Forestry And Agriculture Need Not Be At Loggerheads

• Published date: 08 April 2022
• Subject Matter: Real Estate and Construction, Land Law & Agriculture, Landlord & Tenant - Leases
• Law Firm: Shepherd and Wedderburn LLP
• Author: Mr Hamish Lean

There is concern the race to achieve carbon net-zero is leading to the loss of productive agricultural land to forestry. Investors recognise land with planting potential as an excellent investment, which has had a distorting effect on land values.

To some extent, this is simply the operation of market forces. A landowner with an unprofitable farming business may well be tempted to sell land to a forestry investor and there are no restrictions on their ability to do so. It would require government intervention in a fundamental way to prevent the market operating like this.

The Scottish Land Commission (SLC) is undertaking a review of the rural land market to understand the influence of carbon and natural carbon in relation to land transactions. The keenly awaited report will be published in the spring.

Concerns have also been expressed on behalf of the tenanted sector that landlords might seek to terminate tenancies, or resume land from tenancies, for planting.

Tenants have a certain amount of protection against this. Under a secure tenancy, a landlord will only be able to resume a relatively small amount of land as the Land Court will not allow resumption if its effect is to materially prejudice the viability of the remainder of the farm. It is possible to bring a secure tenancy to an end with a notice to quit where planning permission exists over the whole of a farm for a non-agricultural purpose.

However, planning permission is not required for planting trees, therefore this route is unavailable to the landlord. In a fixed duration tenancy, the landlord does have a statutory right to resume part or the whole of the farm but, once again, this can...