PROPOSALS to help secure a sustainable and profitable future for tenant farmers have been published by the Tenancy Reform Industry Group (TRIG).

The report's key recommendations include:

Changes to the Agricultural Tenancies Act 1995 to give parties greater flexibility to reach their own agreements in relation to rent reviews and end-of-tenancy compensation.

Changes to the Agricultural Holdings Act 1986 to update the tests for statutory succession to farm tenancies in relation to approved diversification activities.

Establishing a voluntary code of good practice and an ombudsman scheme to encourage greater opportunities for on-farm diversification by tenant farmers.

Drawing up model clauses that can be used to mirror the terms of an Agricultural Holdings Act 1986 tenancy within a tenancy agreement drafted under the Agricultural Tenancies Act 1995.

Changes to Inheritance Tax and Capital Gains Tax to remove barriers to diversification and encourage longer lettings.

Research into problems associated with tenant retirement and support for an advisory service for new entrants.

The report was welcomed by food and farming minister Lord Whitty who said: "A strong tenanted sector is a vital component of the sustainable, profitable and diverse farming industry we all want to see. We must all work together to break down barriers which prevent them fulfilling their business potential.

"The Government will study these proposals carefully and will respond to each of the individual recommendations."

An umbrella group for tenant farmers has endorsed the TRIG report.

National chairman of the Tenant Farmers Association Reg Haydon said "The TFA has campaigned tirelessly over a number of years for many of the changes recommended by this report. Indeed it is only because we lobbied so hard that the Government agreed to facilitate the establishment of TRIG to consider the changes we were proposing in more detail."

He added: "The TFA has been concerned for some time that tenants are at a disadvantage over owner-occupiers when considering enterprises of a non-agricultural nature. A survey carried out by the TFA indicated that more than half of all landlords on traditional tenancies take a negative attitude to their tenants' plans for diversification.

"However, we back the report's recommendation of a code of practice since it includes the need for a ministerial commitment to consider introduction of legislation to improve the tenant's position if the code of practice does not produce an improvement. Landlords will therefore have a chance to respond positively before legislation is considered"

The Country Land & Business Association (CLA) in Yorkshire said it, too, welcomed the proposals.

"Its future of the landlord tenant system depends on owners and tenants maintaining confidence in the system and in each other to build working relationships on a sound legal basis," said Dorothy Fairburn, the CLA's regional director.

The TRIG report is in response to Curry Commission recommendations and an economic evaluation by Plymouth University.

Details of the TRIG report can be found at www.defra.gov.uk/farm/tenancy/index.htm.

Updated: 14:29 Wednesday, June 04, 2003