ANGUS McCall of the Scottish Tenant Farmers Association (STFA) has described claims by Scottish Land & Estates (SL&E) that rural estate owners are investing an average of £69,000 per year on their tenanted farms and crofts as "incredulous".
The figure comes from a study commissioned by SL&E, which represents over 2000 landowners and rural businesses in Scotland, and undertaken by Rural Solutions and Scotland's Rural College (SRUC). A questionnaire was sent out to 1500 SL&E members.
There were 277 responses (a rate of 18%), of which 143 were involved in letting farms with an average of 11 tenants per estate and an average tenanted holding of 221 hectares. That produced data on 1538 farm tenancies, 23% of the Scottish total.
Total annual expenditure on the 143 estates amounted to £10.2m, primarily on repairs and capital costs - equating to £26.58 per hectare and an average total expenditure per tenant of £6286.
The tenancies generate average rental income of £38.99 per hectare with expenditure running at £26.58 per hectare. Repairs, improvements and capital works account for £6.65m with staff costs amounting to £3.5m.
The study found that while tenant farming is profitable for the majority of estates, the exception is very large estates (25,000 hectares and above) where earnings on tenanted farms are £25 per hectare compared with £39 for other estates. These earnings are insufficient to cover average expenditure of £26.58 per hectare.
Douglas McAdam, chief executive of SL&E, said the data showed members are investing and added: "Our members are willing to invest further if we create a stable climate that encourages investment. These are averages and investment does of course vary and whilst lower investment exists on some holdings - and the reasons for this need to be studied - it is clear from the survey it is normal practice amongst many landowners to invest a very substantial proportion of rental back into farms."
Mr McCall said: "It would be interesting to see where this investment has taken place and we look forward to SL&E sharing the data with us. Landlords' reluctance to invest in tenanted farms has been an abiding concern for at least the last 20 years and the evidence is plain to see on many estates.
"These results fly in the face of experience reinforced by the STFA members' survey where 46% said their landlords had made no investment in their tenanted farms over the last 20 years. We remain sceptical."
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