive tenants of their existing and future entitlements to SFPs for little or no compensation in return. Unsuspecting tenants who are glad to have the opportunity of farming additional land may fall unsuspectingly into these traps if they do not take advice.”

“It is important that tenants read carefully through any document they are asked to sign and seek advice from the TFA or a professional adviser before completing any new agreement.”

“The concern is heightened as there are now a number of standard farm tenancy agreements doing the rounds which have these alarming clauses within them.

“Such clauses are in direct contravention of guidance issued by the Tenancy Reform Industry Group in 2004 which made it clear that it would be considered ‘unfair if the individual to whom entitlement had been allocated were required by a clause in the agreement to give it up for little or no consideration in comparison to its value’.

“The TFA would urge all professionals advising landlords not to include clauses in agreements with tenant farmers which seek to harvest the benefit of support through the CAP for the landlords benefit,” said Mr Dunn.

“With all the uncertainty surrounding the current process of reform to the CAP it would be very easy for individuals to sign up agreements which they later find particularly disadvantageous. This increases the need for tenants to ensure they are obtaining objective advice before signing agreements.”

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