Scotland’s Tenant Farming Commissioner (TFC), Bob McIntosh, has published a Guide to Tree Planting on Tenanted Agricultural Holdings. The TFC has been in post since April 2017 and he has a number of different roles, all aimed at improving relations between landlords and tenants. One of his key tasks is to prepare codes of practice – and the tree planting guide is his latest publication.
The Scottish Government is focused on increasing woodland in Scotland (expansion of forest and woodland being a priority in terms of the new Scottish Forestry Strategy, reported on by us here) and more farmers and landowners are considering the pros and cons of woodland creation. The tree planting guide provides information for landlords and tenants who might be considering planting trees on tenanted farms.
The guide explains how a tenant of a secure tenancy or a limited duration tenancy who wants to use the land for the non-agricultural purpose of tree planting can do so, by using the statutory ability to diversify available to them in terms of Section 39-42 of the Agricultural Holdings (Scotland) Act 2003. Diversification for tree planting requires the landlord’s specific consent (as compared to other diversifications – see our refresher here – where lack of objection from the landlord can be sufficient to entitle the tenant to proceed). However, if the landlord refuses consent, the tenant can apply to the Land Court for consent. Further details of the diversification process, including detail on what might be considered reasonable grounds for landlords to withhold consent to planting, are set out in the guide,.
Although the process is available to Limited Duration tenants (and latterly Modern Limited Duration tenants), these leases tend not to be granted for a sufficiently long duration to grow traditional timber crops to the point of harvest. However, even within a fixed term tenancy, there may be opportunities, for example short rotation coppicing, for use in connection with biomass heating systems.
On the termination of the lease, either the tenant or the landlord could be entitled to compensation from the other – depending if the planting has increased or decreased the value of the land. If the tenant were to quit the holding when the trees are still pre-harvesting age, given that the cost of returning the land to agriculture could be significant, the guide acknowledges the important fact that the tenant may find that they have to pay compensation to landlord at the end of the lease.
The guide also acknowledges that a landlord may use the power to resume land from the tenancy (if that is available to them in the lease) in order to take back land to plant forestry.
While it has been criticised by some as doing little to mitigate tenant farmers’ suspicions of forestry, for those considering planting trees on tenanted agricultural holdings, the guide is certainly worth a read.