Checklist

You can download a Word copy of the Tenancy and Ownership Considerations as a checklist here, to help with your own project planning.

Alternatively, you can find a simple list of the Considerations below:

Introduction 

The tenancy and ownership structure of land can have significant implications for farmers engaging in nature markets in the UK. The rights of tenants in relation to nature markets is still not entirely clear in the UK and may differ on a case by case basis. Below are some key considerations which can help both tenants and landlords in asking the right questions when considering engaging in nature markets as policy and legal frameworks develop. Further guidance prepared by the Tenant Farmers Association and the Country, Land and Business Association can be found here. 

Control over land use & data 

Do I have the legal ability to make changes to the land? 

Land ownership or tenancy determines the level of control a farmer has over their land and its use. Landowners generally have more autonomy in decision-making regarding land use change and participation in environmental markets. In contrast, tenant farmers may be subject to certain restrictions or requirements imposed by the landowner or lease agreement, which can affect their ability to make changes to the land or engage in environmental markets. Tenant farmers should review their tenancy agreements carefully to determine what activities they are legally able to engage in and what changes they are able to make. Landlords should also be aware of how their tenancy agreements impact their tenants’ ability to engage in nature markets. 

Does this project change the use of the land to something other than agricultural production? 

Most tenancy agreements will restrict the use of the holding to agricultural purposes only and so any environmental project will have to be achieved within the definition of agricultural operations. In terms of carbon sequestration, this can include reducing or eliminating tilling, introducing cover crops and varying crop rotations. This could also mean maintaining a biodiversity-rich habitat through grazing. Long-term land use changes such as planting trees to sequester carbon may not be allowed in the context of a farm tenancy agreement and such a project would require the landowner’s agreement to continue to manage the trees following the end of the tenancy. 

Landowners will have more autonomy over choosing to change their land use, however there may be tax implications resulting from a change from agricultural land management to other uses such as woodland. See Milestone 1 for more information on tax implications. 

If I conduct baselining and measurement on my leased holding, who owns the data once my tenancy ends? 

The data collected on farm will belong to the party which paid for it unless a lease agreement specifically states that baselining data remains with the landowner.   

Entering into agreements 

What is the length of the contract versus the length of my tenancy? 

With tenants typically on annual leases, it may be difficult for them to enter into long-term agreements with a third party. For instance, biodiversity net gain agreements require a 30-year minimum commitment, which would exclude tenants on short contracts from participating. Soil carbon markets, in contrast, vary significantly in the length of their contracts and may offer a better route to market for tenants. Water companies may also pay farmers on an annual basis to improve water quality or be landlords themselves and expect a certain level of environmental stewardship as part of a tenancy agreement. Tenants can also work with their landlords to enter into agreements that are longer term and negotiate on sharing responsibilities and benefits. 

Tenants should look over their tenancy agreement in detail to determine whether their lease allows for them to engage in environmental markets, what sorts of land changes they can make and what they need to get permission from their landlord for. It will be important for tenants to engage with their land owners early on in order to ensure alignment in priorities and gain written consent to both make change to land use or management practices and to engage in environmental markets.  

Long-term planning and investment 

Does my intended project require long-term investment or permanent changes? 

Land ownership typically provides more long-term security and stability for farmers. Landowners can make substantial investments in environmentally-friendly practices or infrastructure, such as agroforestry systems or renewable energy installations, which may require a long-term perspective. Tenant farmers, on the other hand, may be hesitant to invest in such initiatives if they lack security of tenure or if the tenancy agreement does not allow for long-term planning. Additionally, some lease agreements may stipulate that tenants need to restore the land to its original state following the end of their tenancy. This can discourage farmers from making larger-scale changes, such as tree planting and limit their ability to engage in environmental markets which require permanent land use change. The typical contract lengths for different markets are outlined below: 

Working with other tenants 

Are there other tenants on this land who I could work with? 

If your piece of leased land is one of several over a large estate, you may want to consider engaging with tenants on adjacent land holdings to enter into environmental markets together and come together to negotiate terms with your landlord. Just like in other forms of farmer clusters or aggregation models, having multiple farmers working together can improve your access to markets and increase your bargaining power with your landlord, with service providers and with buyers of your ecosystem services.  

Working with your landlord 

What is your landlord’s appetite for engaging in nature markets? 

Tenant farmers will need to engage with their landlords before entering into nature markets but there may be opportunities for landlords and tenants to work together to construct nature market deals. Tenants may wish to discuss nature market opportunities with their landlords to gauge their interest in participating and to identify opportunities for collaboration. Landlords may be willing to share in project costs if they are able to share in profits from the sale of nature credits or if they view the changes as having beneficial impacts across the landholding.  

Is the land already involved in any schemes? 

It is important that tenants and landlords are clear about which party is entering into agreements and what is being paid for to ensure there is no double counting or incompatibility between agreements. Both parties will also need to be aware of any existing schemes the land is involved in such as Countryside Stewardship or if it has a specific designation such as a Site of Special Scientific Interest (SSSI). Existing agreements can limit changes that can be made on the land or already be funding environmental outcomes. 

Who can I go to for advice? 

There are a variety of avenues for tenant farmers to receive advice on engaging in nature markets.  

Other Tenants: Tenant farmers can approach other tenants in their network who have engaged in nature markets to get support and advice on engaging with their landlord and accessing markets.  

Lawyers: Tenants may want to get legal advice through lawyers with agricultural expertise such as Birketts, Michelmores or Lux Nova.  

Land Agents: Land agents can also help tenants and landlords work together to renegotiate tenancy agreements or provide further information on accessing appropriate nature markets.  

Tenant Farmers Association: The Tenant Farmers Association can also be a good resource for tenants and provides guidance and support in all aspects of agricultural tenancy. Guidance prepared by the TFA in collaboration with the CLA can be found here. 

Country, Land and Business Association: The Country, Land and Business Association (CLA), provides advice and support to Landowners and rural businesses in England and Wales. Guidance on nature market participation prepared by the CLA in collaboration with the TFA can be found here.