Are new lease forms the solution?

After the southwest of the Netherlands was already hit twice by abundant rainfall in April, damage was caused to the newly sown and potted crops in the north and southeast. Some potato plots have to be replanted in whole or in part, because the seed potatoes rot in the ground. I've never experienced that before. It just goes to show how risky farming is.

The combination of marginal prices and doing business with nature makes agriculture a form of top sport where nothing can go wrong. With regular leases, the lease prices are still related to the operating income. In that regard, we have it Lease Standards Decree 2018 can look forward to with confidence.

Liberalized lease
At liberalized lease The rent is determined by supply and demand. Since the demand is greater than the supply, when registering for the extra hectares, prices are offered that the entrepreneur thinks he will earn something from (taking cultivation costs into account). In practice, however, this turns out to be disappointing, as the calculations of various accountancy firms show.

With the replacement of liberalized tenancy by flexible tenancy, as the proponents of the Spelderholtproposal, we come from the rain in the drop. Not only because the intention is to break down the protection of the lease price in the case of regular lease in the long term, but also because the lease price for flexible lease can also be freely agreed.

Flexible lease
In the proposal, the lease price of flexible lease can only be corrected against the lease prices in the free market. At the time, the Association of Land Tenants and Own Land Users (BLHB) and the NAJK did not agree with the final proposal of Spelderholt† This is because both had no confidence in the proposed method of corrective rent assessment. You would expect that research would have been done by now.

The website of the Federation of Private Land Owners (FPG) states that the completion of the development of Spelderholt is near: "We are waiting for the calculation of the plans by Wageningen Economic Research (the former Agricultural Economics Institute)." However, Wageningen Economic Research has not conducted any research into the effectiveness of the 'corrective assessment' of the lease price of flexible leases, as desired by LTO Nederland and FPG.

Research
The board of the BLHB regards the lack of such an investigation as an omission in the decision-making process. The BLHB has since asked the Ministry of Agriculture, Nature and Food Quality to have Wageningen Economic Research conduct research into this. This is also to be able to answer the question to what extent flexible lease should be regarded as competitive for the new regular lease.

In other words: can these new leases coexist? And then without there being a predominantly displacement of new regular leases by flexible leases (as the BLHB fears). And without, in practice, no new regular leases being concluded, as a result of which the ambiguity (liberalized lease versus regular lease) of the current system will continue. Another part of the research could also be to provide points for improvement for or instead of corrective testing. It can go wrong.

Peter van der Eijk

Piet van der Eijk was the chairman of the Association of Land Tenants and Own Land Users (BLHB) from 2012 to the beginning of 2019. He also has an arable farm in the Biesbosch polder in the outskirts of the Eiland van Dordrecht.

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