Farm diversification, tenancy and CAP reform: Results from a survey of tenant farmers in England

Little work has considered explicitly the role of farm tenancy in influencing the uptake (or not) of diversification activities. The need to examine this link has been heightened because of the 2003 CAP reforms and the decision to tie Single Farm Payment (SFP) entitlement to the land rather than what is produced on that land. The main objective of this paper, therefore, is to examine the nature of diversification activities on tenant farms in England, which includes a consideration of how the introduction of the SFP and other CAP reforms may influence such restructuring processes. Results from a national postal survey, supported by tenant farmer/landlord interviews and a workshop, reveal high rates of farm diversification on farms with tenanted land. However, if one takes away contract/hire services the rate of diversification on tenant farms is much less. Tenant farms appear to favour more ‘traditional’ diversification activities and the results also demonstrate an increasing need to move towards more ‘encultured’ definitions of farm diversification. The second key finding to emerge from the research relates to the high levels of uncertainty and negativity surrounding the potential impacts of the CAP reforms, and SFP in particular, on farm business behaviour. Tenant farmers were more concerned about levels of SFP and entitlement than future investment decisions, including diversification.