1 Compensation for Agricultural Improvements

9.01 At common law farm tenants enjoyed no right to compensation for improvements they had carried out or acquired at their own expense. Tenants rights to customary compensation, established by the custom of the country, were ultimately recognised, and local customary rights were often incorporated into tenancy agreements.

9.02 The compensation rights discussed below only apply to tenancies of agricultural holdings. The Agricultural Tenancies Act 1995 includes a separate code of rights for Farm Business Tenancies, which is discussed in Chapter 4 above. The 1995 Act gives the tenant wider rights to compensation, eg for non agricultural improvements. The 1986 Act, while giving tenants considerable statutory rights to compensation, does so by listing those improvements for which compensation is available in some detail in Schs 7 and 8 of the Act. The improvements there listed are almost exclusively agricultural in nature, and the compensation recoverable is the increased rental value of the holding ‘as a holding,’ ie the increased rental value of the holding as an agricultural enterprise. In the modern farming context, with greater emphasis on diversification into non agricultural ancillary business, this approach is outmoded and restrictive. The 1995 Act therefore eschews avoids limiting compensation rights to specific types of improvement, by reference to lists which might become out of date, and grants a broader right to compensation for both agricultural and non agricultural improvements – subject to the requirement of the landlord’s priori consent having been obtained to the provision of the improvement.

9.03 A separate code of tenant’s compensation for milk quotas was set out in the Agriculture Act 1986. Dairy quotas were abolished on 31 March 2015, and this is no longer of any relevance in a modern context.¹