The Devon County Council Farms Estate Strategic Review March 2010 The Devon County Farms Estate Strategic Review March 2010
Contents Section Page
1.0 Foreword 4
2.0 Introduction 6
3.0 Recommendations 9
4.0 Summary on the attainment of the objectives/recommendations of the 11 Best Value Review 2001 and the approved Management Strategy and Plan 2002 to 2012
5.0 Statutory Obligations 18
6.0 Alignment with the Devon Strategic Plan 20
7.0 Areas of the Estate that need to be retained to secure non-farming 25 objectives
8.0 Key factors within the agricultural industry that have influenced the 29 viability of agricultural businesses
9.0 Comparison of rental income with rates that are secured by other County 31 Councils, in the private sector, investment in government securities and savings on potential borrowing
10.0 Tenant Profile 34
11.0 Information on the number of tenants entering and leaving the Estate over 36 the last 10 years
12.0 Questionnaire to all Devon County Council Farm Tenants 38
13.0 Summary of areas where the Estate has created opportunities for the 39 tenants to diversify and create businesses that have or could be sustained following departure from the Estate
14.0 Examples of educational or environmental initiatives the Estate has 41 facilitated
15.0 Consultation with other commercial landlords within Devon to identify the 43 likely level of opportunities that could be created within Devon over a five year period
16.0 Summary of the anticipated headline position for the next five years 45
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17.0 SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) of 47 core options for the future ownership, structure and use of the Estate
18.0 Conclusions 49
Appendices
(i) Table of key targets and outcomes for the Estate between 2002 and 2009 1 (ii) An Estate Property Asset Schedule 2 (iii) A location map of farms on the Estate 6 (iv) Ten case studies providing examples of Best Practice on the Estate 7 (v) The revised farm tenancy letting policy 17 (vi) Statement relating to criteria to be established before landlord’s consent 22 for tenant’s improvements can be granted (vii) Statement relating to criteria to be established by the Committee before a 24 landlord’s capital investment is made (viii) Acknowledgements 25 (ix) Terms of Reference for the review 27 (x) Schedule of progression opportunities in private sector brought to the 34 attention of tenants between 2002 and 2009 (xi) ‘The Importance of the County Farms Service to the Rural Economy’ 36 (November 2008), by Sir Don Curry CBE FRAgS, Chairman of the Sustainable Farming and Food Delivery Group (xii) Questionnaire sent to all Devon County Council Farms Estate tenants 48 (xiii) Glossary 51
List of tables 1 Number of holdings 11 2 Size of Estate 11 3 Revenue rate of return 2002-2009 13 4 Revenue surplus 2002-2009 15 5 Revenue contributions from the corporate compliance budget 15 6 Capital generated on the Estate 15 7 Average rents of South West County Council Farms Estates 32 8 Average rents of full agricultural tenancies published by DEFRA 33 9 Average rents of Farm Business Tenancies published by DEFRA 33 10 Age profile of tenants 34 11 Primary farming system 35 12 Tenant’s progression 36 13 Core Estate structure and financial analysis forecast 45 14 Key Estate targets and delivery to date (Appendix (i)) A1 15 Estate property asset schedule (Appendix (ii)) A2 16 Schedule of acknowledgements (Appendix (viii)) A25 17 Schedule of progression opportunities (Appendix (x)) A34
List of figures 1 Management strategy model adopted in 2002 12
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1.0 Foreword
This strategic review of the County Farms Estate Service comes at a time when public finances are under immense pressure. The review group was, therefore, keen not to just explore the capital value of the Estate but also to value the corporate strategic, economic, social and environmental benefits the Estate provides.
Devon County Council’s Farms Estate was acquired during the period 1908 to 1940 to provide rural employment at a time of mass urbanisation and to help the Country recover from food shortages during and after two world wars. One hundred years on and the County Farms concept survives. Although the reason has undoubtedly evolved, we have perhaps, come full circle. An exponentially increasing world population and pressures on natural resources, health and food security are once again on the Government agenda – highlighted by the recent launch of the Government’s Food 2030 strategy.
Throughout their history County Farms have provided the unique opportunity of an affordable and realistic means of entry for people to start farming in their own right. An opportunity, the agricultural sector tells us would otherwise not exist. The Estate structure has evolved over time and is likely to continue to do so as market forces for commodity products require ever-increasing economies of scale. Nevertheless, the competitive nature and entrepreneurial spirit of our tenants has engendered a large number of highly successful farmers and rural entrepreneurs diversifying into and capitalising on niche or specialist markets.
By creating better equipped and larger holdings, tenants have been able to build capital more effectively, enabling them to move off the Estate onto commercial tenancies in the private sector or to purchase holdings of their own. This turnover of tenants has provided the flexibility and opportunity for more new entrants to start farming careers. The short-term nature of Farm Business Tenancy Agreements has undoubtedly increased the throughput of tenants, but has also caused a great deal of anxiety for some good tenants who, in a very competitive market, have not had the good fortune to progress beyond the Estate within the allotted timeframe. This conundrum has been considered long and hard by the review group. By incorporating a greater degree of flexibility in the management of tenancies, the right balance of providing start-up and progression opportunities and incentives for tenants to progress beyond the Estate as quickly as possible can be struck.
This review, initiated in April 2009, is eight years into the current 10 year strategy and plan and raises a number of very significant challenges for the Estate in the future. Nevertheless, the Devon County Farms Estate is well- positioned to meet those challenges. It is a viable Estate providing a valued and unique service of which Devon should, quite rightly, be proud. That is not to say any of us can rest on our laurels. The Estate can, and should, be made to work harder for the citizens of Devon.
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Sir Don Curry CBE FRAgS, Chairman of the Sustainable Farming and Food Delivery Group said in his paper ‘The importance of The County Farms Service to The Rural Economy’ (November 2008), “Farms owned and managed by Local Authorities are an important strategic, national asset that should be retained. These farms assist Local Authorities in meeting wider economic, countryside and environmental objectives and provide an essential route into farming for new entrants”. He added “the barriers to entry are now high. We need to encourage enterprise and innovation and creating opportunities for new entrants is a way to achieve this. The Local Authority tenanted sector is vitally important in helping reach this goal”. I wholeheartedly agree with him.
Councillor John Hart Leader of Devon County Council
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2.0 Introduction
2.1 For many years the County Farms Estate Service has been performing very well for the Authority in terms of new entrant opportunities provided, capital and revenue generation, and, more latterly, the delivery of wider corporate aims and objectives.
2.2 Appendix (i) identifies some of the Estate targets and achievements but, as a summary, 10 of the more significant achievements of the Estate between 2002/03 and 2008/09 are identified below:
1. Exceeding the cumulative capital receipts target of £9,094,330 by some £5,695,264 generating a total £14,789,594 (net) 2. Exceeding the cumulative revenue surplus target of £1,544,922 by some £232,186 generating a total £1,777,108 3. Offering 20 new entrant opportunities 4. Creating 17 internal progression/relocation/expansion opportunities 5. Supporting 10 tenant’s progression beyond the Estate to private sector farming opportunities 6. Sale of 19 farmsteads identified for disposal as part of the previous review 7. Sale of 299 hectares of land identified for disposal as part of the previous review 8. Despite the capital realised from the Estate, the asset value (existing use as let Estate) has increased by £717,206 from £18,098,345 to £18,815,551 9. Investing £1,964,026 in improved landlord’s infrastructure financed from farm receipts 10. Achieving year-on-year revenue rate of return on capital
2.3 In addition, research by the review group has identified a land bank with development potential that could be realised over perhaps the next 50 years. The estimated value could be as much as £101,000,000. The sale of which would still result in the retention of a viable agricultural Estate.
2.4 One of the fundamental aims of the approved Management Strategy 2002 to 2012 was that ‘no revenue or capital costs should fall to the County Council’. However, with the implementation of The Nitrate Pollution Prevention Regulations 2008 the Estate needed, for the first time, short-term capital funding support from the County Council to provide new infrastructure on the Estate.
2.5 Furthermore, the backlog maintenance liability of the Estate appeared to be rising, putting pressure on the attainment of the revenue surplus target.
2.6 Finally, it was becoming increasingly apparent that some tenants were experiencing significant anxiety with the current policy of letting farms on relatively short fixed-term Farm Business Tenancy Agreements
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which, combined with the limited number of progression opportunities in the private sector, was leaving some very competent tenants with nowhere to go at the end of their tenancy.
2.7 For these principal reasons, the County Council’s Business Transformation Unit recommended that a review of the Estate Management Strategy and Plan 2002 to 2012 be brought forward and undertaken immediately. The proposed Terms of Reference for the review process (see Appendix (ix)) were subsequently approved by the Farms Estate Committee on 30 July 2009 (minute ref: FE/7).
2.8 The review group comprised Councillor Jerry Brook (Chair), Councillor Jeremy Yabsley, Gill Loman (Senior Finance Manager), Jon Williams (Performance and Contracts Manager) and John Lee, Chairman of Sustainable Farming and Food Board (South West).
2.9 The scope of the review was deliberately wide-ranging and critically challenging. It considered the fundamental question of whether or not the need for the service had become obsolete. If so, should the Estate be sold? If not, how should the Estate be structured and what strategy should be adopted to alleviate the immediate challenges and make the Estate work harder to deliver key aims and objectives and better complement the County Council’s wider corporate goals?
2.10 To help in this process, it was necessary to consult with as many individuals and organisations as possible to ensure a pragmatic and balanced outcome. Over seven days a wide range of organisations were invited to submit evidence to the review group. A list of consultees can be found in Appendix (viii).
2.11 It became quite clear during the consultation process that there was almost unanimous support for the retention of the Estate. Most consultees recognised that if the County Council did not provide this service there would be little, if any, realistic prospect of new people entering the farming sector and, with an aging profile, the sector needed new blood.
2.12 Using this feedback, the review group established the following principles and ambitions:
• The Estate should be retained to provide opportunities for new agricultural or land-based ‘entrepreneurs.’ • The Estate is an asset for the people of Devon which should be secured • A Farms Estate service fit for purpose should be created that the people of Devon and tenants can be proud of • A long-term management plan setting out a strategy for perhaps the next 25 years subject to periodic reviews, should be agreed • Farms must be provided with appropriate infrastructure supported by ongoing reinvestment. (It is considered investment in the Farms
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Estate is needed in the short, medium and long term. The Farms Estate faces the immediate challenge of having to fund a programme of NVZ compliant slurry stores, which now needs to be met by capital released from the Estate.) • Tenants to be given opportunities to excel • The Estate service must deliver the County Council’s corporate aims • The Estate should become a resource to support the delivery of education throughout Devon • The Estate should embrace technical excellence and support agricultural research to meet 21st Century challenges • Opportunities for environmentally positive projects should be provided • Tenants should be encouraged to consider and develop farm projects that support social inclusion
2.13 From these general ambitions, the recommendations set out in section 3.0 of this report seemed a natural and logical progression.
2.14 By identifying a number of best practice case studies from the Estate at Appendix (iv), the review group hope to whet the appetite of readers and demonstrate some of the very positive benefits and value of retaining the Estate. Without the Estate, some of the wider aims and objectives of the Authority would be difficult to deliver e.g. increase biodiversity, renewable energy and rural business opportunities. The Estate can and will, under the stewardship of the Farms Committee, work harder and, in time, will become an asset of which the whole county can be proud.
2.15 Finally, this review process would not have happened without the assistance and dedication of all who contributed. As Chairman of the Review Group I wish to thank everyone sincerely who contributed to this review. I hope what is proposed is the foundation for a more secure future for the Farms Estate and we can continue to make opportunities available for new entrants which will contribute to wider benefits for the people of Devon.
Councillor Jerry Brook Chairman of Review Group
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3.0 Recommendations
3.1 These strategic recommendations should be taken as a whole package and they supersede the recommendations set out in the Best Value Review Report 2001.
1. The significant majority of the Estate is to be retained but some assets are to be sold to generate capital for essential inward investment on the Estate, to capitalise on strategic development opportunities and to release large capital receipts for the benefit of the wider County Council.
2. 100% of capital receipts generated from farm disposals, including farm buildings for redevelopment, are retained by the Estate to meet current and future statutory obligations, for inward investment and, on occasion, to buy replacement land and/or farms. When land is sold for development, the Estate to retain only 16% and the remaining 84% to be transferred to the County Council’s Capital Programme.
3. An asset management plan to be put in place for the Estate to ensure long-term viability and to identify capital to be released in the immediate future for inward investment.
4. The Estate to be managed in accordance with the Agriculture Act 1970 (but noting the interpretation of Section 39 of the Agriculture Act 1970 as set out in Section 5 of this report taken from the Devon County Council Farms Estate Best Value Review Report of 2001).
5. The detailed farms letting policy as set out in Appendix (v) to this report to be adopted.
6. That the Authority should recognise the multi-functionality benefits of the Estate and acknowledge the social, economic and environmental value of the farms. Please see section 4.6 for detailed commentary.
3.2 For the strategic recommendations to be achieved the following operational recommendations will need to be implemented.
7. Terms of reference to be established for the Farms Estate Committee to consider capital investment on the basis of justifiable reasonable need, viability and benefit to the Estate and to ensure investment in specialist plant and equipment is fully justified. Please see Appendix (vii) for an outline proposal.
8. To incentivise tenants to fund capital investments on farms (particularly on progression farms). For example, slurry stores and general purpose buildings.
9. To provide a clear policy/position statement on the criteria required for the landlord's consent for tenants’ improvements and on the basis of
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compensation at the end of tenancy. This statement is required to give tenants the confidence to invest and to encourage financial institutions to lend against unsupported borrowing. Please see Appendix (vi) for proposed policy statement.
10. The 'business critical' maintenance items on farms should be identified and a plan developed to reduce these items significantly.
11. The Farms Estate Committee to reconsider the share of maintenance liabilities between landlord and tenant in relation to all new agreements.
12. To form closer working links with land based colleges (e.g. Bicton College) with a view to the Estate being used as part of their educational programmes.
13. To maintain strong links with other commercial Estates in Devon.
14. To provide support and encouragement to tenants who wish to make applications to environmental schemes.
15. To provide support and encouragement to tenants who wish to pursue and develop socially inclusive project proposals (e.g. employment of disabled or disadvantaged persons).
16. To support the development of renewable energy schemes on the Estate.
17. To ensure that diversification is encouraged and that tenants are supported in making applications to draw down funds from the Rural Development Programme for England or similar or successor schemes.
18. To stimulate closer working relationships between the Estate and schools to support the County's 'Changing our Futures: Learning for Sustainability in Devon' strategy. Please see section 6 for commentary.
19. To work with Housing Associations to identify if a dedicated amount of low cost housing could be made available to retiring tenants if the Farms Estate provided land and perhaps a modest amount of capital. The County Council to respond to the consultation from the Community & Local Government Department to aid the facilitation of this recommendation.
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4.0 Summary on the attainment of the objectives/recommendations of the Best Value Review 2001 (BVR2001) and the approved Estate Management Strategy and Plan 2002 to 2012
4.1 BVR2001 – Recommendation 1: that a core County Farms Estate is retained and over the next 10 years this be condensed to a maximum of 60 holdings apportioned on a ratio of 1:2 between starter farms and progression farms.
Table 1 – Number of holdings
Year No. of farms Breakdown Actual 2002 103 6 Nursery 60 Starter 37 Progression Target 2009 73 6 Nursery 30 Starter 37 Progression Actual 2009 84 6 Nursery 39 Starter 39 Progression
At the time of approving the Estate Management Strategy and Plan in 2002 the target rate of restructuring was always acknowledged to be optimistic. The targets included a high dependence on negotiating early possession of secure Agricultural Holdings Act 1986 (AHA) tenancies known as ‘windfalls.’ So far the Estate has resisted the temptation to offer ‘golden handshakes’ or sales to sitting tenants at discounted prices to achieve the target rate of restructuring.
This will continue to be a factor likely to limit the future rate of restructuring of the Estate.
4.2 BVR2001 – Recommendation 2: that in the course of this rationalisation a minimum of 50 houses and 1500 acres of land are sold but funding be available from the receipts to permit the selective acquisition of land to consolidate the Estate and strategic capital investment in buildings.
Table 2 – Size of Estate
Year No. of farms Total Ha (ac) Actual 2002 103 4330 (10,699) Target 2009 73 3992 (9,864) Actual 2009 84 4031 (9,960)
Therefore there have been 19 houses sold and a net reduction of 299 hectares since 2002 (318 ha sold and 19 ha purchased on in/out basis comprising 8.00 ha in 2002/03 and 11.20 ha in 2005/06).
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The reason for the slippage behind the target number of farms and hectares is again primarily due to the dependence on ‘windfall’ possession of AHA 1986 tenancies.
Until 2009 capital amounting to £1,837,115 was held by the Estate on an in/out basis to purchase replacement land. In 2009 24.28 ha has been purchased for £275,000 and 34.39 ha has been purchased–subject to contract for £530,000. This will leave a net balance of in/out funds available for 2010 of £1,032,115
4.3 BVR2001 – Recommendation 3: that the throughput of tenants be given greater priority.
The restructuring phase of the Estate Plan was acknowledged in 2002 as conflicting with this objective. The reduction in the number of farms, amalgamation and relocation packages all contribute to limiting the supply of farms for new entrants.
Furthermore, until all tenancies are let under the Agricultural Tenancies Act 1995 the security of tenure of the Agricultural Holdings Act 1986 will also be a limiting factor with some secure tenants making little effort to progress beyond the Estate.
Nevertheless, the throughput achieved is in line with the targets set for the restructuring phase and compares favourably with other local authority estates across the South West.
Table 11 in section 11 identifies all the starter and progression farms let on the Estate and progressions beyond the Estate into the private farming sector between 2000 and 2009.
4.4 BVR2001 – Recommendation 4: that to stimulate the throughput, two FBT’s totalling 15 years be the accepted norm for the occupation of Estate holdings, that greater effort be made to persuade tenants who antedate the Agricultural Tenancies Act 1995 to retire and that closer liaison be established with external bodies to facilitate the movement of tenants off the Estate.
Diagram 1 – Management strategy model adopted in 2002
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Please note, this policy was modified by virtue of committee resolution FE/175 of 30 November 2004 introducing the ‘exceptional circumstances’ policy permitting extensions to tenancies of up to 5 years on a case-by-case basis.
This recommendation formed an integral part of the 2001 Best Value Review and has been implemented religiously ever since which has caused consternation and concern for tenants coming towards the end of an allotted term of years on the Estate. With limited influence or control over the ability of tenants to progress into the private sector, the question that has to be asked today is whether or not this policy remains fit for purpose?
Retirement packages have been agreed with AHA 1986 Act tenants to free up opportunities to restructure, reduce the capital investment liability for the County Council and re-let or sell more farmsteads.
Liaison meetings have been held periodically with the Country Land and Business Association (CLA) and organisations such as the National Trust.
Officers identify farms advertised to let in the private sector and notify tenants of any possible opportunities. Since 2002, officers have brought 34 potential private sector opportunities to the attention of tenants, an average of 4.25 per annum rising from 1 in 2002 to 7 in 2009 (please see Appendix (x) for further details). It should also be noted that officers cannot identify every opportunity; as there will certainly be others up and down the country.
4.5 BVR2001 – Recommendation 5: that a clear annual revenue rate of return on the Estate, not distorted by capital receipts, is fixed in the course of updating the Management Strategy for adoption in 2002.
The target revenue rate of return is set in the 10 year Finance Plan, and calculated and reported each year in the Annual Report.
Table 3 – Revenue rate of return 2002-2009
Year 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 Target 0.51 0.53 0.56 0.59 0.62 0.67 0.76 (%) Actual 0.51 0.51 0.54 0.73 0.75 0.91 0.99 (%)
It is difficult to form any meaningful comparison with other local authority estates across the South West based on the wide disparity of asset valuations and the methods employed to calculate them.
4.6 BVR2001 – Recommendation 6: that the Estate takes a lead role in the promotion of sustainability and diversification schemes on its farms as long as research indicates that this can be cost-effective.
The Estate has become a multifunctional service that provides a resource not only for agriculture but for the wider community. Diversification into
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alternative agricultural and non-agricultural services on the Estate can allow both tenants and landlord to provide agricultural multifunctionality and economies of scope demonstrating the County Council’s commitment to achieving a sustainable rural economy in Devon.
Over the last seven years, officers have been exploring a variety of projects that enable the Estate to be used not just as an agricultural Estate but as a renewable energy provider, a learning environment, a diverse habitat and perhaps a leader in sustainability. Some of these projects cannot be achieved overnight and may take several years before the true results are seen. With co-operation between Directorates of the County Council, the Estate could be used for a host of wide-ranging projects.
The case studies identified in Appendix (viii) provide a range of examples of diverse, innovative and sustainable farming systems operated on the Estate.
4.7 BVR2001 – Recommendation 7: that the recommended approach to the future of the Estate be kept under review in the context of the Devon [Foot and Mouth Disease] Recovery Plan and that reports be brought forward on progress with the Plan’s implementation.
The 2001 Devon Recovery Plan was a 10 point plan to help the economy and communities recover from the effects of foot and mouth disease.
Dan Meek, Assistant Land Agent for the Estate at the time, was seconded (part time) to the County Council’s Economy and Regeneration Unit to assist with the delivery of the plan. The 10 point plan was:
(i) Capacity to deliver – co-ordinating 150 rural partners (ii) Marketing – to restore consumer confidence in the Devon brand (iii) Finance for business – interest free loan schemes, rate relief etc (iv) Business advice – for agricultural and non-agricultural sectors (v) Health and welfare support – to ensure sufficient health and counselling support is available (vi) Training – to overcome change and provide access to new opportunities (vii) Regeneration of communities – initiatives to aid regeneration of coastal and market towns and provide vital community infrastructure (viii) Environment – to restore or enhance the environment (ix) Agriculture – to ensure sufficient infrastructure exists to support sustainable farming, marketing of local produce and renewable energy (x) Access to the countryside – creating new rights of way
The initial momentum of the County Council co-ordinated Foot and Mouth Recovery efforts has to a certain extent been superseded by industry developments and market forces. However, a couple of key legacies exist such as the Red Meat Sector Development Project which is believed to have supported the freeing up of abattoir capacity for local producers seeking to sell meat direct to the consumer, and the Devon Rural Network which remains an important and influential recognised collective of industry representatives.
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4.8 Estate Management Strategy 2002 – Aims & Objectives 4.1(i)
With the aim that no revenue or capital costs should fall on the County Council
4.8.1 Revenue
The Estate has performed very well, generating in most years a net surplus greater than or equal to targets set for each year of the finance plan period as follows:
Table 4 – Revenue surplus 2002-2009
Year 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 Total Target(£) 217,000 217,000 198,000 226,300 232,400 220,122 234,100 1,544,922 Actual(£) 219,485 208,174 202,422 271,275 266,955 305,476 303,321 1,777,108
Less the County Council’s corporate compliance revenue contributions for statutory obligations introduced following the commencement of the Estate Plan
Table 5 – Net revenue surplus from Estate after corporate compliance funding support
Year 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 Total Corporate 0 70,445 44,106 121,298 82,263 1,047 71,002 390,161 funding (£) Net 219,485 137,729 158,316 149,977 184,692 304,429 232,319 1,386,947 balance(£)
4.8.2 Capital Generation
Table 6 – Capital generated on the Estate
Year 02/3 03/4 04/5 05/6 06/7 07/8 08/9 Total Target 2,180,000 1,211,000 1,208,330 1,415,000 1,030,000 1,050,000 1,000,000 9,094,330 Total 2,059,021 1,802,800 4,244,406 415,000 1,116,000 2,388,763 2,763,604 14,789,594 Corp 1,729,578 1,514,352 3,204,731 348,600 937,440 1,374,241 1,809,536 10,918,478 (84%) Estate 329,443 288,448 610,425 66,400 178,560 261,760 344,673 2,079,709 (16%) Estate 0 0 429,250 0 0 752,762 609,395 1,791,407 (in/out)
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4.9 Estate Management Strategy 2002 – Aims & Objectives 4.1(ii)
That the restructuring of the Estate should be pursued by sale or re-organisation of the farms
Between 2002 and 2009 19 farmsteads have been sold resulting in a net reduction of 299 hectares and enabling the amalgamation of land to restructure the retained Estate from (103 farms) 6 nursery units, 60 starter units and 37 progression units (plus 5 properties held temporarily in hand with vacant possession) to (84 farms) 6 nursery units, 39 starter units and 39 progression units. The average size of starter and progression units has been increased towards targets of 41 and 82 hectares respectively.
4.10 Estate Management Strategy 2002 – Aims & Objectives 4.1(iii)
That tenants be given first consideration to purchase the freehold of their farms (or, more often, just the farmsteads)
Sales to tenants since 2002 include: • Jackleigh Farm, Axminster • Three Oaks Farm, Gulworthy • Cordwents Farm, Halberton • Middle Southcott Farm, Okehampton • Frostlands Farm, Sandford
Please note that until recently sales could only be conducted on the basis of open market value with vacant possession i.e no sitting tenant discount and this has undoubtedly been the cause of some potential sales not proceeding. However, more recently, where a farm has been scheduled for disposal in the current Estate Plan and where a clear and unequivocal business case has been established demonstrating that it would be in the best financial interest of the County Council to sell to the sitting tenant at less than market value, this former policy has been relaxed.
4.11 Estate Management Strategy 2002 – Aims & Objections 4.1(iv)
That the throughput of tenants be given greater priority
Please see the analysis of the Best Value Review Recommendation 3 and section 11 of this report for performance data on the throughput of tenants. In addition, the following points are worth noting.
• Promotion of Estate at Devon County Show 2009. Promotional literature circulated including to Devon YFC and Bicton College.
• Maintenance of a mailing list of over 400 prospective tenants seeking farming opportunities on the Estate.
• Presentation given to the CLA on estates working together for the future benefit of the tenanted sector. (It would, however, be difficult for
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private estate managers to invest significant amounts of time to attend an estate open days when a limited number of farms are available.)
• Tenants informed of 34 potential opportunities to progress when private sector farms advertised to let between 2002 and 2009.
• Regular informal meetings held with land agents in the private sector and references provided for tenants seeking to progress thereby building rapport with other estates. Some tenants coming second in competition for tenancies let in private sector are impressing managing agents and are being kept in mind for future letting opportunities although they would still have to apply in open competition.
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5.0 Statutory Obligations
5.1 As part of the review the advice of the County Solicitor was sought in relation to the provisions of the Agriculture Act 1970 and how this Act effects the operation of the Devon County Council Farms Estate or other similar estates.
5.2 The County Solicitor considered that the position had not altered and remained the same as that stated in the 2001 Best Value Review Report of the Devon County Council Farms Estate. At the time of the 2001 Best Value Review the following text was documented and included in that report:
The present legislative context is Part III, Agriculture Act 1970 which states that a Council:
Shall make it their general aim to offer opportunities for persons to be farmers on their own account.
The Team was told by the Tenant Farmers Association that it had obtained Leading Counsel’s Opinion that Section 39 of the 1970 Act imposes a mandatory duty on Councils to provide smallholdings. This opinion has not however been disclosed and it does not accord with the view of DEFRA which (as MAFF) in 1999 wrote:
Advice from the Ministry’s Legal Department to officials and to Ministers has been clear over many years: section 39 does not impose the specific duty that smallholdings must be maintained at a particular level. Neither the policy nor the object of Part III of the Act was to do so.
The express duty imposed by section 47(I) of the Agriculture Act 1947 on Local Authorities to provide statutory smallholdings was repealed by the 1970 Act and replaced by the general aim provision. It is difficult to see that Parliament would have repealed section 47 of the 1947 Act and at the same time imposed a new statutory obligation that has exactly the same effect. Another consideration is that, with only very limited exceptions, section 123 of the Local Government Act 1972 removed powers that had previously enabled Ministers to control the sale of land by Local Authorities, including land held as smallholdings.
In carrying out the general aim of offering smallholdings, Councils are required to have regard to the general interest of agriculture and of good estate management. It is possible that the interests of good estate management might be such that an entire estate should be disposed of. Councils of course have a
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fiduciary duty to their ratepayers, which may on occasion outweigh the maintenance of a smallholdings estate.
This review had therefore proceeded on the basis that DEFRA’s pronouncement is correct and that within an objective of offering opportunities for independent farming and the requirement to have regard to the interests of agriculture the County Council is not bound by law to operate a county farms estate.
The official government line appears to have been adopted (or even freely interpreted) by the Audit Commission’s Best Value Inspectorate in its Summary Assessment of the Monmouthshire County Farms Best Value Review. This refers to the provision of a “discretionary service”. The summary goes on:
The concept of county farms was first established nearly a century ago. In recent times the rationale behind Local Authorities providing the service has been increasingly questioned with the financial pressure on many Councils to deliver quality statutory services as an overriding priority.
5.3 In conducting the 2009/10 review and consulting with a wide range of consultees it was noted that slightly different interpretations are placed on the provisions of the Agriculture Act 1970 but there is no definitive authority that identifies it as a statutory duty for Local Authorities to provide small holdings or farms.
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6.0 Alignment with the Devon Strategic Plan
The Devon Strategic Plan adopted by the Authority 2002 to 2009 had five key priorities. The following summary case studies are given as examples of how the Estate was utilised to help the Authority deliver those priority objectives.
6.1 Priority 1 - Giving children and young people the best possible start in life
Tenants continue to host school visits on an informal basis and are providing an invaluable service to local schools and communities. This initiative was included in the ‘Changing our Futures: Learning for Sustainability in Devon’ document which aims to encourage outdoor learning. Higher Fingle Farm, Drewsteignton is accredited with the Countryside Educational Visits Accreditation Scheme (CEVAS). Activities include in-school teaching such as egg incubation and hatching scheme at Cheriton Bishop Primary School. There are ad hoc school visits elsewhere across the Estate such as Middle Yeo Farm, Down St Mary and East Fingle Farm, Drewsteignton. Tenants also take part in the Open Farm Sunday. It is an annual event sponsored by LEAF (Linking Environment and Farming) and encouraged by the FACE (Farming and Countryside Education) and Think Food and Farming initiatives.
Open Farm Sunday hosted at Higher Fingle Farm, Drewsteignton 2007 and 2008 and at Coppa Dolla Farm, Denbury in 2009
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6.2 Priority 2 - Strengthening Devon’s economy The past 10 years has seen the Estate evolve from a primary commodity milk production estate to a more mixed one providing a wide range of rural skills, services and products. Many tenants have identified and capitalised on niche and specialist markets adding value to raw commodities by processing, packaging and direct marketing which has created many new rural employment opportunities and economic growth.
Higher Fingle Farm, Drewsteignton. Organic unit with poultry abattoir and cutting plant. Duck egg production and packing station (see Appendix (vi) for full case study).
Lower Parks Farm, Crediton. Organic cider and apple juice production, bottling plant and processing unit (see Appendix (vi) for full case study).
Duckaller Farm, Dawlish. Organic pig, vegetable and arable farm. Farm shop, hog roast and outdoor catering services (see Appendix (vi) for full case study).
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6.3 Priority 3 - Celebrating Devon’s culture Many of the consultees engaged during the review process commented, albeit anecdotally, on how important Estate tenants are to the social cohesion of local communities, their children support local schools, they provide local goods and services, take pride in the community and fulfil roles of Parish and District Councillors, Church Wardens and other important community positions. It is suggested that if the farmsteads were sold at best price to perhaps the amenity and lifestyle market, those purchasers may not contribute in the same way. 6.4 Priority 4 - Improving Devon’s environment Delivery of this corporate priority can perhaps be best demonstrated by providing typical examples of good/best practice: • Tree planting - Woodland Grant Scheme (WGS) at Cobberton Farm, Dartington • Hedgerow restoration – c. 500m new hedge at Markhams Farm, Ide • Field margins – Duckaller Farm, Dawlish providing valuable wildlife corridors • Pond creation/restoration – Furze Barton Farm, Ashreigney • Organic farming – 12 tenants are farming organically • Entry Level Scheme (ELS), Higher Level Scheme (HLS) Organic Entry Level Scheme (OELS) – 60 farms are in the ELS or OELS and others are in Countryside Stewardship Scheme (CSS) or Environmentally Sensitive Area (ESA) schemes [Natural England data] • Barn Owl boxes – Cotley Farm, Ottery St Mary • Bat hibernaculum – Pill Box at Waterford Farm, Musbury • Kingskerswell Bypass - works to mitigate the impact on biodiversity at Fairfield Farm, Denbury, Coppa Dolla Farm, Denbury and Bulleigh Elms Farm, Ipplepen • Wardell Armstrong desktop investigation into wind energy generation potential on Estate (2009) • NPS Desktop study of hydro-electric generation on the Estate (2008)
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6.5 Priority 5 - Promoting independence and choice for Devon’s adults The provision of a realistic and affordable means of entry into the farming sector which many commentators suggest would otherwise not exist is, in its own right, a unique service providing independence and choice to Devon’s adults. This service is sometimes extended further by tenants’ own initiatives and endeavours. For example, the tenants of Cotley Farm, Ottery St Mary have for many years provided 24 hour care for four or five learning disabled people. Although they are accommodated off the holding, much of their time is spent in meaningful and rewarding activities on the farm from caring for the cattle to growing vegetables in the market garden.
6.6 The following four supporting corporate strategies are considered worthy of specific mention: 6.6.1 Supporting strategy 1 - Connecting with Devon’s communities Surplus property from the Estate has and is being used by the Authority to develop, with the support, co-operation and sometimes leadership of the local community, plans for new and improved community infrastructure such as affordable housing, small rural workshops and offices, new schools, community recreational and leisure facilities etc. Some of the more significant initiatives are being developed at: • Little Bickington Farm, High Bickington, • Newcombes Farm, Roborough • East Hill Farm, Knowestone Other simpler, more localised initiatives on the Estate include the letting to the parish council of land for a children’s playground in Halberton. 6.6.2 Supporting Strategy 2 - Providing excellent customer service Highlighting the key targets delivered between 2002 and 2009 demonstrates, in our view, the Estates contribution towards delivering excellent customer service. • Cumulative revenue surplus of £1,386,947. • Cumulative capital generation of £14,789,594 of which £10,918,478 has been used by the Authority to help deliver the education, social care and environment directorate’s capital programmes. 6.6.3 Supporting Strategy 3 - Delivering through people This strategy is being delivered by the Estate tenants who are custodians of the Estate charged with delivering best practice stewardship of the property and with delivering or providing a wide range of goods and services.
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6.6.4 Supporting Strategy 4 - Providing better value for money
This strategy has been delivered by:
• Increasing the net surplus revenue from £219,485 in 2002/03 to £303,321 in 2008/09 on a diminishing Estate • Exceeding the cumulative capital generation target for the period 2002/03 to 2008/09 by some £5,265,214 and at the same time increasing the capital asset value of the Estate by £717,206
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7.0 Areas of the Estate that need to be retained to secure non-farming objectives
Several County Council officers were invited to examine a detailed set of plans identifying the land held within the Farms Estate.
7.1 Residential Development Opportunities
Planning staff within the Environment, Economy and Culture (EEC) Directorate were asked to identify land that was either scheduled for development or appeared to have short/medium-term development potential. One of the review team and the Senior Land Agent also identified some additional parcels of land with short/medium-term potential. As a result of these exercises it was noted that up to 32.3 hectares was either currently scheduled to be developed or was subject to a reasonable expectation that development might occur. Included in this total are areas such as the land at Monkerton and Alphington, and land within or near a small number of village ‘envelopes’ that perhaps have the scope to be developed within the next three to five years.
An additional exercise was also carried out examining land that may have longer term potential that is adjacent to towns and rural settlements. It was not possible to separately identify timescales within which this land might be developed but their location would suggest that they each have some potential scope to be developed over a longer period of time. Most of the land identified as part of this additional exercise only represented a modest proportion of any one holding but in total amounted to a further 173.6 hectares. While it is impossible to guarantee that all this will be developed there is a reasonable likelihood that a proportion of it will be and therefore it would be unwise to dispose of it now at agricultural value.
7.2 Industrial/Commercial Development Opportunities
County Council planning staff only noted a very modest area of land of no more than 1 to 2 hectares, although some overlap exists where commercial sites might be developed on land already identified as having residential development potential. In the longer term, it is possible that land in close proximity to some commercial sites could be developed. Some tentative discussions are taking place concerning commercial development potential on two sites. The area of land amounts to 5 hectares.
7.3 Mineral Extraction Development Opportunities
Currently there are two sites held by the Farms Estate that are within the Devon County Council Mineral Consultation Area for quarrying rock. There are another eight farms that straddle known reserves of rock that may be suitable for quarrying but some sites have low
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potential. Generally, mineral extraction sites are only developed where large reserves exist, as very significant investment is required for access, infrastructure, plant and waste handling. The development of new sites for mineral extraction on County Council farms may not occur for a good number of years, if ever. Three farms are located close to existing mineral extraction sites and it is possible that in the longer term a significant expansion of these sites could lead to land being required by the mineral extraction companies. It is difficult to quantify the land take that may be required and any estimate is likely to be highly speculative without more detailed investigation.
7.4 Sites potentially required for schools
Consultation with staff in Children and Young Peoples Services (CYPS) Strategic Planning identified that new sites for up to four schools may be required over the next 10 years and in addition further land may be required to expand another 21 schools that are in close proximity to Farms Estate holdings.
The correlation between Farms Estate land and new school sites or school expansion sites is poor as the parishes that require new school sites have little Estate land nearby. Where Estate land is close to a settlement, there is a notable overlap between land potentially required for school expansion projects and land suitable for residential development. Eight primary schools and two secondary schools would fall into this category. If all these proceeded on new site at say one hectare per site for a primary school and five hectares per site for a secondary school approximately 18 hectares of land would be required. There could be a further 15 schools that require an additional 15 hectares of land but developing these sites would require a considerable relaxation of planning laws due to the farms in question being located some distance outside the existing settlement boundary.
7.5 Sites potentially required for other County Council Buildings (e.g. Offices)
No sites were identified as specifically being required at this time, but it is possible future needs could change that.
7.6 Sites potentially required for Waste Recycling Centres
Three sites were identified as potentially being suitable for waste recycling centres which could create a demand for 3 to 5 hectares.
7.7 Sites potentially required for Road Development Schemes
One site has been identified as specifically being required in the near future for a proposed road scheme, and a further three sites identified for proposed rights of way schemes.
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7.8 Sites potentially required for Environmental Schemes
Some sites have already been identified as land required to mitigate/offset the impact on biodiversity/wildlife of the County Council’s development proposals. An example of this relates to the proposed Kingskerswell by-pass scheme. Please see case study 9 in Appendix (viii) for further details. It is likely that following the Natural Environment and Rural Communities Act 2006, there will be a greater requirement for land for environmental offsetting in future but it is difficult to quantify the amount or location of land required.
As part of the review an exercise was carried out by the EEC Directorate staff to assess the environmental benefit created by the Estate and it was noted the Estate has over 60 Entry Level Agri- environment Scheme contracts together with a significant number of Countryside Stewardship Schemes and Environmentally Sensitive Area Schemes still running (Natural England data). A number of Farms Estate holdings also contain historically important features and sites of significant wildlife value.
7.9 Sites potentially required for Allotments/Community Growing
Four parishes already benefit from the provision of allotments on the Estate and residents in seven other villages have made contact with the Farms Estate Manager over the last 24 months with tentative requests for new allotment sites. If it were assumed that two thirds of villages could successfully form an allotment and/or community growing organisation and that an average village allotment/community growing plot is about 0.5 hectares, based on current demand 2 to 3 hectares may need to be considered for release as allotments/community growing, subject to agreement from both the tenant and County Farms Committee.
With the Estate working with the Community Council of Devon to deliver the ‘Home Grown Community Owned’ (HogCO) initiative, further requests from communities in Devon can be expected.
7.10 Sites potentially required for Power Generation Schemes
A recent survey of the whole Estate has been carried out by Wardell Armstrong International Consultants who have identified locations where there exists very good, good or medium potential for large scale sustainable wind generation and construction of wind turbines in excess of two megawatts. They have recommended detailed feasibility studies are carried out.
In addition, from a desktop study, Wardell Armstrong considers there are another 14 sites that may be suitable for smaller scale wind generation. The footprint of wind turbines is modest (so the land take is
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minimal), but it is recommended that as much land around these sites is retained as possible to ensure adequate control of the planning and development process should the Authority ever decide to pursue wind energy generation opportunities on the Estate.
It is understood that ten potential sites for micro-hydro power generation have been identified and need to be investigated further.
Farm-scale power generation from anaerobic digestion (AD) has not yet been evaluated but it is possible that the Estate may have sites suitable for these technologies. Recent research by Cornwall County Council and Exmoor National Park has suggested AD may be viable on smaller farms than previously considered.
It is also possible the Estate could be used for the production of biomass energy from coppice or other crops but to date no tenants have put forward any plans to grow or produce biomass.
7.11 Sites potentially required for other purposes
Recently some community colleges have expressed interests in occupying Estate land as a resource to support the new Land Based Diplomas. In one case (St Luke’s College, Exeter) a suitable parcel of land has been offered to the college for use under licence.
7.12 Estimated total size of the Estate to be retained for non-farming objectives
Aggregating all the potential requirements where it has been possible to quantify areas, it is considered that approximately 250 hectares of land may be required in total, but it needs to be recognised that there are overlaps between various requirements.
In addition, areas of land for renewable energy needs, potential mineral extraction, potential environmental schemes and/or mitigation of biodiversity impact have not been quantified and they could significantly increase the land holding required to meet certain strategic needs.
The Farms Estate contains a considerable quantity of land which over time can be disposed of to generate sizable enhanced capital receipts and/or provide land to support the diverse activities of the County Council. It may be argued that the County Council land holding could be confined to the land required to fulfil the above objectives, but the review team consider this would not provide a diverse Estate that has scope to support the future needs of the County Council.
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8.0 Key factors within the agricultural industry that have influenced the viability of agricultural businesses
8.1 Farming is and will remain an industry that continuously evolves. Influenced by global market forces, climatic changes, World Trade Organisation (WTO) and European Union (EU) market intervention, EU and Government legislation, technological advances and other internal and external pressures, farmers have always adapted to meet new challenges.
8.2 The rapid increase of commodity production during the last century led to European and World food mountains followed by market interventions and production controls levied on EU member states by the Common Agricultural Policy (CAP).
8.3 Now, however, with the food mountains greatly diminished, drought, flooding and other natural disasters, coupled with a growing world population and the 2002 CAP Reform, food security is now back on the global agenda. This has led to a recent strengthening of commodity prices in most agricultural sectors but, with production costs rising as quickly if not more quickly than output costs, farmers are forced to operate in a new cost-driven environment. This pressure is undoubtedly exacerbated by the competitive purchasing power of major retailers and the pursuit of universally cheap food.
8.4 In the main, the response of the farming community has been to enlarge individual units that are highly specialised, benefit from economies of scale, are able to maintain a competitive edge and continue to be profitable.
8.5 It is for these reasons that farm size is presumed to be a critical factor to profitability. That assumption is, however, changing, particularly in rural pastoral counties such as Devon, which is rich in traditional small farms that do not have the scope to compete in a global commodity market. This is perhaps why Devon and other similar pastoral counties appear rich in innovation and diversity with farmers identifying and capitalising on niche markets and the consumers’ desire for local foods. This enables farmers to generate greater profits from a smaller land base. With innovation, drive, ambition and an eye for a new market place, most farms, irrespective of size, can remain profitable. This is certainly what we are experiencing in abundance on the Estate. The business plans by prospective new entrants looking for tenancies on the Estate mean the prospects for profitable, relatively small, farm businesses looks bright.
8.6 The question is “will it provide enough profit to enable the business to develop, grow, expand and move on?” The answer is, in most cases, possibly not when considered in isolation but then many people (particularly our tenants) have more than one job to generate income.
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Farmers are also extremely hard working and will continue to sacrifice ‘lifestyle’ to grow their business and generate profits.
8.7 New entrants to this special industry fully appreciate the challenges they face and to meet the challenges ahead, the farming industry needs those new entrants.
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9.0 Comparison of rental income with rates that are secured by other County Councils, in the private sector, investment in government securities and savings on potential borrowing.
9.1 Current overall Return on Capital
It is important to set out the headline cumulative financial achievements of the Farms Estate between 2002/03 to 2008/09
• Net Rental Income - £1,386,947
• Capital Receipts Secured - £14,789,544
• Increase in value of farm estate
(after capital receipts secured) - £717,206
• Aggregate of all of the above - £16,893,677
If this is reflected as a percentage of the 2002 Farms Estate value (£18,098,345), then the return on capital has been considerable at 93%.
If this is compared to the cumulative annual percentage returns from other sources of investment over the same period the comparative performance of the Farms Estate has been very favourable.
• UK Equities - 45.00% (FTSE All Share)
• Oversees Equities - 34.40% (FTSE World Excl UK)
• UK Bond - 35.3% (FTSE UK Gilts All Stocks)
• Oversees Bonds - 22.30% (JP Morgan Excl UK)
• Index Linked Bonds - 38.30% (FTSE Index Linked All)
• Cash - 30.50% (DCC Pension Fund Cash)
• Property - 74.60% (IPD Monthly)
• DCC Pension Fund - 48.50% (DCC Pension Fund All)
Possibly the most important comparator is against the mixed portfolio of the County Council pension fund (which outperforms most other local authority pension funds) and the return from the Farms Estate shows a very good comparative performance.
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9.2 Comparative Rental Incomes secured by Local Authority Farm Estates in the South West
To compare rental incomes, the CIPFA (the Chartered Institute of Public Finance and Accountancy) Farm Comparison Statistics can be used. It should be noted that these figures give a reasonable guide but some counties include all their bare land holdings including those not in agricultural production and these distort the figures to some degree. In addition, rents secured by individual estates will also be dramatically affected by the land grades within their holding, the structure/size of the estate and the general infrastructure available on farms within the Farm Estates.
Table 7 – Average rents of the South West County Council Farms Estates
Local 02/03 03/04 04/05 05/06 06/07 07/08 08/09 Authority Rent/ha Rent/ha Rent/ha Rent/ha Rent/ha Rent/ha Rent/ha £ £ £ £ £ £ £
Devon 187.80 190.10 195.20 190.90 194.36 190.31 196.91
Cornwall 171.30 171.30 168.10 223.60 230.04 191.03 214.10 Dorset 208.20 213.40 213.40 215.90 209.32 215.46 218.84 Somerset 187.80 181.60 199.40 188.20 199.43 223.67 N/A Hampshire N/A 197.30 200.90 247.10 236.47 206.78 245.56 Gloucestershire 204.0 199.0 211.1 220.9 224.27 228.27 259.93 Wiltshire 194.9 194.8 210.0 200.2 201.81 199.73 211.32
Overall, the Devon Farms Estate rental income is lower compared to average rental income but, while the average achieved is approximately £230 per hectare, this could easily be affected by the aforementioned distortions. Also, it is notable in Gloucestershire, Wiltshire & Hampshire that rents are higher. It is considered that this is due to higher residential values inflating farm rents quite substantially.
9.3 Comparative Rental Incomes secured by other Landlords in South West
When comparing Devon Farms Estate rental income in 2008/9 (average £197/ha) with the DEFRA Farm Rents Survey for 2008 (average £136/ha for Full Agricultural Tenancies and £160/ha for Farm Business Tenancies) the rents achieved by the County Council look both sound and respectable.
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Table 8 - Average Rents on Full Agricultural Holdings Act Tenancy Agreements (AHA 1986) (£/ha) in England by Farm Type 2008 as published by DEFRA 21st Jan 2010 in “Farm Rents 2008 – England” – sample based on 1.7 million hectares
Type of Farm 2004 2005 2006 2007 2008 Cereals 136 136 138 133 138 General Cropping 153 155 158 149 164 Dairy 149 152 143 158 167 Cattle & Sheep - 40 38 53 55 54 Less Favoured Areas Cattle & Sheep - 107 109 106 113 123 lowland All Farms 123 129 132 130 136
Table 9 - Average Rents on Farm Business Tenancy Agreements (ATA 1995) (£/ha) in England by Farm Type 2008 as published by DEFRA 21st Jan 2010 in “Farm Rents 2008 – England” – sample based on 1.0 million hectares
Type of Farm 2004 2005 2006 2007 2008 Cereals 175 157 150 158 158 General Cropping 232 218 210 202 222 Dairy 152 146 147 153 152 Cattle & Sheep - 68 70 62 65 65 Less Favoured Areas Cattle & Sheep - 102 107 85 87 96 lowland All Farms 171 157 150 130 160
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10.0 Tenant Profile
Table 10 - Age profile of tenants on the three different tenancy agreements
Type of Tenancies Age Profiles 2002 Age Profiles 2009
AHA 86 Lifetime Total = 32 Total = 20 20-29= 0 20-29= 0 30-39 = 0 30-39 = 0 40-49 = 1 40-49 = 0 50 -59 = 17 50 -59 = 8 60-69= 10 60-69= 9 70-79= 3 70-79= 2 80+= 1 80+= 1
AHA 86 Retirement Total = 34 Total = 22 20-29 = 0 20-29 = 0 30-39 = 2 30-39 = 0 40-49= 17 40-49= 4 50 -59 =14 50 -59 = 15 60-65= 1 60-65= 3
ATA 95 FBT Total = 42 Total = 40 20-29 = 2 20-29 = 3 30-39 = 26 30-39 = 9 40-49 = 14 40-49 = 22 50 -59 = 0 50 -59 = 4 60-69= 0 60-69= 2* 70-79= 0 70-79= 0 80+= 0 80+= 0
*NB: Retirement agreements with former 86 Act tenants
Table 10 shows the age profile of the current Estate tenants split into their respective tenancy types. Tenants on AHA 1986 ‘lifetime’ tenancies have the right to occupy their farms until death. Tenants on AHA 1986 ‘retirement’ tenancies can continue to occupy their farms past the age of 65 unless the Landlord serves a valid Case A Notice to Quit. The notice can only be served if suitable alternative accommodation is offered to the tenant. Alternative accommodation may be difficult to provide although opportunities to secure such accommodation are currently being explored. There is no succession rights for tenants of AHA 1986 holdings let as part of Local Authority smallholding Estates.
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Table 11 - Primary farming system operated by tenants on the three different tenancy agreements
Type of Farm Use 2002 2009
Primarily Dairy Total 94 (87%) 52 (63%) Lifetime 27 14 Retirement 28 15 FBT 39 23
Mixed Total 14 (13%) 30 (37%) Lifetime 5 6 Retirement 6 7 FBT 3 17
Total 108 82
Table 10 shows the farming system operated by current tenants on the Estate. From 2002 to 2009 the number of dairy farms has fallen from 94 (87%) to 52 (63%). This has been due to tenant choice, market demand and unsustainable infrastructure for dairying. Mixed farming generally includes more diversified enterprises which may help tenants to pursue more options to progress off the Estate.
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11.0 Information on the number of tenants entering and leaving the Estate over the last 10 years.
Table 12 - Details of Tenants Progression through the system
Year Nursery/Starter Progression Beyond
2000 8 2 3
2001 0 2 1
2002 1 0 0
2003 3 2 2
2004 2 0 2
2005 1 0 0
2006 1 0 1
2007 3 1 2
2008 6 2 1
2009 4 1 2
11.1 Please note that some FBT tenants have been ‘promoted’ to progression status from new entrants of nursery or starter units without moving and without competition by virtue of the restructuring process.
These are: • Firsdon Farm, Ashreigney • Lower Chitterley Farm, Bickleigh • Middle Winsham Farm, Braunton • New Standon Farm, Bridestowe • Higher Artiscombe Farm, Gulworthy • Southacott Farm, Mariansleigh • Nutcombe Farm, Rose Ash • Endfield Farm, Sandford • Higher Bradaford Farm, Virginstowe • Cross Farm, Woolsery • Lower Northchurch Farm, Yarnscombe
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11.2 The throughput achieved is in line with the targets set for the restructuring phase and compares favourably with other Local Authority Estates across the South West.
11.3 With regard to progression moves beyond the Estate, of the 14 moves: • nine remained in Devon, four in the wider South West and one emigrated to farm in Canada • seven remained tenants of other landlords, six purchased farms and one entered a joint venture farming partnership
11.4 The ‘tensions’ between creating greater throughput of tenants and providing security of tenure was not underestimated at the time of the Best Value Review. Paraphrasing s.14 (2) of the report identifies a concern that remains a familiar problem for the Authority:
“There is one serious obstacle to this throughput: a severe shortage of let farms of the right size (say 300 to 400 acres) off the Estate for county farm tenants to move away to. These fourth and fifth rungs on the ladder have effectively been removed by private Estates’ own amalgamation schemes during the last 10 years”.
“This gap further up the ladder will soon create a real dilemma for the County Farms Committee when tenants come to the end of their 10 year FBT’s. If the Committee is determined to maintain momentum within the Estate it may have to be prepared to wave goodbye to tenants who have devoted 15 years to the Estate and who, through no fault of their own, have failed to find their ‘next’ farm. On the other hand if these tenants are allowed a further period of grace, of say five years, progression on the Estate starts to stultify”.
11.5 The aim of the proposed lettings policy is to strike a balance between the ability to offer opportunities to new entrants whilst also supporting existing tenants to establish and progress their businesses on and beyond the Estate.
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12.0 Questionnaire to all Devon County Council Farms Estate Tenants
12.1 The County Council’s Business Transformation Unit circulated, to all 83 Farms Estate tenants, the questionnaire attached at Appendix (xii). The response rate was 30%.
12.2 The majority of tenants responding to the Farms Estate questionnaire raised concerns regarding the adverse impact that the current short length of tenancy term has on their businesses, their families and their ability to progress within and off the Estate.
12.3 These concerns centre in the main around the effect short term tenancies have on a tenant’s ability to secure necessary borrowing, and to justify levels of their own investment in monetary, physical and emotional terms, needed to establish, maintain and progress viable and successful businesses and livelihoods on our farms.
12.4 A need for a closer working relationship between tenants, Land Agents and the Estate Committee was highlighted together with an understanding that, under the current management strategy and in the financial climate experienced in the period since the 2002 review, progressing off the Estate although not impossible was at best very difficult.
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13.0 Summary of areas where the Estate has created opportunities for the tenants to diversify and create businesses that have or could be sustained following departure from the Estate
13.1 In recent years more and more tenants have sought to diversify and create rural businesses that contribute directly and indirectly to the economic growth and prosperity in rural Devon.
13.2 Many of these diverse rural businesses create new rural employment opportunities, create inward investment for Devon and provide a wide range of goods and services.
13.3 It may be argued that compared with a dairy tenant, a more intensive rural business, capable of adding value and thereby generating greater profits from a smaller land holding, will be better positioned to buy sufficient land with or without a house or buildings to progress beyond the Estate and continue to grow and prosper.
13.4 Furthermore, it is becoming increasingly apparent that it may be these rural entrepreneurs who have the greatest prospect of progressing beyond the Estate in the tenanted sector. The review group has heard evidence suggesting that other Estates are divesting of their own dairy holdings and that the aspirations of Estates such as the Duchy of Cornwall and National Trust are increasingly seeking out rural businesses that will assist delivery of their core Estate objectives such as Estate product branding, sustainable food and farming, rural employment etc.
13.5 A summary of ten typical diversification ventures developed on the Estate are: • Higher Fingle Farm, Drewsteignton – MLC licensed abattoir, cutting and packaging plant with local and web-based sales, and contracts with Duchy Originals, Able and Cole and several others • Lower Parks Farm, Crediton – Cider and apple juice processing, bottling and marketing, the tenant is the Chairman of Crediton Farmers Market • Lower Farm, High Bickington – direct sales of pork, beef and chicken • Lomans Farm, Broadhempston – supply contract for beef and lamb with local butchers, sheep shearing service • Coppa Dolla Farm, Denbury – direct marketing beef box scheme/pedigree sales • Duckaller Farm, Dawlish – farm shop, holiday accommodation, hog roast and outdoor catering using own produce, caravan and boat storage • Churchlands Farm, Ermington – Riverford Organic vegetable contract, DIY livery
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• Cotley Farm, Ottery St Mary – care and respite provision for people with learning difficulties providing meaningful and rewarding activities on farm • New Ford Farm, Rockbeare – fencing contractor. The business developed to such an extent that the tenant was forced to choose between fencing and milking cows. The tenant chose to pursue the fencing contracting venture which employed seven people and surrendered the lease of the farm • Hurlditch Farm, Lamerton – Equine livery and loan facility for visitors to the region.
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14.0 Examples of educational or environmental initiatives the Estate has facilitated
14.1 The Estate is unquestionably a highly valuable environmental asset for the County Council. Since 2001 legislative changes, cross compliance, funding streams for agri-environment schemes and, more latterly, the voluntary Campaign for the Farmed Environment have played significant roles in enhancing the management and use of agricultural land to improve biodiversity.
14.2 Furthermore, with the careful and considered selection of informed and experienced tenants, environmentally-sensitive farming practices have been implemented without compromising the commercial aspirations of those progressive and enthusiastic farming entrepreneurs.
14.3 Evidence from the County Council’s Environment Directorate (data provided by Natural England) suggests the following
• Sixty of the eighty-four farms on the Estate are in ELS or OELS (a higher uptake than the rest of Devon and the wider South West region) • Five farms have part or all of a County Wildlife Site within the boundary • Two farms are adjacent to the Great Western Canal (a local nature reserve, County Wildlife Site and Devon County Council Country Park) • Two farms are immediately adjacent to the River Axe Site of Special Scientific Interest (SSSI) and Special Area of Conservation (SAC) • A large number of farms in the Teignbridge area support the protected Cirl Bunting
14.4 The delivery of educational initiatives on the Estate is, however, less advanced. Educational visits for school children, further and higher education students and community groups do take place but very much on an ad hoc and localised basis.
14.5 In 2006, the Estate began feasibility and development work with the support of Devon Curriculum Services and a LANTRA (the sector skills council for environmental and land based industries) and CEVAS (the Countryside Educational Visits Accreditation Scheme) accredited/trained tenant to develop a quality-assured purpose-built on- farm education centre. Sadly, by the time planning permission was granted in 2008 (subject to a very restrictive Section 106 agreement) other facilities elsewhere in Devon had been provided by the private sector creating sufficient competition to prejudice the viability of the Estate project.
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14.6 More recently the Estate has entered discussions with a number of colleges to explore opportunities to support the delivery of the new Land Based Diplomas.
14.7 Finally, one new tenant is currently exploring the possibility of becoming a LEAF (Linking Environment and Farming) demonstration farmer.
14.8 As things stand, it is likely that education on the Estate will continue to be delivered locally on an informal basis for local schools, and to support Bicton College’s academic programme, foreign agricultural university work placements, Open Farm Sunday, the Great British Breakfast campaign, Devon YFC Fresh-start Academy, various farming discussion groups etc.
14.9 A summary of ten typical environmental initiatives developed on the Estate are:
• Woodland Grant Scheme (WGS) - new deciduous woodland planted at Cobberton Farm, Dartington • WGS - new deciduous woodland planted at Merrifield Farm, Holsworthy • WGS - new deciduous woodland planted at Little Bickington Farm, High Bickington • WGS – felling and restocking of poorly managed deciduous woodland at Parks Farm, Crediton • Rights of Way Improvement Plan (ROWIP) – New Bridleway at Dungeons Farm, Cullompton • ROWIP – New Bridleway at Higher Slade Farm, Ilfracombe • Devon Farming and Wildlife Advisory Group (FWAG) – Whole Farm Management Plan at Lower Henland Farm, Kentisbeare • New hedgerow establishment at Tarrants Farm, Payhembury • New hedgerow establishment at Markhams Farm, Ide • New Barn Owl boxes provided at Thorndon Farm, Broadwoodwidger by The Barn Owl Trust following sightings of Barn Owls in the area as part of the Royal Society for the Protection of Birds (RSPB) Volunteer Farm Bird Survey
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The Devon County Council Farms Estate Strategic Review March 2010
15.0 Consultation with other commercial landlords within Devon to identify the likely level of opportunities that may be created within Devon over a five year period.
15.1 The review group widely consulted with other landlords in Devon and representatives of the National Trust Estate, Duchy of Cornwall Estate, Clinton Devon Estate and Crown Estate were interviewed.
15.2 The evidence presented by these consultees was that a very modest number of opportunities come to the open market each year. Very often within these estates tenancies are ‘ring fenced’ and farms are often amalgamated with other tenancies. This allows residential accommodation to be split from the farm holding and increased overall rents to be secured. A notable trend in these estates is that there has been a diminishing number of farms let as dairy holdings and it is expected that this trend will continue. In effect the number of farms let as dairy units will be few and far between.
15.3 Comments in relation to likely availability of tenancies were:
• National Trust – commented that “The turnover is quite low. Farms are open for everyone and we are happy to take your tenants but I can’t think of anybody we have taken on [from the County Council Farms Estate]”.
• Duchy of Cornwall Estate – commented that “We have very few farms available and we don’t know when farms will come back but there is some potential for farms to come on the open market”.
• Clinton Devon Estates – commented that “We have a number of forward thinking progressive tenants that we are happy to let additional land to [rather than re-let complete holdings on the open market]”
• Crown Estate – commented “Opportunities [for tenancies] on private estates are few and far between”. But on a more positive note stated that the County Council tenants they have met “presented very well. It is a small sample but there are some cracking [County Council] tenants out there. It gives me confidence in letting to other County Council tenants; those we have already got are very good.”
15.4 Other Estates have also made complimentary comments about Devon County Council farm tenants.
15.5 This trend of limited private estate opportunities is not unique to Devon and a similar pattern exists in neighbouring counties. The land agents for Cornwall, Somerset, Dorset, Wiltshire and Gloucestershire all reported that opportunities for tenants to move to other Estates outside the Local Authority were extremely limited.
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The Devon County Council Farms Estate Strategic Review March 2010
15.6 Devon County Council tenants (in common with those of all other County Council Estates) face considerable competition from their fellow tenants and a wide range of others to secure tenancies beyond the County Farms Estate.
15.7 In the last eight years the Farms Estate Team has identified 34 potential opportunities to rent farms in the private sector and have circulated details and letting particulars to Estate tenants. Please see Appendix (x) for the full schedule of farm details circulated.
15.8 Given the considerable competition for tenancies off the County Council Estate, tenants have to look at a number of alternatives* if they wish to continue farming after they leave the Estate.
(*These alternatives include purchasing farms or farmland, share farming, contract farming or developing diversification projects)
15.9 It should, for the avoidance of doubt, be stressed that although this consultation was confined to Devon, tenants are expected to explore all realistic opportunities to progress, irrespective of location.
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The Devon County Council Farms Estate Strategic Review March 2010
16.0 Summary of the anticipated headline position for the next five years.
Table 13 – Core Estate structure and financial analysis forecast
Target 2008/09 2013/14 Actual Estimated Size of Estate (Ha) 4031 4000 Number of tenants 84 70
Net Revenue Income (£) 303,621 300,000
Capital Asset Value of Estate (£) 18,815,551 19,000,000
Capital reserve balance forecast at 2,486,000 n/a 31.3.2010 (£) Net Agricultural Capital receipts (5 year 6,683,367 3,965,000 cumulative) (£) Net Development Capital receipts (stpp*) n/a 21,000,000 (5 year cumulative) (£) *stpp means subject to planning permission
16.1 The terms of reference required the net revenue rate of return to be forecast for the future but the calculation is dependent on too many unknown variables at this stage to provide any meaningful insight.
Notes and assumptions: 1. The net size of the Estate will only reduce marginally as some land is sold on an in/out basis to finance the acquisition of more strategically located and better quality land.
2. The number of tenants is reduced based on a current best estimate of farms capable of being sold and/or leases surrendered.
3. The revenue income is based on the assumption that by 2013/14 the majority of farms will be let on FBTs at open market value, agricultural economics remain relatively buoyant and the land holding and number of farms remains as forecast.
4. The capital asset valuation is based on the assumption that rural property prices will increase and fewer holdings will be subject to 86 Act tenancies.
5. The capital receipts forecast for agricultural property is dependent on officers being able to ‘negotiate’ possession or sales to sitting tenants of holdings let on 86 Act agreements.
6. The capital receipts forecast for development sales is high risk and subject to planning consents being secured.
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The Devon County Council Farms Estate Strategic Review March 2010
16.2 Farms Backlog Maintenance
Prior to the farms review, a number of concerns were raised about the level of backlog maintenance within the Farms Estate. This was reported in March 2009 as being £1,827,421.
In September 2009, the Chairman of the Farms Committee (Cllr Jerry Brook) and Jon Williams (Business Transformation Unit) visited seven farms around Devon which were reported to have high backlog maintenance figures (all these farms were identified as farms to be retained).
During the visits, items on the backlog maintenance schedule were examined and the reviewers identified the items that they considered were ‘business critical’, those being items that were currently important to the proper functioning of these farms.
A number of items within the schedule were identified as follows - not being necessary until the medium or longer term, having a financial provision that were considered excessive, some items included that were tenants’ responsibilities rather than County Council’s and a number of items in the schedule already addressed by either the tenant or the County Council since the schedule was put together.
The total backlog maintenance provision for the seven farms visited was £246,847, whereas it was considered the business critical requirement was £89,675.
Thus the business critical provision was calculated as 36.3% of the total figure identified in the backlog maintenance schedule.
Over a period of time other items within the backlog maintenance schedule will become business critical and will need to be addressed. But the business critical figure gives a better idea of priority work that is needed.
If the 36.3% calculated above were to be extrapolated and applied to the total farms backlog maintenance of approximately £1.8million, the overall business critical figure for the whole Estate would be around £700,000.
A body of work needs to be done to examine the backlog maintenance schedules for each of the farms to identify the items that are business critical at each farm. The priority over the next five years should be to drive down business critical items on farms.
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The Devon County Council Farms Estate Strategic Review March 2010
17.0 SWOT Analysis (Strengths/Weaknesses & Opportunities/Threats Analysis) of potential scenarios for the Estate.
Set out below are SWOT analyses for the options considered by the review group together with a summary explanation of why they have been accepted or rejected
17.1 Expansion of the Farms Estate
Strengths Few Weaknesses Could only be funded by unsupported borrowing and this is not achievable Opportunities More opportunities could be made available to new entrants Threats Ongoing investment in estate would be jeopardised
In summary expansion is not seen as achievable in the current economic climate and there is no capital available to support it.
17.2 Maintain the Estate at its current size
Strengths Potentially maintain the economies of scale for operating the estate Weaknesses Maintenance of the infrastructure of the estate would be more difficult to sustain Opportunities Level of opportunities to new entrants would potentially be increased as AHA tenants retire Threats Ongoing investment into the estate would be considerably less sustainable
Demands for capital improvements relating to the Nitrate Vulnerable Zone (NVZ) regulations and general infrastructure upgrades make this option impractical.
17.3 Make modest strategic reductions to the Estate to improve performance
Strengths Capital could be released to support investment with statutory requirement items and maintain/improve the general infrastructure Weaknesses Improvements would be limited by the amount of capital that could be made available from disposals Opportunities The condition of the estate could generally be improved to reduce maintenance and deterioration of the estate Threats Modest reductions in the number of opportunities to new entrants
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This could be achieved by releasing capital from a limited number of disposals to be invested in NVZ works and improved infrastructure.
17.4 Scale down the Estate to a size required to meet the needs of only having a strategic land bank
Strengths Capital could be released for other County Council functions but to achieve best value this would be over a considerable period of time as and when vacant possession could be secured from tenants on lifetime or retirement tenancies Weaknesses The cost of operating the residual estate pro rata would be greater Opportunities Capital potentially available over a long period of time Threats This would dramatically reduce the opportunities to new entrants and this would be widely viewed by the agricultural industry in a negative manner
This option is not desirable as the added value of the Estate would be lost and the running costs per unit size would be greater.
17.5 Sell the Estate in its entirety
Strengths Capital could be released for other County Council functions over a prolonged period. In order to achieve best value this would be over a considerable period of time as and when vacant possession could be secured from tenants on lifetime or retirement tenancies Weaknesses This would eradicate the opportunities to new entrants and would be widely viewed in the agricultural industry in a highly negative manner Opportunities Few for Farms Estate but some opportunities for the County Council Threats As above for weaknesses
This option would take 20 to 30 years to achieve full value or if done rapidly the vacant possession discounting would significantly reduce the realisable value.
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18.0 Conclusions
18.1 The review concluded that the Farms Estate is integral to the County Council in delivering its wider aims and objectives and in order to remain so the maximum number of farms is to be retained within the Estate.
18.2 The Farms Estate has experienced a long period of under investment. To meet current and future statutory obligations, and the significant inward investment in infrastructure required to bring the farms up to an acceptable standard, it is proposed that 100% of future receipts from the sales of farms including farm buildings shall be retained by the Estate. The progressive changes in agriculture and consumer trends are leading to increasing entrepreneurial innovation by tenants and this requires robust and diverse infrastructure on the Estate. Revenues from the sales of land for non farming purposes should remain at the current ratio of 16% retained by the Estate and 84% returning to the corporate capital programme.
18.3 To ensure future capitalisations do not compromise the long term strategy of the Estate, an asset management plan will be produced to guide the process. It will need to have a degree of flexibility however, so that the NVZ statutory requirements can be met.
18.4 The Estate has been managed in accordance with the Agriculture Act 1970 and will continue to be managed under that legislation.
18.5 The current Farms Estate letting policy has followed the terms of the 2002 management strategy. Whilst this has essentially worked evidence from numerous consultees to this review including the Devon County Council Tenants Association indicated that the strategy was failing to meet the requirements of tenants to develop businesses within the given time frame that would facilitate moving off the Estate. The proposed strategy in appendix (v) sets out an incremental timetable with a maximum term of 25 years and with an inbuilt flexibility that allows the Farms Committee to consider requests for tenancy extensions.
18.6 Whilst many of our farms need an infrastructure upgrade it is essential that careful and considered thought is given to sanctioning specific inward investment. Such investments will be influenced by a range of criteria and it is for that reason it is considered appropriate that the Farms Committee ensure future expenditure enhances the value of the Estate and is commensurate with the size and nature of that particular farm.
18.7 The proposed tenancy strategy affords a greater opportunity for tenants to invest and then to recoup an acceptable return. It is in the interests of both the tenant and landlord that this should be encouraged. Landlord consent letters will be offered to tenants after
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negotiating an agreement at an early stage in order to give reassurance that appropriate compensation for improvements will be available.
18.8 Tenancy agreements have historically covered most aspects of the on farm maintenance and repair liabilities. However, evidence is proving that much of that work is not critical to the continuance of the business conducted on the farm. Where such work is a priority the Estate needs to identify those requirements and create a structured plan to effectively address those problems. The share of the maintenance liability has traditionally been weighted towards the landlord. Effectively identifying and commissioning those repairs has not always resulted in conclusive outcomes. Futuristically it would be advantageous to both the Estate and the tenant if this division of responsibility could be reconsidered by the Farms Committee when deciding new agreements.
18.9 Opportunities for tenants to progress off the Estate rely partly on the Estate promoting the quality of our tenants to the private sector. Maintaining this relationship and dialogue with the private sector estates will ensure that prospective letting opportunities are not missed.
18.10 We have an obligation under the Agricultural Holdings Act to offer suitable alternative accommodation to some of our tenants at retirement. To this end we need to identify suitable sites perhaps in partnership with Housing Associations and District Councils where some dedicated housing can be provided.
18.11 The Estate has much to offer socially, economically and environmentally for the people of Devon. Those benefits come from a variety of sources and in their own way contribute to the overall well being of this County. Whether it is through farm holiday accommodation, supplying local markets, providing children with learning experiences or improving biodiversity, the list is extensive. These contributions have been undervalued in the past, often by our own Authority. We are privileged to have an Estate that offers so much and should acknowledge it and use it.
18.12 A number of our tenants organise open days and a regular farm visiting programme for school children. The Estate is an important asset available to contribute to improving children’s understanding of food, farming and the environment and should be actively promoted as such an asset.
18.13 The opportunities presented by the Estate’s geographic spread and diversity of farming systems offers the potential for an increased collaborative partnership with our local agricultural colleges and land based institutions. To actively progress this would be beneficial for all concerned.
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18.14 Tenants who express an interest in providing socially rewarding activities to the wider community should be encouraged and assisted wherever possible to ensure that those projects come to fruition for the benefit of others.
18.15 Agri-environmental schemes are now an integral part of maintaining and enhancing the environment. It is important that farmers on this Estate are encouraged to implement schemes that deliver beneficial environmental projects and enhance biodiversity. However, we must accept such schemes need to be complementary to the business aims of the tenant and not overly obstructive to revenue generation and the tenant’s eventual progression.
18.16 Climate change and energy security is an increasing priority. The natural resources available on the Estate could and should be utilised sustainably.
18.17 Many new entrants to the Estate have, in recent times, implemented farm businesses augmented by diversification projects. Some of those tenants have received funding from initiatives like the Rural Development Programme for England. Tenants that pursue diversification projects often increase the value of products leaving the farm which enables them to generate sufficient capital to move off the Estate quicker. The process of applying for grant aid is not always straight forward and often requires specialised assistance in the application process. To this end the Estate must, where applicable, not only encourage such projects but actively assist in the processes of getting the project started.
This review has been convened two years before the current strategy ends. The proposed changes in the recommendations are in some instances very different to the current strategy. Therefore it is only realistic that on accepting this review’s recommendations they supersede any prior strategies.
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Appendix (i)
Table 14 - Key Estate targets and delivery to date
Targets 2002/03 2008/09 target 2008/09 actual
No of holdings 103 73 84 (Residential units) Ratio (N:S:P) 6:60:37 6:30:37 6:39:39 Size of Estate (ha) 4330 3992 4031 Average size of 28:35:49 28:42:64 28:33:62 holdings S:N:P(ha) Number of tenants 103 ? 94 Number of lettings 0:3:1:0 0:2:2:2 0:4:1:2 (N:S:P:beyond) Cumulative number of 41 new entrants 19 21:6:9 (total36) lettings (1992 to 2002) (2002 to 2009) (N/S:P:beyond) Estimated value of £18,098,345 N/A £18,815,551 estate – Existing use Net Income (Rental £267,000 £234,000 £304,000 Income less operational expenses) Capital Receipts £2,059,021 £1,000,000 £2,763,604 Cumulative Capital £8,600,000 £9,094,330 £14, 789,594 receipts over plan (1992 to 2002) (2002 to 2009) (2002 to 2009) period Current backlog £1,030,000 N/A £1,827,421 maintenance (2003) Capital investment £444,574 £340,000 £508,697
Cumulative capital £2,600,000 £1,455,093 £1,964,026 investment over plan (1992 to 2002) (2002 to 2009) (2002 to 2009) period Net revenue rate of 0.51% 0.76% 0.99% return
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The Devon County Council Farms Estate Strategic Review March 2010
Appendix (ii) Table 15 - An Estate Property Asset Schedule
Parish Farm Farm Area Primary Use Number of Name Name (acres) Dairy or Dwellings Mixed
ASHREIGNEY FIRSDON FARM 79.99 dairy 1 or 2 FURZE BARTON 134.00 dairy 1 FURZE COTTAGES 105.32 dairy 1
AYLESBEARE TOPSHAYES FARM 72.70 dairy 1 LOWER BARTON FARM 66.27 dairy 1 BARTON FARM 59.90 dairy 2
BERE FERRERS ALLOTMENTS 10.77 mixed bare land
BICKLEIGH (PLYMOUTH) WHITSUN FARM 36.26 mixed bare land
LOWER CHITTERLEY BICKLEIGH (TIVERTON) FARM 78.22 mixed 1
BIGBURY HIGHLANDS 152.64 dairy 1
BOVEY TRACEY MOORHOUSE 89.85 mixed 1 MIXING BARN 96.27 mixed 1
BRATTON FLEMMING BEARA DOWN FARM 98.90 mixed 1
BRAUNTON MIDDLE WINSHAM FARM 121.00 mixed 1
BRIDESTOWE NEW STANDON FARM 108.96 dairy 1 COBHAM WEEK 101.00 mixed 1
BROADHEMPSTON LOMANS FARM 66.05 mixed 1
BROADWOODWIDGER THORNDON FARM 119.34 mixed 1
BUCKLAND BREWER NORTH HELE 103.73 dairy 1
BURLESCOMBE WESTCOTT 209.00 dairy 1 GREAT SOUTHDOWNS 179.44 dairy 2
CHITTLEHAMPTON GREAT BLAKEWELL 148.52 dairy 1
CHURCHSTOW HIGHER LEIGH 109.27 mixed 1
COLYTON NUNFORD 72.19 dairy 1
COPPLESTONE TAPPS FARM 64.52 mixed 1
CREDITON PARKS FARM 84.34 dairy 1 LOWER PARKS FARM 60.22 mixed 1
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CULLOMPTON DUNGEONS FARM 160.01 mixed 1
DARTINGTON COBBERTON 54.63 dairy 1 PART COBBERTON 61.16 mixed bare land PART COBBERTON 28.62 mixed bare land
DAWLISH DUCKALLER FARM 88.49 mixed 1 NEW GULLIFORD 90.31 mixed 1 LAND AT PORT ROAD 0.82 mixed bare land LAND AT COFTON CROSS 1.46 mixed bare land
DENBURY BUCKRIDGE FARM 63.66 mixed 1 COPPA DOLLA 72.54 mixed 1 FAIRFIELD 127.54 dairy 1
DIPTFORD FROGWELL LAND 72.13 mixed bare land
DOWN ST MARY MIDDLE YEO FARM 90.70 mixed 1
DREWSTEIGNTON EAST FINGLE 64.85 mixed 1 HIGHER FINGLE 56.28 mixed 1 SMITHS CROSS FARM 98.45 mixed 1
ERMINGTON CHURCHLANDS FARM 37.30 mixed 1
PINHOE MONKERTON FARM 85.00 bare land
GULWORTHY HIGHER ARTISCOMBE 229.83 dairy 1
HALBERTON CORDWENTS FARM 47.65 mixed bare land
HOLCOMBE MANOR FARM 131.10 mixed 1
HIGH BICKINGTON LOWER FARM 82.60 mixed 1 LITTLE BICKINGTON FARM 20.19 mixed 1
HOLSWORTHY MERRIFIELD 73.30 mixed 1
IDE MARKHAMS FARM 190.93 dairy 1 ALDENS 26.11 mixed bare land
ILFRACOMBE HIGHER SLADE FARM 124.82 mixed 1
IPPLEPEN BULLEIGH ELMS FARM 247.29 dairy 1
KENTISBEARE HOLLIS BARE LAND 66.29 mixed bare land LOWER HENLAND 103.64 mixed 1 HIGHER HENLAND 114.59 mixed 1
KENTISBURY BARTON 1 16.90 mixed 1 BARTON 2 133.00 dairy 1
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KNOWESTONE EAST HILL FARM 17.87 1 MIDDLECOTT LAND 17.82 mixed bare land
LAMERTON HURLDITCH 140.75 dairy 1
LANDKEY VENN CROSS FARM 61.23 dairy 1
LYDFORD PRESCOMBE FARM 112.35 mixed 1
MARIANSLEIGH SOUTHACOTT FARM 165.50 dairy 1 LOWER UPPACOTT 136.16 mixed 1
MARWOOD CHAPEL FARM 171.72 dairy 1 PRIXFORD BARTON 164.74 mixed 1
MILTON ABBOT NORTH GROUND FARM 113.43 mixed 1 UPPATON FARM 114.44 dairy 1
MUSBURY WATERFORD FARM 65.21 dairy 1 BAXTERS FARM 71.26 dairy 1
NORTH TAWTON SLADE FARM 62.05 mixed 1
OKEHAMPTON HAMLETS SOUTHCOTT 197.72 dairy 1
OTTERY ST MARY COTLEY 119.25 mixed 1 HIGHER THORNE 26.74 mixed bare land
PAYHEMBURY TALE HOUSE FARM 55.35 mixed 2 TARRANTS FARM 165.00 dairy 1 TALE BUILDINGS 1.00 bare land
RATTERY GLEBE FARM 47.54 mixed bare land
ROBOROUGH TEN OAKS FARM 193.79 dairy 1 NEWCOMBES FARM 10.00 bare land
ROCKBEARE LITTLE ALLERCOMBE 49.95 mixed bare land NEW FORD FARM 116.48 mixed 1
ROSE ASH NUTCOMBE FARM 181.29 dairy 1 EAST CATKILL 149.37 dairy 1
SANDFORD ENDFIELD FARM 134.00 dairy 1
LOWER DORWEEKE SILVERTON LAND 73.50 mixed bare land
SOUTH BRENT KERSWELL FARM 93.29 dairy 1 LOWER KERSWELL 57.23 dairy 1 SOUTH MOLTON GREAT STONE 180.34 dairy 1 LITTLE STONE 100.95 dairy 2
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SOUTH TAWTON EAST WEEK FARM 96.58 mixed 1 LOWER EAST WEEK 74.88 mixed 1 EAST WEEK 2 2.00 bare land
TAVISTOCK HIGHER WILMINSTONE 90.50 mixed bare land
UFFCULME SOUTHWOODS LAND 67.93 mixed bare land
VIRGINSTOWE HIGHER BRADAFORD 137.04 dairy 1
WEST ANSTEY GREENHILLS FARM 112.49 dairy 1
WEST PUTFORD GLEBE LAND 67.93 mixed bare land
WHIMPLE PERRITON BARTON 78.24 dairy 1
LAND AT STUCKEY WITHERIDGE FARM 4.25 mixed bare land
WOODBURY LOWER PILEHAYES 109.77 dairy 1
WOOLSERY CROSS FARM 94.23 dairy 1 LOWER ALMINSTONE 89.23 dairy 1
YARNSCOMBE LOWER NORTHCHURCH 125.88 mixed 1
TOTAL 10 ,009.13 87
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(! 0067 HIGHER SLADE FARM 0137 THE BARTON - 1 (! 0138 THE BARTON - 2 Appendix (iii)
0104 MIDDLE WINSHAM FARM Ë (! 0066 HIGHER MUDDIFORD FARM LAND 0010 BEARA DOWN FARM 0119 PRIXFORD BARTON (! (! (! 0016 CHAPEL FARM
(! 0145 VENN CROSS FARM
! 0056 GREENHILLS FARM 0082 LITTLE STONE FARM 0055 GREAT STONE FARM ( 0095 LOWER NORTHCHURCH FARM (!(! (! (! 0012 GREAT BLAKEWELL FARM 0098 LOWER UPPACOTT FARM (! 1193 LAND AT KNOWSTONE 0030 CROSS FARM 0083 LOWER ALMINSTONE FARM 0091 LOWER FARM (! (! (! (! 0114 NUTCOMBE FARM (! 0113 NORTH HELE FARM (! 0125 SOUTHACOTT FARM 0038 EAST CATKILL FARM (! 0136 TEN OAKS FARM 0051 FURZE COTTAGES 0149 WESTCOTT FARM (! 0050 FURZE BARTON 0046 FIRSDON - 1 (! (! 0127 GREAT SOUTHDOWN FARM (!(! (! (! 1255 CORDWENTS FARM (! 0128 SOUTHWOODS FARM
1257 HOLLIS FARM(! - 1 0092 LOWER HENLAND 0101 MERRYFIELD FARM (!(! (! 0063 HIGHER HENLAND FARM 0105 MIDDLE YEO FARM 0037 DUNGEONS FARM 1259 LOWER CHITTERLEY FARM - 2 0044 ENDFIELD FARM (!(! 0068 HIGHER WEAVER FARM (! (! (! 0123 SLADE FARM (! (! 0134 TAPPS FARM 0133 TALE HOUSE FARM(!(! 0135 TARRANTS FARM 0096 LOWER PARKS FARM 0116 PARKS FARM(!(! (! 1197 PERRITON BARTON
0140 THORNE FARM 0126 SOUTHCOTT FARM 0139 THORNDON HOUSE FARM 0079 LITTLE ALLERCOMBE FARM (! 1196 NUNFORD FARM 0009 BAXTERS FARM 0058 HIGHER BRADAFORD FARM (! (! (! (!(!(!1262 WATERFORD FARM (! 0108 NEW FORD FARM 0027 COTLEY FARM 0175 LOWER EAST WEEK 0061 HIGHER FINGLE FARM 0008 BARTON FARM (! (! 0040 EAST WEEK FARM - 1(!(! 0041 EAST WEEK FARM(! - 2 (!(! 0142 TOPHAYES FARM (! (! 0039 EAST FINGLE FARM 0084 LOWER BARTON FARM 0124 SMITHS CROSS FARM 0100 MARKHAMS FARM 0110 NEW STANDON FARM (! 0097 LOWER PILEHAYES FARM 0020 COBHAM WEEK(!(! (!
(! 0118 PRESCOMBE FARM 0106 MIXING BARN FARM 0107 MOORHOUSE FARM 0112 NORTH GROUND 0144 UPPATON FARM (!(! (! 4301 LAND AT COFTON CROSS (! 0036 DUCKALLER FARM(!(!(! (! 0227 FARM LAND DAWLISH OS 0274/1372 0109 NEW GULLIFORD FARM 0073 HURLDITCH FARM (! 0151 HIGHER WILMINSTONE FARM (! 0099 MANOR FARM 0141 THREE OAKS(! FARMS (! (! 0057 HIGHER ARTISCOMBE FARM
0014 BUCKRIDGE FARM (! 0045 FAIRFIELD FARM 0026 COPPA DOLLA FARM (! (! 0015 BULLEIGH ELMS CROSS FARM 0121 LOMANS FARM(! (!
0054 GLEBE(! FARM(! 0018 COBBERTON 0093 LOWER KERSWELL FARM(! 0075 KERSWELL FARM
0017 CHURCHLANDS FARM (! (! 0048 FROGWELL FARM
(! 0069 HIGHLANDS FARM
This map is reproduced from the Ordnance Survey material with the permission of Ordnance Survey on behalf of the Controller of Her Majesty's Stationery Office. 0065 HIGHER LEIGH FARM © Crown copyright. Unauthorised reproduction infringes Crown copyright and may lead to Civil Proceedings. Devon County Council. 100019783 2007 (! Title: Scale: 1:397,297 Date: Feb 2010 Contact: N/A Devon County Farms Locations File/ Deed: OS Sheet: Telephone: Venture House Unit 5, Oak Court Civic Centre N/A N/A N/A 01392 35 Capital Court Pennant Way North Walk Prep: CPlant Checked: Office: Exeter Bittern Road Lee Mill Ind. Est. Barnstaple Project: Sowton Ind Est Ivybridge EX31 1ED BIS No: Project No: Drwg No: Rev: Exeter PL21 9GP Farms N/A 10004 County Farms EX2 7FW Appendix IV
The Devon County Council Farms Estate Strategic Review March 2010
Appendix (v)
The Proposed Revised Farm Tenancy Letting Policy
1.0 General Policy
1.1 It shall be a general aim of the Estate that the majority of tenants should have up to a maximum 25 years term on t he Estate to start farming on their own account, expand and grow their businesses with a view to progressing within and beyond the Estate as quickly as practically possible.
1.2 The E state S ervice i s not bei ng op erated t o pr ovide l ifetime or working l ife farming opportunities. It is intended to provide an affordable means of entry to farming for as many new entrants as possible that would otherwise not exist. New entrants of any age will apply in open competition. They will continue to be assessed and selected by application, short-listing and i nterview and will have t he a ppropriate qualifications and r elevant ex perience o f at l east five years and w ill hav e sufficient ca pital ( and/or asse ts) w ith r espect t o t he particular farm.
1.3 Applicants for progression tenancies will have to demonstrate their suitability, in particular in terms of farming expertise, competent business management and sufficient capital. Applicants will be r equired to submit a formal tenancy application, cash flows and budgets and to be interviewed. It will be st ressed to progression t enants that t hey sh ould t ake ev ery oppor tunity t o se ek progression beyond the Estate.
1.4 The exact length of term a t enant may stay on a ny particular holding will be more flexible. A n i nitial t erm o f y ears will be pr escribed but t his may be extended at any time at the discretion of the Committee if a need arises and a sound business case can be established for doing so.
1.5 Should a t enant se ek an extension t o term t hey m ust pr esent a w ritten business case and be interviewed by a panel.
1.6 Where, as a consequence of restructuring, land is added to an existing starter farm creating a progression farm; the occupying tenant will not be offered a progression tenancy as of right. At the end of the current tenancy term, the farm will be advertised to let to all existing starter farm tenants giving them an equal opportunity to that of the ‘sitting tenant’ to progress to a bigger farm.
2.0 Starter Farms
2.1 Starter farms will be let on an initial term of seven years to new entrants from the open market. This length of term may be extended at any time during the continuation of the tenancy provided a sound business case for an extension can be made. Tenants may stay on a st arter farm for a maximum term of 14 years.
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The Devon County Council Farms Estate Strategic Review March 2010
3.0 Progression Farms
3.1 Progression farms will be let on an initial term of 15 years or for a shorter term to t otal 25 y ears on t he E state i f a t enant has had 1 0 y ears or m ore on a starter u nit. P rogression farms will be adv ertised t o l et i nternally t o ex isting tenants in open competition in the first instance. If the farm is not let internally, it will be adv ertised t o l et on t he op en m arket t o new ent rants. The i nitial length o f t erm may b e ex tended at any t ime during t he co ntinuation of the tenancy provided a so und business case for an ex tension can be made and provided the tenant’s total length of term on the Estate would not exceed 25 years.
3.2 Any tenant moving to a progression farm within the first seven year term on a starter holding can be offered a term of years to a minimum total 20 years on the E state. F or ex ample, a t enant m oving to a pr ogression farm af ter onl y three years on a starter farm can be offered a 17 year progression tenancy. Well eq uipped pr ogression farms will co ntinue t o b e o ffered i n t he first instance t o existing t enants the C ounty C ouncil m ay w ish t o r elocate t o achieve the objectives of the Estate restructuring.
3.3 Progression farms will be let on full commercial terms to include open market rents.
4.0 Existing Tenants
4.1 As a result of this policy review, all existing Farm Business Tenancy tenants will hav e t he o pportunity t o ap ply f or an extension t o t heir cu rrent F BTs to ensure equality, but with each request being considered on a business case basis. There w ill be no a utomatic right t o an extended t erm of y ears for existing tenants.
5.0 New Entrants Policy
5.1 Most new entrants will be expected to take every opportunity to progress to a larger farm, either within the Estate or within the private sector, as a tenant, joint venture par tner or ow ner occu pier. O ften, however, t he hi ghly competitive pr ogression op portunities will not ar ise. I n t hose ci rcumstances, and provided the tenant has otherwise proved his/her suitability for eventual progression, then they will be offered a further fixed term seven year tenancy of their present farm.
5.2 During t hat se cond t erm t enancy i t w ill be st ressed up on the tenant t he importance of progressing to another holding since it will not be t he general policy of the Authority to willingly grant a further, third, tenancy on t he same farm, although specific individual circumstances may justify such a policy.
5.3 For some specialist and highly-intensive rural businesses however, it may be possible t o de monstrate s ufficient g rowth and ex pansion p otential on t he
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same holding for a period of years beyond the initial tenancy term offered. In some instances, therefore, it may not be necessary to move holdings in order to ‘progress’ within the Estate and it may be possible after perhaps a modest extension of time on a starter farm to progress directly into the private sector.
6.0 Starter farm break clauses
6.1 There w ill be no sp ecific landlord br eak clauses contained w ithin a st arter farm tenancy.
6.2 Tenants will be allowed to surrender a starter farm tenancy at any time during the term provided reasonable notice is given.
7.0 Progression farm break clauses
7.1 There will be open landlord break clauses contained within a progression farm tenancy t o b e t riggered o n t he fifth an d t enth an niversary f or any r eason whatsoever provided at least 12 months prior written notice is given.
7.2 Tenants will be al lowed to surrender a pr ogression farm tenancy at any time during the term provided reasonable notice is given.
8.0 Tenants monitoring
8.1 It will continue to be a condition of starter farm tenancies that new entrants will participate in on-going assessment and monitoring. This will involve periodic visits from the Committee Chairman and Senior Land Agent and will provide the b asis for a Test of C ompetence w ith r espect to o ffering the tenant a further tenancy. There will be no au tomatic right of renewal at the end of any tenancy term.
8.2 The process of monitoring tenants during their initial seven year tenancy will be as follows:
(i) After 18 months, the Committee Chairman and Senior Land Agent to make a formal v isit t o t he t enant, and t o i nspect t he farm and, i f considered appropriate, ex amine t he tenant’s farm r ecords and accounts, and t hen t o make a written confidential report to the Farms Committee
(ii) After the f ifth anni versary but be fore t he si xth, as for ( i) abov e ex cept t he Committee r eport t o i nclude a r ecommendation t hat t he t enant sh ould, or should n ot, be o ffered a se cond se ven y ear t enancy o f t he sa me st arter holding.
9.0 The level of expected tenant’s competencies
9.1 The following criteria will be used as indicators of a tenant’s ability to manage his/her farm an d busi ness affairs, an d t hus to be co nsidered for ei ther a
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second se ven y ear t enancy o f t he sa me st arter h olding, or a t enancy o f a progression holding
(i) Rent paid in full and up to date (ii) No other debts to the landlord are outstanding ie ingoing valuation costs (iii) Production figures and financial t rends not i n decl ine ( disregarding externalities and market forces beyond the control of a prudent tenant) (iv) An appropriate level of working capital (subject to (iii) above) (v) The farm i s managed a nd maintained ac cording t o the r ules o f g ood husbandry and the terms of the tenancy agreement (vi) The t enant ca n de monstrate a g ood k nowledge an d u nderstanding of the issues affecting f arming, par ticularly t hose which m ay i mpact up on hi s/her business (vii) Evidence of ongoing relevant training and development (viii) Details of links or pursuits that the tenant has established within the industry eg membership of organisations, discussion and/or buying groups (ix) A propensity to succeed (x) Evidence o f i nvestment i n t he hol ding t o expand an d dev elop t he farm business and viability of the unit (xi) Evidence o f g enuine i ntention a nd abi lity t o pr ogress and t hat al l r ealistic opportunities to do so have been pursued (xii) Demonstration o f b usiness acumen, i nnovation and a mbition, possi bly through: (a) Pursuance of agri-environment schemes and implementation of whole farm plans (b) Diversification by non-agricultural use of part of farm (c) Added value products and/or services (d) Collaboration or co-operative ventures with other producers (e) Educational access and use of the farm (f) Permissive public access and demonstration of rural issues
9.2 It should be noted that it is the overall assessment of the above which will be taken i nto acco unt an d not ne cessarily t he need t o fulfil each o f the ab ove matters in its entirety.
10.0 Examples of circumstances likely to be considered favourably by the Authority when requests for extensions to progression tenancy terms are made
1. Significant evidence of tenant’s endeavours to progress beyond the Estate. (i) Tenants must have been at least interviewed for a farm tenancy/joint venture opportunity in the private sector (ii) The more interviews secured will indicate a greater chance of success ultimately and t herefore the reward in terms of extra years is likely to be greater
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2. Significant capital growth and asp iration to buy own farm in near future. If a tenant can: (i) demonstrate significant year-on-year capital growth and (ii) secure lending provision (iii) Accrue realistically sufficient capital/borrowing in reasonable period of time 3. Tenant has own land and is in the process of securing planning consent for agricultural dwelling and/or building own dwelling 4. Tenant has or is prepared to make significant capital investment in landlords holding and needs extra term to (i) justify investment and obtain return on capital (ii) secure lending 5. Significant family turmoil such as death of partner or divorce 6. Significant impact on business beyond the control of the tenant (i) extensive periods of Bovine TB restrictions (ii) significant loss of livestock numbers/value due to disease control cull
10.1 It should be noted that this list is indicative only. It is not exhaustive and is not weighted in any way whatsoever.
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Appendix (vi)
Statement relating to landlord’s consent for tenant’s improvements
1.0 It is understood that banks and other lending institutions may be more inclined to lend tenants money for capital investment needs if a robust and transparent landlord’s consent letter is provided which clearly states the basis on w hich compensation will be pai d and the likely level of compensation to be paid on the termination of tenancy.
2.0 For the purpose of this exercise, it is assumed the scenario is most likely to relate t o t enants occupying f arms on F arm B usiness Tenancies under t he Agricultural T enancies A ct 1 995 ( The A ct). It is therefore t his legislative framework that i s considered w hen pr oposing t his strategy. T here w ill be some differences that will need to be considered for tenants occupying farms under the Agricultural Holdings Act 1986.
3.0 If l andlord’s consent i s to b e g ranted, the l andlord w ill need, i n advance, a copy of:
1. Planning consent (if necessary) 2. Detailed drawings, specification etc 3. Copies of at least three competitive quotes for works estimated to cost over £10,000
In addition, and on completion of the works, the landlord will require copies of:
4. Any warranties or guarantees from the supplier/manufacturer/contractor 5. Receipted invoices for works carried out 6. Evidence of any grant funding support that may have been obtained 7. Evidence o f any t ax a llowance t hat may ha ve been s et ag ainst t he co st o f providing the improvement 8. Copies of any other requisite statutory documentation i.e. WQE3 forms from the Environment Agency
4.0 Compensation provision:
4.1 S.16 o f The A ct pr ovides the r ight for t enants to cl aim co mpensation for tenant’s improvements.
s.20 (1) of The Act sets the measure of compensation payable as ‘the amount of compensation payable to the tenant under s.16 of this Act in respect of any tenant’s improvement shall be an amount equal to the increase attributable to the improvement in the value of the holding at the termination of the tenancy as land comprised in the tenancy’.
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5.0 The Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006
5.1 The ab ove O rder adopted i n O ctober 200 6, w hich f ollowed t he recommendations of the Tenancy Reform Industry Group (TRIG), resulted in a modification of S.20 of The Act enabling landlord and tenant to agree a cap on compensation which will be the lesser of:
- That calculated on the statutory basis of s.20(1) and - The ‘compensation limit’
5.2 The parties are free to agree the amount of the ‘compensation limit’. There is no bar on this being only a nominal figure although case law would suggest it should not be nil. If the parties cannot agree the amount, the limit is to be the amount equal to the cost to the tenant of making the improvement. Ordinarily the basis of compensation to be applied will be i n accordance with S.20 (1) of The Act. However, for any tenant’s improvements:
(a) With a n ant icipated co mpensatory l iability at end of t enancy g reater t han £10,000, (b) Consisting of a bespoke, business specific nature not likely to be required by the average hypothetical incoming tenant (c) Consisting of dairy or milk production plant and equipment, cubicle divisions etc proposed on a farm let under a mixed user clause although in the majority of ca ses there w ill be a g eneral pr esumption ag ainst g ranting l andlord’s consent for such proposals
5.3 The managing agents to seek the prior written approval of the Farms Estate Committee before granting landlord’s consent and, if consent is to be granted, the Committee is to set the compensation limit in accordance with S.20 (4B) of The Act.
5.4 Subject t o t he a bove cr iteria, l andlord’s consent w ill not be unreasonably withheld.
5.5 Please note, this policy relates exclusively to physical improvements. It does not relate to routine improvements or intangible advantages such as planning consents under The Act.
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Appendix (vii)
Landlord’s Capital Investment Prioritisation Matrix
1.0 Corporate policy has, for many years now, required officers to seek the prior written approval of the C ounty F arms E state C ommittee before carrying out any capital investment greater than £5,000 in value from either the Useable Capital Receipts Reserve or the Revenue Funded Restructuring Budget. However, t he r eview g roup co nsidered i t essential to provide an adv isory document t o h elp the Committee determine a pr ioritisation c ase w hen considering r equests by t enants and/or pr oposals from o fficers f or ca pital investments on farms on a competitive basis and within a diminishing financial resource.
2.0 The following criteria should therefore be considered by the committee before sanctioning any capital investment proposals.
1. Is the capital investment required as a result of statutory legislation? 2. Is the capital investment required as a result of a contractual obligation? 3. Has the tenant or agent of a t enant on a n 86 Act agreement served a v alid and undisputed s.11 notice? 4. Is the farm scheduled for retention or disposal? 5. Is the proposed capital investment in keeping with the long term use of the holding? 6. Does the farm warrant improved infrastructure in terms of size, productive and related earning capacity, condition and quality of existing infrastructure etc? 7. Is the infrastructure required because the tenant is farming other land? 8. Is there a realistic opportunity to increase the rent for the holding? 9. Is there a realistic opportunity to change the basis of occupation i.e surrender and re-grant of 86 Act agreement to 95 Act FBT? 10. Is there a possi bility of negotiating a ch ange of use to obviate the need for investment? 11. Will the investment enhance the capital asset value of the Estate? 12. Will the in vestment enable the delivery of Estate and/or corporate aims and objectives? 13. Is there a deal to be struck - incentivising the tenant to make the investment instead of the landlord?
3.0 This is simply a di scussion paper at t his stage. I f t he co ncept is adopted, consideration to be g iven as to whether or not a sch ematic flow chart and/or scoring mechanism can be developed for use.
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Appendix (viii)
Acknowledgements Devon C ounty C ouncil and t he F arm R eview G roup w ish t o t hank the following consultees w ithout their help t he r eview would not have be en possible.
Table 16 – Schedule of acknowledgements
Name Organisation Date John Hart Leader of the Council 29th Oct John Clatworthy Deputy Leader of the Council 29th Oct Graham Bell Devon County Council (Director of 29th Oct Planning Infrastructure & Economy) Alex Meletiou Somerset County Council Farms Estate 5th Nov Land Agent Ben Lancaster Dorset County Council Farms Estate 5th Nov Land Agent James Benham Gloucestershire County Council Farms 5th Nov Estate Land Agent Steven Morgan Wiltshire County Council Farms Estate 5th Nov Land Agent Johnny Alford Cornwall County Council Farms Estate 5th Nov Land Agent Colin Latham Devon County Council Farms Estate 11th Nov Committee (Tenants Representative) Will Jones Devon County Council Farms Estate 11th Nov Tenants Association (Chairman) George Dunn Tenant Farmers Association (TFA) (Chief 11th Nov Executive) Mark Saunders Representative of the Tenancy Reform 11th Nov Industry Group (TRIG) Paul Glanville/ Matt Devon Federation of Young Farmers 11th Nov Heal /David Camp Clubs (and a supporting written submission from the National Federation of Young Farmers Clubs) Emma Woodhouse/ National Farmers Union (NFU) 23rd Nov David Horton/ Robert Sheasby Paul Penrose Regional Manager (HSBC) 23rd Nov David Fowler Regional Manager (Lloyds TSB & AMC) 23rd Nov Barry White Devon County Council (Investments 23rd Nov Manager) Clare James Assistant Land Agent (Clinton Devon 2nd Dec Estate) Tom Stratton Deputy Land Steward (Duchy Estate) 2nd Dec Simon Darby Crown Estate Manager 2nd Dec Richard Soffe Head of Rural Business School, Duchy 2nd Dec College and Head of Regional Farm
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Business Survey David Henley Principal (Bicton College) 7th Dec
Caroline Chugg Councillor Farms Estate Committee 7th Dec th Peter Bowden Councillor Farms Estate Committee 7 Dec Peter Dawson Dairy UK 7th Dec John Mortimer Country Land & Business Association 7th Dec th Mary Davis Devon County Council (Director of 7 Dec Finance) th Alex Reader Regional Rural Surveyor (National Trust) 7 Dec Chris Dyer Devon County Council (Head of Strategic 9th Dec Planning – CYPS) th Brenda Taylor Councillor Farms Estate Committee 9 Dec th Dr Phil Norrey Devon County Council (Chief Executive) 9 Dec Michael Lee Councillor Farms Estate Committee 9th Dec
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Appendix (ix)
Terms of Reference for a full review of the Devon County Council Farm Management Strategy
Deadline for final report to be provided to the Farms Estate Committee for approval –
12th March 2010 (preferably sooner if achievable)
Author of Terms of Reference –
Jon Williams (Performance Manager in Business Transformation Unit)
Terms of Reference Authorised by –
Chairman of the Farms Estate Committee (Jerry Brook) & Farms Estate Committee – July 2009 County Solicitor (Roger Gash) Head of Business Transformation (Richard Buzzacott)
Review work to be undertaken by the following –
Information Provision & Organisation/Attendance of Consultation Meetings:
Dan Meek Claire Sampson
Review Group will examine data produced and scrutinise this data, with the objective of interpreting the data and agreeing narrative commentary in consultation with DM & CS. A t l east t wo m embers of this group are t o be i nvolved w ith al l c onsultative meetings with internal & external consultees:
Cllr Jerry Brook (Farms Estate Committee Chairman) Cllr Jeremy Yabsley (Member of Farms Estate Committee) Jon Williams (Performance & Contracts Manager - Business Transformation Unit) Gill Loman (Senior Accountant - Devon Finance Services) John Lee (Independent Member of Review Group)
Legal Input:
Roger Gash
Review to be critiqued by
Richard Buzzacott (Head of Business Transformation Unit)
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Key persons to be consulted within the review process
Internal County Council consultees:
Members of the Farms Estate Committee Leader of the Council Lead Member for Property & Finance Chief Executive Directors or nominees Head of Finance Representative from Children & Young Person Directorate responsible for property strategy Representative from Environment Economy & Culture Directorate from Countryside Service Investment Team
External consultees:
Tenants Representative (Elected) Tenants Association National Farmers Union Country Landowner Association Tenant Farmer Association Tenancy Reform Industry Group Young Farmers Club Regional Farm Management Survey Unit hosted by Duchy College Land agents for farms estates in Cornwall, Somerset, Dorset, Gloucester, Wiltshire Land agents having responsibility for commercial estates within Devon (e.g. National Trust, Clinton Devon Estates, The Duchy Estate, Crown Estate) Agricultural bankers (e.g. HSBC & AMC) Dairy UK Bicton College Duchy College
Content of Review
1.0 Executive S ummary - Provide an E xecutive S ummary t hat se ts out t he main points identified as a result of the review, together with the key metrics (as set out below) asso ciated w ith t he est ates in 20 09 ( and co mparison t o 2002 w here practical to do so). Accompanied by commentary of key points.
Total extent of holdings and size of holdings Number of tenants Current estimated total value of estate Net income (rental incomes less operational expenses) Net capital receipts in last five years Current backlog maintenance provision Anticipated capital investment in next five years Gross revenue rates of return
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Net revenue rates of return
Target Page Guide – 2 Source of Data – Overall Review Data Provision – Review Itself Data Evaluation – All - Establishment of point to include in report Author(s) of Section – Data Information DM, Joint commentary to be drafted by person to be agreed
2.0 Recommendations – Provide a co ncise se t o f r ecommendations t hat se t ou t revisions to pol icy or management a pproaches which ar e adv ised/required f or future management of the Estate. These recommendations must clearly set out targets in relation to the following:
Size of the estate to be retained Numbers of units required of different sizes Numbers of tenants to be provided with new tenancies Lengths of tenancies permitted Farming act ivity which t he C ounty C ouncil wishes to se e ca rried out w ithin i ts Farms Estate Non-farming activities which the County Council wishes to see carried out within its Farm Estate (e.g. education, training, wind farms, environmental areas, energy crops)
Target Page Guide – 2 Source of Data – Overall Review Data Provision – Review Itself Data Evaluation - All Author(s) of Section – Joint recommendations (SMART) to be drafted by person to be agreed
3.0 Provide a nar rative su mmary on t he at tainment of the objectives/recommendations of the Best Value Review of 2001 a nd the Farms Estate Management Strategy introduced in 2002 including any factors that have adversely affected the roll out of the strategy/recommendations.
Target Page Guide – 4 Source of Data – BVR 2001 & FS2002 and Current Estate Data Data Provision – DM Data Evaluation – All Author(s) of Section – Joint commentary to be drafted by person to be agreed
4.0 Provide an objective view on any statutory obligations the County Council may be required to observe in relation to the Agriculture Act 1970 or any subsequent legislation or legal precedents.
Target Page Guide – 1 Source of Data – BVR 2001 & Subsequent Legal Legislation & Precedents Data Provision – RG Data Evaluation – Not Required
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Author(s) of Section - RG
5.0 Clearly define each of the following and confirm how these align with the Devon Strategic Plan):
Farm Estate objectives (current) Estate outputs (current) Key deliverables (current)
Target Page Guide – 1 Source of Data – FS 2002 & Current Estate Data Data Provision – DM Data Evaluation - All Author(s) of Section – First Draft DM, All to review
6.0 Set out the areas in hectares of the Estate that needs to be retained to secure non-farming objectives in the future, taking account of the following:
Land t hat has potential t o be dev eloped for re sidential pur poses within t hree bands (ideally) of less than 10 years, 10 to 20 years and over 20 years; Land t hat h as potential t o be dev eloped f or i ndustrial/commercial/mineral extraction purposes within the same 3 bands Land t hat may be r equired for t he s iting o f County C ouncil buildings and specifically what types of buildings (e.g. schools, offices, recycling centres etc) Land that may be required for road development schemes Land t hat maybe r equired f or env ironmental sch emes (e.g. a reas for t ree planting and w ildlife schemes to compensate, for example, for development of sites) Land which may be required for allotments Land that may be required for wind farms or other power generation schemes Other purposes that may require a land bank Total area of land bank required
Target Page Guide – 1 page summary in main body of report plus 6 maps as appendices Source of Data – Questionnaires to County Council Internal Stakeholders and knowledge from DM Data Provision – Summary of Questionnaires Data Evaluation – All to scrutinise summary of data Author(s) of Section – Joint commentary to be drafted by person to be agreed
7.0 Key f actors within t he agricultural i ndustry t hat h ave i nfluenced t he v iability o f agricultural busi nesses, i ncluding a n asse ssment o f t he m inimum size of different t ypes of uni ts that are l ikely t o b e v iable ov er a 5/ 10 y ear per iod. Provide a su mmary o f cu rrent t ypes of farm act ivity and i f these pr ovide a reasonable fit with the resources available on existing units.
Target Page Guide – 4 Source of Data – Exeter Farm Business Survey – Regional Farm Business Survey
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Data Provision – Exeter University Farm Survey Department Data Evaluation – DM & JW Author(s) of Section – JW/DM for Initial Text to be reviewed by all
8.0 Compare t his rental i ncome w ith r ates that ar e se cured by ot her C ounty Councils, in t he private se ctor, i nvestment i n G overnment se curities and savings on prudential borrowing. Provide a co mmentary identifying limitations within the asset holding that limit the rates of return achievable.
Target Page Guide – 2 Source of Data – Estate Records, other CC Farm Departments, other estates, DCC Investments Team Data Provision – DM & DCC Investment Team Data Evaluation - All Author(s) of Section – DM for Data, Joint commentary to be drafted by person to be agreed
9.0 Tenant Profile – provide a table of the numbers of tenants within different types of t enancies and a co mmentary on how t his affects opportunities f or t enants positively and neg atively. A lso pr ovide a n age pr ofile o f t enants w ithin t he tenancy and type of farm groups.
Target Page Guide – 1 Source of Data – Existing estate Records Data Provision – DM Data Evaluation - All Author(s) of Section – DM, All to review
10.0 Produce information on the number of tenants entering and leaving the estate over the last 10 y ears and the number of tenants who have secured ongoing farming busi nesses on l eaving t he est ate o r busi ness opportunities linked t o agriculture. In relation to those leaving the estate set out the proportion that has secured o pportunities w ithin D evon. P rovide a co mmentary on t he t ension between t he cr eation of n ew oppor tunities, pr ogression opp ortunities and providing increased security of tenure.
Target Page Guide – 2 Source of Data – Estates Records Data Provision – DM Data Evaluation - All Author(s) of Section – DM for data, Joint commentary to be drafted by person to be agreed
11.0 Produce a questionnaire to be sent to all Devon County Council farm tenants to ascertain why an extended term is needed to enable progression off the estate.
Target Page Guide – 2 Source of Data – Questionnaires to Tenants Data Provision – Summary of Questionnaire Results Data Evaluation - All
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Author(s) of Section – Joint commentary to be drafted by person to be agreed
12.0 Provide a summary of areas where the estate has created opportunities for the tenants to di versify and cr eate businesses that hav e/could b e su stained following departure from the Estate.
Target Page Guide – 2 Source of Data – Estates Records Data Provision – DM Data Evaluation - DM Author(s) of Section – DM to draft for all to review
13.0 Identify ex amples of e ducational or e nvironmental i nitiatives the Estate h as facilitated.
Target Page Guide – 2 Source of Data – Estates Records Data Provision – DM Data Evaluation - DM Author(s) of Section – DM to draft for all to review
14.0 From c onsultation w ith ot her c ommercial l andlords within D evon, identify t he likely levels of opportunities that may be created within Devon over a five year period. Consider if a forum should be set up to facilitate the exchange of tenant CVs and potential/real t enancy oppor tunities and h ow wide t he r emit o f t his group should be.
Target Page Guide – 2 Source of Data – Interviews with other land agents in Devon Data Provision – Interviews Data Evaluation - All Author(s) of Section – JW to draft to be reviewed by all
15.0 Set out a summary of the anticipated headline position for the next five years in relation to the following:
Total extent of land holding Number of tenants Current estimated total value of the Estate Net income (rental incomes less operational expenses) Net capital receipts in last five years Current backlog maintenance provision Anticipated capital investment in next five years Gross revenue rates of return Net revenue rates of return
Target Page Guide – 2 Source of Data – Estate Planning Data & Review Data Data Provision – DM/AH Data Evaluation – High Level data by all
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Author(s) of Section – First Draft by DM/AH, Review by All
16.0 Provide a SWOT analysis in relation to the following potential scenarios for the Estate:
Expansion of the Farms Estate Maintain the Estate at its current size Make modest strategic reductions to the Estate to improve performance Scale down the Estate to a si ze required to meet the needs of only having a strategic land bank Sell the Estate in its entirety
Target Page Guide – 2 Source of Data – Overall Review & Working Knowledge & Brainstorm and review may focus on non land holding resources Data Provision – All Data Evaluation - All Author(s) of Section – Joint commentary to be drafted by person to be agreed
17.0 Provide a r eport co nclusion t hat cl early se ts out ar eas where t he farm management st rategy needs to be modified given t he per tinent findings of t he review. This section must clearly predicate the need for the future strategy that is recommended.
Target Page Guide – 2 Source of Data – Overall Review Data Provision – Review Itself Data Evaluation – All Author(s) of Section – Joint commentary to be drafted by person to be agreed
Appendices A spreadsheet o f ke y f acts in r elation to each h olding w ithin t he est ate (sample layout provided) Maps of the location of holdings within the farm estate A portfolio of case study evidence of the notable successes of farms estate to provide amplification of summary in 3 above An appendix of forward-looking budgetary information for the estate.
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Appendix (x)
Table 17 - Schedule of Progression opportunities in Private Sector brought to the attention of tenants between 2002 and 2009
TYPE OF DATE FARM OPPORTUNITY 1 02/05/2002 Littlewood, Dorchester Farm to let Underhill, Staple Fitzpaine, 2 30/06/2003 Taunton Farm to let Trevorder, St Breock, 3 21/07/2003 Wadebridge Farm to let 4 07/06/2004 Carvinack, Cornwall Farm to let Cutcrew & Molenick, 5 08/02/2005 Saltash Farm to let 6 18/02/2005 Greenlane, Dunsford Farm to let 7 08/07/2005 Pulsards, Tiverton Farm to let 8 24/08/2005 Penbugle, Duloe Farm to let 9 April 2006 Gullicott, Clawton Farm to let 10 06/06/2006 Martinsfield, Broadclyst Farm to let 11 06/06/2006 Burrow, Broadclyst Farm to let Knaveswell, Wareham, 12 02/10/2006 Dorset Farm to let Riddlecombe Manor, 13 23/10/2006 Ashreigney Farm to let 14 30/01/2007 Brockhills, Harbertonford Farm to let Holloway, Shillingstone, 15 21/02/2007 Dorset Farm to let South Stoke, Kings Worthy, 16 14/03/2007 Hants Farm to let Little Church, Mattingley, 17 14/03/2007 Hants Farm to let 18 13/04/2007 Haye, Saltash Farm to let 19 13/04/2007 Tremoan, St Mellion Farm to let Herd Manager/Share 20 15/05/2007 Mid Devon Farm Sissinghurst Castle, 21 05/11/2007 Cranbrook, Kent Farm to let 22 03/03/2008 Fernham, Brayford Farm to let 23 18/06/2008 Home Farm Filleigh Farm to let 24 20/11/2008 Hayne, Honiton Farm to let 25 03/04/2009 West Dorset Farm to let South Battisborough, 26 29/04/2009 Holbeton Farm to let Lyde Green, Rotherwick, 27 18/06/2009 Hants Farm to let 28 03/07/2009 Dorset Farm to let
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29 03/07/2009 Dorset Contract Farming Garlenick, Grampound, 30 03/08/2009 Cornwall Farm to let 31 19/08/2009 Somerset Share farming 32 01/09/2009 Lower West Barn, Frome Farm to let 33 18/01/2010 Penrose Estate, Helston Farm to let Hazel Lane Dairy Farm, 34 25/02/2010 Dorset Farm to let
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DEVON COUNTY FARMS ESTATE SERVICE PROVISION QUESTIONNAIRE FOR EXISTING TENANTS Appendix (xii) Following the County Farms Committee meeting of 30 April '09 & a subsequent meeting of representatives of the County Farms Estate Committee & the Tenants, it was agreed to consider the length of tenancy offered on the Estate. As part of that process, a questionnaire has been compiled to ask all existing tenants for their views & opinions on the policy.
! If you need more space please use a separate sheet marking clearly with Question Number ! The Estate aims to provide first opportunities for persons to be farmers on their own account with a view to them securing an independent livelihood from agriculture away from the Estate within a reasonable time scale. 1. Which of the following tenancy arrangements do you consider DCC should make available to a tenant henceforth? Please rank the below options between 1 and 4 (1= Highest Preference and 4 = Lowest Preference) > An arrangement to allow a tenant to remain farming on the DCC farm estate for a reasonable fixed number of years before progressing beyond the Estate - Your Ranking Position - 1 / 2 /3 / 4. > An arrangement to allow a tenant to remain farming on the DCC farm estate until 60 years of age - Your Ranking Position - 1 / 2 /3 / 4. > An arrangement to allow a tenant to remain farming on the DCC farm estate until 65 years of age - Your Ranking Position - 1 / 2 /3 / 4. > An arrangement to allow a tenant to remain farming on the DCC farm estate until they choose to retire - Your Ranking Position - 1 / 2 /3 / 4. 2. Which of the following farm tenancy arrangements ('steps on the ladder') do you consider should be in place within the DCC Farms Estate? Please rank the below options between 1 and 3 (1= Highest Preference and 3 = Lowest Preference) > A three step system comprising of - Nursery Farm (say 50 acres) to Starter Farm (say 100 acres) to Progression Farm (say 200 acres) - Your Ranking Position - 1 / 2 /3. > A two step system comprising of - Starter Farm (say 100 acres) to Progression Farm (200 acres) - Your Ranking Position - 1 / 2 /3 . > A single step system of farms of various sizes - Your Ranking Position - 1 / 2 /3 . 3i. How many initial years in total should a new entrant be given on a Starter Farm in order to prove themselves and to establish their business: (a) 5 years? (b) 7 years? (c) 10 years? (d) Other? 3ii. If a tenant satisfies the Tenant's Competencies, but are yet to progress to a Progression Farm, should they be given extra years? Yes or No. 3iii. How many years should a tenant have as an absolute maximum on a Starter Farm? 4i. How many initial years should an existing tenant be given on a Progression Farm in order to expand their business, build capital and be able to progress off the Estate: (a) 10 years? (b) 15 years? (c) 20 years? Other? 4ii. If a tenant satisfies the Tenant's Competencies on their Progression Farm, but is yet to progress off the Estate, should they be given extra years? Yes or No. 4iii. How many years should a tenant have as an absolute maximum on a Progression Farm? 5. Currently, new entrants are offered an initial 5 years on a Starter Farm, with a maximum 2 terms of 5 years extension potentially available. Tenants on a Progression Farm are offered 10 years with a maximum 5 years extension potentially available.
Would longer tenancies increase tenants' ability to progress beyond the Estate - Yes or No?
If 'YES', please explain why the current length of tenancy is, in your opinion, too short.
6. Currently there exists an exceptional circumstances policy which enables tenants to seek an extended term of years on the same holdings. Tenants must apply no more than three years prior to the end of their current tenancy with a business case for an extension. It is proposed that a scoring evaluation system is added to this policy so that applicants for an extension are considered using a consistent approach. If tenants are given an extension to their Progression tenancy: (a) What factors do you consider would be appropriate to take into account?
(b) How long should the maximum extension be?
7. If existing tenants stay longer on the Estate, how would you address the consequential reduction in opportunity for new entrants?
8. At what age range do you think tenants are most likely to be attractive to the private sector landlords?
(a) 21-30 years? (b) 31-40 years? (c) 41-50 years? (d) 51-60 years? (e) 61 and above? 9. What means of progression onto the private sector do you think tenants should consider?
(a) Tenancy? (Yes/No) (b) Purchase? (Yes/No) (c) Joint Venture? (Yes/No) (d) Other business opportunities (If Other, please detail 'other' below? (Yes/No) 10. If you have applied for tenancies in the private sector and have been unsuccessful, do you have any feedback as to why your application was unsuccessful: (a) Too young? (b) Too old? (c) Lack of capital? (d) Borrowings? (e) Too big a step, size, financial ability, etc? (f) Lack of experience? (g) Other (please explain below)?
11. How many applications have you made to progress off the Estate: No. of Tenancy applications? No. of Joint Venture applications? No. of attempts to purchase a farm?
Thank you for spending time on completing this questionnaire. The Devon County Council Farms Estate Strategic Review March 2010
Appendix (xiii) Glossary of terms
ELS Entry Level Scheme (agri-environment scheme)
HLS Higher Level Scheme (agri-environment scheme)
OELS Organic Entry Level Scheme (agri-environment scheme)
CSS Countryside Stewardship Scheme
ESA Environmentally Sensitive Area
WTO World Trade Organisation
EU European Union
CAP Common Agricultural Policy
AHA 1986 Agricultural Holdings Act 1986
ATA 1995 Agricultural Tenancies Act 1995
FBT Farm Business Tenancy (created by the ATA 1995)
Lifetime tenancy Tenancies under the AHA 1986 created before 12th September 1984
Retirement tenancy Tenancies under the AHA 1986 created after 12th September 1984 and before 1st September 1995
LEAF Linking Environment and Farming
NVZ Nitrate Vulnerable Zone (zones have been enlarged following the Nitrate Pollution Prevention Regulations 2008)
NPS Managing Agents of the Farms Estate
YFC Young Farmers Club (Devon Federation or National Federation)
CLA Country Land and Business Association
NFU National Farmers Union
DEFRA Department for the Environment, Food and Rural Affairs
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The Devon County Council Farms Estate Strategic Review March 2010
FACE Farm and Countryside Education
Think food and farming Legacy from the Year of Food and Farming (2007/08)
WGS Woodland Grant Scheme
HogCO Home Grown Community Owned
AD Anaerobic digestion
CIPFA Chartered Institute of Public Finance and Accountancy
MLC Meat and Livestock Commission
DIY Livery Do-it-yourself livery
SSSI Site of Special Scientific Interest
SAC Special Area of Conservation
LANTRA The Sector Skills Council for the environmental and land based sector
CEVAS Countryside Educational Visits Accreditation Scheme
ROWIP Rights of Way Improvement Plan
FWAG Farm and Wildlife Advisory Group
TRIG Tenancy Reform Industry Group
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