A. McKee, 16th March 2018

TARRN 2018 – Think-Piece– Annie McKee, The Institute

Future property ownership and the impact on rural sustainability

Introduction

Land is the ultimate resource, upon which all prospects for development and production are derived. The ownership and management of land are fundamental to society, and land tenure is said to ‘govern the relationship between people and the environment’ (Forbord et al., 2014). Land tenure is described as the complex ‘bundle’ of property rights (Munton, 2009), based on institutions and policies, which determine “how land and its resulting resources are accessed, who can benefit from these resources, for how long and under what conditions” (Robinson et al., 2014: 282). It is critical for society to evaluate and renegotiate the institutions of property ownership and use, and property rights are interconnected with the sustainability of rural areas. This think-piece aims to explore the emerging literature on, theory of and potential for new ways of property ownership and associated property rights (cf. Hodge and Adams, 2012; Wittman et al., 2017; Hoffman, 2018), and the implications of these shifts in perspective on property rights in resolving issues of inequality, social justice, and sustainability (i.e. economic, social, and environmental).

In particular, the think-piece will explore knowledge and understanding on progressive property rights theory, which promotes a norm of social obligation in property rights (Lovett, 2011; Rosser, 2013; Alexander et al., 2009) (Section 1). The think-piece will draw on learning regarding partial or ‘plastic’ property rights, where mutual cooperation is necessary to underpin successful outcomes from the land resource (Wolf, 2017; Roberts and McKee, 2015). This theoretical exploration will be grounded in illustrative examples from (Section 2), due to the ongoing process of land reform since Scottish devolution, and the establishment of the Scottish Parliament in 1999, providing an opportune and accessible case study1. In Scotland, land reform policy has been developed in order to deliver a “democratically accountable and transparent system of land rights and promotes fairness and social justice, environmental sustainability and economic prosperity” (McLeod, 2014 in , 2014: 1). The background to Scottish land reform policy is outlined in Section 2. This think-piece will draw on research commissioned by the Scottish Land Commission to increase land ownership diversity and reduce the concentration of private ownership, through adopting new models for increasing land availability for new entrants to (Section 2.1). Concluding thoughts and personal reflection is provided in Section 3. Finally, the think-piece will raise questions for discussion on future research (Section 4).

1. Property rights theory: beyond private property

Land reform may be defined as the redistribution of rights to land to meet social, economic, environmental, and political demands, and the rebalancing of rights and responsibilities to facilitate a ‘healthy society and environment’ (Warren and McKee, 2011). The recent Land Reform (Scotland) Act 2016 (as described in the following section) includes measures that require landowners to demonstrate that their land management contributes to furthering the sustainable development of rural communities, providing greater opportunity for communities

1 It is also the case study most familiar to the author (as it is my home and the focus of all of my research to date), thus suggestions for international comparisons would be welcomed from the TARRN participants.

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A. McKee, 16th March 2018 to acquire land2, and new rights for tenant farmers. An overarching objective of this key legislation is to reduce the concentration of private landownership, and the measures in the Act may be considered as further challenging private property rights, emphasising the rights of tenants and previously disempowered rural, and urban, communities.

The aspirations of the Scottish policy makers with regard to social justice in the land governance system, encapsulated in the various land reform legislation (see Section 2), are closely aligned with those held by the progressive property law theorists, and described by Lovett as: “a long cherished vision of shared social interests in land” (2011: 742). The progressive property rights school describes an alternative to classical, exclusion-based theories of property (cf. Ostrom and Schlager, 1996). In particular, progressive property theory promotes a norm of social obligation in property rights, and the value of property rights to promote human flourishing, an equal and democratic society, and the protection of the natural and human environment for future generations (see Lovett, 2011; Rosser, 2013), thus:

“Rather than serving as platforms for self-regarding behaviour, property ownership and property law become the place for building community, not merely satisfying personal preferences” (Lovett, 2011: 746).

This collection of key property law thinkers3, as summarised by Lovett and Rosser, argue that property law is underpinned by relationships (i.e. between property owners, co-owners, landlord and tenant, owners and non-owners, plus owners and the state), which must be continually renegotiated in order to best meet the needs of all parties. Property rights, in this view, therefore enable both owners and non-owners to pursue their own objectives within ‘practices of social cooperation’ (Lovett, 2011: 744). Progressive property theory lends itself to greater political expression, with less focus on exclusion rights of private property; instead it “emphasises the other sticks in the bundle” (Rosser, 2013: 149). This collection of theoretical perspectives4 seeks to understand the “underlying values that property serves and the social relationships is shapes and reflects” (Alexander et al., 2009: 743). Efficiency is not considered the only metric by which to measure the success of property law.

Furthermore, in their ‘Statement of Progressive Property’, Alexander and colleagues explain that due to the need for human equality, “property laws should promote the ability of each person to obtain the material resources necessary for full social and political participation” (2009: 744). This view is underpinned by Lockean principles, asserting that ‘each person has an equal right to acquire property up to the point that it limits another’s ability to do so’ (Thompson, 2015; see also Vaughn, 1980) and the limitations of natural rights (i.e. moral principles) bound scale of land ownership to that of potential use (Vaughn, 1980).

In his recent paper, Hoffman (2018) describes the ‘classical liberal’ view of private property (specifically in the US), which creates a ‘sphere of personal liberty’, and the commodification of land as a result. In contrast, Hoffman highlights the reality of private property infringements

2 In addition to the extended powers in the Community Empowerment (Scotland) Act 2015. 3 Including Gregory Alexander, Eduardo Peñalver, Joseph Singer, Eric Freyfogle and Jedediah Purdy (Lovett, 2011). 4 The progressive property school includes the perspective of the ‘social obligation norm’ described by Gregory Alexander, ‘virtue ethics’ as outlined by Eduardo Peñalver, and ‘democratic estates’, as promoted by Joseph Singer (see Rosser, 2013).

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A. McKee, 16th March 2018 and the blurry boundaries between private and public goods (cf. Geisler, 2000 in Hoffman, 2018). As an alternative, he presents the perspective of ‘civic republicanism’ and the ‘proprietarian tradition’, thus: “the purpose of property is to promote good social order”, and that all property exists for the public good (Hoffman, 2018: 132). The proprietarian view maybe considered in close alignment with progressive property rights theories, in particular, the requirement for all of society to have the resources necessary to participate in social and political life (cf. Alexander et al., 2009). Further, Bryden and Geisler (2007) assert that property rights are a key component of community empowerment, and without which community participation is ‘hollow’ (see also Mc Morran et al., 2014; Skerratt, 2013). Property ownership allows participation in the public sphere, therefore the proprietarian view (in America at least) is grounded in the need for landownership diversity, as well as private property rights that are consistent with the public good.

Rosser (2013), however, is critical of perceived insufficient radicalism of the progressive property rights school, and argues that a shift in debate is necessary from what type of property law is considered ‘a good thing’ to consider how to deliver the aspired social outcomes, including equality, and social/environmental justice. Indeed, Hoffman (2018) describes a history of changing property rights in accordance with instrumentality, whilst Wolf (2017) highlights the role of pragmatism in leading to transformational change, such as the embedding of landownership, management, and transfer, in social and legal contexts. As demonstrated in Section 2, it may be argued that this underpins the trajectory of land reform actions and political objectives of the Scottish Government.

A key theme of the theoretical perspectives presented in this think-piece is the desire to shift land from its status as marketable commodity to community asset, in order to fulfil public good outcomes, including social justice and environmental sustainability. This local, communitarian view appears in parallel to the issues associated with the global land-grab and financialization of land (cf. van der Ploeg et al., 2015; Wolf, 2017), which is outwith the scope of this think-piece. Nonetheless, the potential arises to explore alternative models of land ownership or property rights disaggregation (i.e. ‘undoing the bundle’ of rights), into access, governance, and use rights, in order to achieve public good outcomes (cf. Hoffman, 2018). This exists in practice with regard to access rights (the so-called ‘right to roam’) in Scotland, and in the rights afforded to some agricultural tenants5, amongst other examples. In addition, there is a shift towards land being removed from the commodity market by landowners with social and environmental intentions, establishing governance arrangements to hold land in perpetuity and for the public good, not least the community landownership movement in Scotland (cf. Mc Morran et al., 2014; Skerratt, 2013). The model of land trusts (initiated by community groups, cooperatives, and non-governmental organisations6) also aims to decommodify and protect land (e.g. from financialization, urbanisation, etc.), in order to increase land access by new entrants to agriculture, and provide secure tenure (Wittman et al., 2017; Hodge and Adams, 2012).

5 For example, the assignation rights afforded to secure ’91 Act’ tenants, as described by Lean (2016): see footnote 9. Agricultural holdings and tenancy law in Scotland is complex and highly regulated; this example illustrates the rights of tenants to decide who can take over their tenancy on retirement, rather than the landowner making this decision. Similar intergenerational tenancy rights are afforded to tenants (i.e. small holders located in the ‘crofting counties’ of Scotland; see Shucksmith, 2008). 6 For example, the recently established ‘Scottish Farmland Trust’ aims to “increase access to land for small- scale, ecological agriculture by purchasing land to be held in trust and rented fairly to new entrants and young people” (SLFT, 2017).

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However, Hodge and Adams warn of the complexity of ‘messy hybrids’, and the role of ‘institutional blending’ in the neoliberalisation of rural land governance (2012). It is with this insight and theoretical perspective that this think-piece considers land reform in the Scottish context, as described in Section 2.

2. Shifting models of property ownership: Scottish land reform in progress

The rise of land reform on the political agenda following Scottish devolution in 1999 is commonly explained by traditions of anti-landlordism in Scottish politics since the late nineteenth century, and a ‘national guilty conscience’ about the (Cameron, 2001). In addition, and in part due to the endurance of feudal tenure (Mc Morran et al., 2014), the pattern of large-scale private land ownership in Scotland7 is believed to be one of the most concentrated in Europe, if not the world (cf. Wightman, 2010; McKee et al., 2013). In contrast to many other countries, the UK has no restrictions on who can buy land or the quantity of land purchased. Given the unusually high concentration of private landownership in Scotland, concerns have been raised regarding access to resources and rural socio-economic development, thus questioning the balance of power, management practice, and ultimately, accountability (see McKee, 2015; Chenevix-Trench and Philip, 2001).

The Land Reform (Scotland) Act 2003 was one of the primary political objectives of the new Scottish Parliament, driven by the manifesto promises of the Labour government on its election in 1997, and the proposals of the then government’s Land Reform Policy Group (LRPG). The LRPG stated in their first consultation publication, ‘Identifying the Problems’ that:

“Land reform is needed on grounds of fairness, and to secure the public good…the evidence indicates that present systems of land ownership and management in rural Scotland still serve to inhibit opportunities for local enterprise…the way landholdings are owned and managed can have a critical impact upon the land’s ability to sustain rural populations” (LRPG, 1998a: 2).

Subsequently, ‘Identifying the Solutions’ recognised that diversity in landownership types and was the key to encourage the greatest utilisation of rural development opportunities, as well as greater community involvement in land management (LRPG, 1998b).

The first Land Reform (Scotland) Act, passed in 2003, was split into three sections, and considered by many a pioneering and controversial land law reform for Scotland8. The first section grants rights of responsible access to the Scottish countryside (as mentioned), the second provides communities a right of pre-emption in the purchase of land entering the market, and the third permits crofting communities the right to compulsory purchase of land (Sellar, 2006; Munton 2009; Warren, 2009). Nonetheless, despite the major changes the 2003 Act brought to land management in Scotland, it was criticised as being ‘not radical enough’ to reverse centuries of ‘unfair’ land distribution (Wightman, 2007; see also Warren, 2009; Hunter, 2012). This view is shared by Rosser, who, although not referring to Scottish land reform, highlights the lack of attention paid by progressive property law theorists to the realities of

7 Wightman states that around 30 per cent of private rural land in Scotland is owned by only 115 landowners, with just seventeen owners in control of 10 per cent of the country (Wightman, 2010). 8 A “complex ‘governance’ based property law innovation”, as described by Lovett (2011: 742).

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A. McKee, 16th March 2018 property acquisition and distribution in creating inequalities, and the need for redistribution to meet the needs of ‘historically marginalised groups’ (2013: 109).

Subsequently, following the referendum debate of 2014 and rise of Scottish nationalism, the current Scottish National Party government have undertaken to extend legislative powers to enhance land reform processes, and continue to shift power from private landowners to communities (Warren and McKee, 2011). The Scottish Government commissioned a Land Reform Review Group, and whose report ‘The Land of Scotland and the Common Good’ (including 63 recommendations) was the foundation for further policy development (LRRG, 2014). The Community Empowerment (Scotland) Act 2015 permits the compulsory sale of neglected or abandoned land to eligible community bodies, and the wide-ranging Land Reform (Scotland) Act 2016 has introduced powers of compulsory land sale to such bodies, if transfer of ownership is assessed as furthering the achievement of sustainable development in relation to land, and where maintaining the status quo is considered to be ‘harmful’ to the local community and public interest. The power of private landowners is further challenged in this latest legislation through increasing rights granted to tenant farmers9, requirements for community engagement in land management decision-making, publication of a ‘land rights and responsibilities statement’, and the establishment of a national Land Commission, amongst other measures (Scottish Government, 2016a).

The stated objective of the recent land reform process by the Scottish Government is that “Scotland’s land must be an asset that benefits the many, not the few” (Scottish Government, 2014: 6), and that rights to land must promote ‘fairness and social justice’ (Scottish Government, 2016a). The current Cabinet Secretary for Environment, Climate Change and Land Reform, Roseanna Cunningham MSP, has reiterated that a greater diversity of landownership is necessary for Scotland, as quoted: “I do think that land ownership has been and continues to be too concentrated” (Dickie, 2016), and emphasising the Government’s support for increasing community landownership (Cunningham, 2016). Indeed, the Scottish Government continue to pursue a target of ‘1 million acres’ of land in Scotland to be owned by communities by 202010, through continued funding for the Scottish Land Fund, and the work programme of the Scottish Land Commission (SLC, 2017). The SLC is currently exploring the potential for land value tax and other market interventions in order to reduce the concentration of private landownership in Scotland, in addition to undertaking a review of community landownership mechanisms, and increasing land availability for new entrants to agriculture. This think-piece now turns to the latter topic of interest to demonstrate the potential of, and limitations, to the progressive property rights perspective.

2.1 Increasing land availability for new entrants to agriculture

Access to land is consistently found to be the largest barrier to new entrants to farming across Europe (Sutherland, 2015; Zagata et al., 2017). The price of UK agricultural land is typically higher than could generate a return from agricultural production. The rising value of the land makes it a good investment opportunity, thus increasing competition for land and creating a

9 In particular, controversial provisions for secure ‘1991 Act’ tenants to sell their tenancy back to the landlord on retirement, or on the open market as a secure tenancy to a new entrant or for a farm expansion. These complex agricultural tenancy reforms are described in detail by Lean (2016). 10 Landownership by community bodies in Scotland is growing in area, with the latest assessment at 562,230 acres (227,526 hectares; Scottish Government, 2017).

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A. McKee, 16th March 2018 disincentive to sell. In remote areas land is more readily available, but it can be more difficult to establish viable farming businesses, and potential new entrants may be reluctant to move to remote areas with increased travel requirements or rural communities with declining service provision. Long-term familial occupancy of land makes landowners11, farmers (i.e. owner- occupiers and secure tenants) and crofters reluctant to release their properties for sale or lease, in addition to a range of other barriers to retirement and succession planning by an ageing farming population.

The wide-ranging Land Reform (Scotland) Act 2016 increased the rights granted to tenant farmers (see footnote 9), however, these activities and legislative reform have not yet translated into a trajectory of land ownership change and diminished private ownership concentration. As reported in the farming press, there is a perceived rapid decline in farm land available for rent due to the increased measures of tenant compensation in the 2016 Act (Scott-Dempster, 2016; Mackenzie, 2018). Many landowners are choosing to bring farming within their main land- based activity (farming ‘in-hand’), amalgamating landholdings for existing tenants, or establishing contract farming arrangements, rather than providing new tenancies, due to the perceived risk of tenant right-to-buy12. Many involved in the Scottish land sector describe the need for flexibility in farm tenancies, to encourage greater access to land for young farmers and new entrants (see, for example, Read-Norrie, 2017).

Current research funded by the Scottish Land Commission seeks to explore new and alternative models for increasing the availability of land for new entrants to , and to encourage farmers and landowners to consider options for making land available and supporting new entrant farmers13 (McKee et al., in preparation). These models include (i) revised agricultural tenancies (as detailed in the 2016 Act); (ii) licensing arrangements (i.e. typically seasonal grazing agreements); (ii) joint ventures (e.g. contract farming or share farming), and (iv) partnerships (i.e. equity share and limited partnerships). Further interventions will be explored, including those based on tax or structural changes that influence land availability (e.g. incentives or other forms of support), plus novel approaches to owning land (e.g. involving communities or cooperatives), or generating capital or labour resources (e.g. crowd funding or sourcing). There may be lessons to learn from the approach to land leasing (i.e. based on neighbourliness and cooperation) evident in other countries, such as Norway (cf. Forbord et al., 2014).

Each model has perceived and real opportunities and threats for existing farm businesses and new entrants. However, key to the focus of this think-piece is that these models illustrate the potential to shift property rights outwith the classical and exclusionary realm and provide the opportunity to explore multiple/flexible rights-based approaches to resolving the issue of the sustainability of the agricultural sector in Scotland (and in subsequently wider issues of rural sustainability). The different functions of the land resource can be separated and agreements reached in order to allow multiple businesses (e.g. existing farmer and new entrant) to benefit and expand. A clear example is the success of share farming (in particular share milking) in New

11 In Scotland, large landholdings known as ‘estates’ are typical sources of agricultural tenancies; these estates are owned by a range of landowner types (i.e. private individuals, companies, non-governmental organisations, charities, etc.), and are thus referred to generically in this think-piece as ‘landowners’. 12 See also: https://calummacleodblog.wordpress.com/2016/03/23/the-land-reform-scotland-act-2016/ 13 Please note, this research is not considering issues around access to land for new entrants in the Scottish crofting counties, as requested by the research funder.

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Zealand, which allows for a new entrant to build experience and capital over time. Critical to the success of these arrangements is the level of trust established between the landowner/current farmer and new entrant; typically built on existing relationships, shared backgrounds, and perceived level of experience. Whilst the farmers offering options for new entrants are largely seeking a business diversification, expansion, or succession opportunity, there is also an element of virtue ethics and social obligation, in particular, with regard to the importance of knowledge exchange and mentorship of the next farming generation.

However, as this research has encountered through interviews and focus groups with existing farmers, there is a reluctance to support new entrants who are entirely new to the agricultural industry (due to lack of trust in competence and differing ideologies), which potentially restricts opportunities for innovation and removing path dependency in the sector. Questions arise regarding the impact of joint ventures on farm business profitability, in particular during a period of low profitability for Scottish agriculture and uncertainty in future funding support due to Brexit. An additional key disincentive to farmers and landowners in implementing these models is the potential loss of control of the land asset (e.g. through increasing security of tenure granted to the new entrant) and there exists a real fear regarding the potential for further land reform legislation imposed by the Scottish Government.

The question arises therefore regarding how best to motivate landowners and farmers, in order to encourage their adoption of the models outlined above, and therefore increase availability of land for new entrants to agriculture. This is an example of a public good that requires the participation of private property owners. Interviewees have expressed the need for a ‘changed mindset’ amongst the Scottish farming community, with regard to the potential for innovation and increased profitability with new entrant business development. However, a threshold appears regarding the proportion of existing farmers and landowners who would willingly enter a joint venture (or other model) to support a new entrant (and that typically corresponds with lack of successor), with any further uptake requiring policy-driven enforcement (i.e. regulation or incentives). In this regard, it appears that progressive property rights theory is constrained due to the challenge of embedding a norm of social obligation in the face of individual property owner concerns regarding profitability and control. Indeed, Peñalver notes the irony of “enforcing the farmer’s obligations to act virtuously” (in Rosser, 2013: 118; see also Peñalver, 2009) and thus “where is the virtue if the law gives you no choice but to be virtuous” (Rosser, 2013: 118)14.

Whilst there is a recognition amongst the ‘target audience’ (i.e. landowners and owner-occupier farmers) of the need to acknowledge and act on the moral necessity for property rights sharing, the strength of private property rights embedded in Scottish agriculture, as well as the perceived fragility of individual business and sector profitability, means that this outcome is likely to require long-term culture change and carefully-designed policy measures.

3. Conclusion and personal reflection

14 The Land Reform (Scotland) Act 2016 includes measures for community right-to-buy where it is considered that the actions of the landowner is inhibiting or harming community sustainable development. In deciding whether sustainable development is inhibited an evaluation of landowner adherence with non-statutory guidance for community engagement and the ‘land rights and responsibilities statement’ will be undertaken by Government (Scottish Government, 2017). This exemplifies the irony described by Peñalver and presents a further challenge to progressive property rights in action.

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This think-piece presents early-stage thinking and theory-engagement on my part as I undertake timely (and in my opinion, fascinating) research on behalf of the Scottish Land Commission. The nub of the issue – the balance between private interests and public good, and the line between encouraging and enforcing policy – is common to many topics that concern rural social scientists. Critical to this early-stage consideration of the question of new entrant land access in Scotland (and wider land reform activity, for example the community landownership movement) is the applicability of largely US property rights theory. The driver of land reform in Scotland is underpinned by a unique history, contributing to inequalities in land distribution, as well as instrumental drivers of wealth, power, and class. The US property rights discourse has arguably a different basis for debate (e.g. racial discrimination, the appropriation of land from indigenous peoples, etc.). Further discussion on the applicability of the US perspective on the Scottish context would be appreciated, in addition to a greater volume of analysis from the social sciences, and international critiques (as initiated by Hoffman, Geisler, Lovett, and others). The following section presents my suggested questions for discussion and further research; I would welcome the contributions and critiques of the TARRN participants.

4. Evidencing debate: the role of social science

The topics and discussion raised within this think-piece consequently generate the following questions for future research:

 What international examples and potential comparisons could add value to understanding land reform processes in Scotland (i.e. both community and government- led land reform)? What are the ‘consequential geographies’ of changing property rights as sought by Illbery and colleagues (2010)? What are the differences in perspective between American and UK scholars?

 Hoffman states that “Community ownership in Scotland has enabled the reinvention of democratic local governance” (2018: 142). To what extent is this true and how can we measure success in achieving public good outcomes from shifting property rights? What is an appropriate timescale for measuring success? How can we meet the call of Rosser (2013) and become more radical in critiques of property rights thinking?

 How can we develop understanding of why/how a land owner would share their land resource, their motivations for selling land and/or retiring, and therefore pass on land to younger generations and increase land access for new entrants (i.e. to agriculture/forestry)? Similarly, how can we understand the values and motivations for ownership of new types of property owners (e.g. community bodies, land trusts, new entrants to agriculture)?

 What can the social sciences contribute to policy development, and therefore overcoming societal and sustainability challenges arising from property ownership? What kinds of innovative methods will support the necessary inter-/transdisciplinary interaction (e.g. ethnography, participatory mapping, psychological assessment, economic modelling, etc.)? Who are the key actors, and in particular, how can the general public be integrated as a stakeholder? What does the lens of existing property rights theory contribute to unpacking bundles of property rights for the goal of rural sustainability? What direction can new theory take?

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Acknowledgements

Mags Currie and Lee-Ann Sutherland from the Social, Economic and Geographical Sciences group, The James Hutton Institute, are warmly thanked for their input to the draft think-piece.

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