Small landholdings in Scotland: legislation review

Recommendations & Conclusions

Options for a Way Forward

159. This review of the legislation governing small landholdings raises a variety of issues, some related specifically to the legislation itself and some not. As the legislation is not well understood, some issues arise from misunderstandings. The obvious wider question raised relates to what the role of small landholdings is, or could be, in the modern agricultural sector and how they should be treated. At the present time they do not appear to be an attractive option for potential small landholders but that is not to say that they could not be.

160. We have identified 3 broad options for a way forward:

• Retain status quo;
• Alter small landholdings status by converting them into other forms of agricultural tenancy; or
• Reform and modernise small landholdings.

Retain status quo:

161. If nothing is done to change the position of small landholders, it seems likely that the number of small landholdings will diminish yet further and they may cease to exist altogether. In our discussions with small landholders, a significant proportion appeared to be elderly, and it was not clear whether or not succession issues had been addressed.

162. Any legislative change is likely to be extremely resource intensive, given the complexities of the existing legislation and the issues that would have to be considered. However, Parliamentary committees ( RACCE ^[113] and REC ^[114] ) have expressed an interest in this. It is worth noting that some small landholders have told us that they have good relationships with their landlords and no desire for change although there were those that did have issues and did not want legislative change to give any more powers to landlords than they already have. Some small landholders also felt that landlords and agents focussed on their own interests to the detriment of the wider community.

Alter small landholdings status by converting them into other forms of agricultural tenancies:

163. Small landholdings share some characteristics with both secure 1991 Act tenancies and crofts. Converting them to either of these systems, or possibly different types of agricultural tenancy, could address some of the issues that have been raised. The possibility of conversion to crofts in particular has been a subject of interest to the REC Committee recently (see section on conversion to other types of tenancies). However, whether conversion to another form of agricultural tenancy is possible is something that requires further consideration and analysis.

164. It is not clear that stakeholders would welcome this - in our consultation, significant numbers of small landholders did not want to be converted. Some have concerns that such a process might affect their security of tenure, and whilst they might welcome some elements associated with other forms of agricultural tenancy, they might not be prepared to accept other elements such as added responsibilities that they would acquire. Careful consideration of the impacts of conversion on the landlords would also be essential.

Reform and modernise the small landholding sector:

165. The clear message from our consultation was that the key issues are:

• Clarity of legislation (all respondents (small holders and landlords): A large scale revision, modernisation and consolidation of small landholdings legislation could provide additional clarity. Though this would be a lengthy process requiring primary legislation and would require significant resource. A clearer picture of how small landholdings were created is required, and an option could be to commission research into this area, focussing on ownership of small landholdings and the individual circumstances in which they were established. This research could also consider whether a modern administrative register of small landholdings could be established. Even a light touch modernisation covering key areas such as assignation and succession, diversification, compensation for improvements and resumption would be a very significant undertaking and would not address the issue that clarity is required now. To assist with the understanding of existing legislation at this time, an option could be to commission a guide on the existing law applying to small landholdings. This could assist with the understanding of a number of issues ( i.e. around security of tenure, rights and responsibilities of each party, rent etc).
• Right to buy (13 respondents to the written consultation mentioned this topic): This is a difficult and complex area. Providing small landholders with any form of right to buy raises significant issues that would need to be explored in depth, and further careful consideration is necessary. It should be noted that, despite it being a request of small landholders, introduction of a right to buy could affect the existence of small landholdings. If a pre-emptive right to buy small landholdings was introduced and exercised, it is possible that the numbers would diminish even further from today's low levels.

166. In addition to these issues, consideration could be given to possible methods designed to address some of the other points raised in the consultation.

167. In particular, having recourse to a representative body could resolve some of the issues raised by stakeholders. Consideration could be given as to whether small landholdings could be included within the remit of either the Crofting Commission or the Tenant Farming Commissioner. A representative body could potentially be a source of guidance, advice, support and dispute resolution, without requiring recourse to the courts. In addition, mechanisms already exist to provide advice and guidance on a variety of matters not specifically related to small landholdings, which small landholders could access.

Conclusions

168. Small landholdings are a part of our Scottish agricultural heritage and Scottish Ministers are mindful of their unique status.

169. From the point of view of retaining diversity within the sector, it makes sense for small landholdings to remain, and it then follows that they must be reformed and modernised. However, this is not a straightforward matter and serious consideration must be given to the issues arising, not least around the ECHR rights of all parties involved.

170. Based on the consultation we have conducted and the review of small landholdings legislation, we will:

• Commission an independent legal expert to write a guide to the legislation.
• Commission additional research on smallholdings to:
  • Review the historical changes to small landholdings ownership, including identifying estates and landlords of the land subject to small landholding tenure and any government support provided to those estates to encourage the creation and establishment of small landholdings and Statutory Small Tenancies, and consider the feasibility of establishing a modern administrative register of small landholdings.
  • Assess the socio-economic benefits of small landholding to rural Scotland including comparison to other types of agricultural tenancies and potential opportunities to develop small landholdings with public and private landlords.
• Keep under review the possibility of requesting the Scottish Law Commission to review the law on small landholdings and to recommend reforms.
• Keep under review the issues surrounding right to buy in the context of small landholdings.
• Consider further whether small landholdings could be included within the remit of either the Crofting Commission or the Tenant Farming Commissioner.
• Review current grant schemes available to small landholders, including consideration of take up rates, use of the farm advisory service and consider any constraints around borrowing faced by small landholders when compared to crofters and other areas of the agricultural sector.
• Ensure that small landholders are included in the Farm Advisory Service provision to small farms on succession planning.
• Maintain a Scottish Government web page for small landholders, providing them with a resource that will point them towards advice and support on a wide range of agricultural issues.