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In admitting that tenant farmers had been ignored, Britain's new minister of agriculture displayed a poor understanding of the real challenges of the industry. (730 words).

Britain's newish minister of agriculture and other things, Margaret Beckett, has been under more than usual scrutiny since taking office last June. Like many of her recent predecessors she had little apparent association with the industry when appointed. Additionally she was given responsibility for the environment and rural affairs. Her formal title is Secretary of State for the Department of the Environment, Food and Rural Affairs.

To give them credit most previous "townies" holding the farming portfolio have made an honest attempt to come to grips with the challenges faced by the industry, donning rubber boots when ever appropriate. Ms Beckett's, or perhaps we should say the industries, challenge, is that she has several corners to her department in which to hide.

And a recent headline "Minister admits ignoring tenant farms," referring to comments she made recently, reveals that after five months in office she still has some way to go to understand the challenges of the industry.

Britain is perhaps the only country in the developed world where a significant portion of farm land is owned by others than active farmers. Government data suggests that as much of a third of all farm land in England and Wales is rented. In Scotland the proportion is probably higher.

The system of land tenure in England has a direct lineage to manorial systems in medieval times. Over the years tenant farmers' rights, however, have been enhanced with typical tenure even being transferable between generations.

In some respects land tenure laws have provide too much security. Freehold, unrented, land values are typically worth twice rented land. As a result of this, farming partnerships, arrangements between owner and operator, have been developed to end run conventional tenancy laws are fast becoming the norm. These commonly provide the operator with five or fewer years of tenure. Beyond this land is often let for a single year to grow a specific crop or even for just a few months as with grazing.

The character of ownership has also changed. The dominance of the landed gentry has declined, long term investors - insurances companies and pensions funds, have at times been significant investors. But more recently wealthy individuals with no particular interest in the countryside other than somewhere to live have emerged as significant buyers. Farm sale prices now typically reflect the quality of the farm house and commuting time from major urban centres rather than the economic productivity of the land.

Further impinging on this change in ownership structure is the imperative to attain economies of size. As a result farmers are increasingly specializing in one or just a few enterprises, operating geographically dispersed businesses and relying on a variety of tenure arrangements.

It is evident that Ms Beckett now understands that not all farmers own the land they farm, which is progress. It seems, however, that she may have some way to go to under the full complexity of land tenure.

What is more critical, however, is her grasp of the challenge of industry debt which cuts across all tenure situations. It seems it is her perception that as tenant farmers do not have the financial resources implicit in land ownership, so they are more at risk to external economic pressures and more deserving of special consideration.

What she appears to have missed is the importance of where farmers are in their business life. Younger farmers are almost always heavily financially levered as they attempt to become established in the business. Farming, because of the value society puts in land ownership, is a very capital intensive economic activity.

Farmers live poor and die rich. A young farmer who has taken on debt to buy land is almost certainly more exposed to adverse economic circumstance than an older tenant farmer who has had time to pay off debt that he took on to enter the industry.

The average of farmers in Britain is 58. And while this figure may be something of a distortion in terms of who is actively engaged in farming, it has to be a concern to all.

Further, while agriculture continues to be neglected and misunderstood by government, young people who are needed to provide vitality to the industry will turn their backs on farming.

November 21, 2001