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Publication - Research Publication

Impact of diversity of ownership scale on social, economic and environmental outcomes

Published: 29 Jul 2016
Part of:
Research
ISBN:
9781786520920

Report on the impact of diversity of ownership on the socioeconomic outcomes for rural areas.

119 page PDF

3.7MB

119 page PDF

3.7MB

Contents
Impact of diversity of ownership scale on social, economic and environmental outcomes
Scottish Land Ownership Overview

119 page PDF

3.7MB

Scottish Land Ownership Overview

Land ownership concentration

The ownership and management of land are fundamental to society, and impact on most aspects of rural life, influencing social, economic and environmental development (MacGregor, 1993; Wightman, 1996; Slee et al., 2008). It is widely accepted that Scotland has the most concentrated pattern of private landownership in Europe (Lorimer, 2000; Cahill, 2001; Wightman, 2001) as a result of a number of historic factors (feudalism, succession laws, fiscal policies, agricultural support, etc.). The most comprehensive landownership pattern research in recent decades includes the work of Millman (1969; 1970), McEwen (1977), Callander (1987) and Wightman (1996; 2013), much of it with radical land reform overtones.

Land ownership churn

The ownership and structure of Scotland's estates shows a degree of continuity across the centuries with over a quarter of Scottish landowning families able to trace their landowning ancestry back to at least the 16th century (Callander, 1986; Cramb, 2000). Hindle et al., (2014) also reported continuity of estate ownership with 35% of 228 respondent's families having owned their land for over 100 years, including 5% who could trace ownership for more than 500 years. McKee et al. (2013) found that 91% of respondents to a survey of 84 estates, regardless of whether they had inherited or purchased their estates, wished to pass the estate to their heirs suggesting that the long term pattern of low turnover in the estate land market is unlikely to change in the foreseeable future.

LRRG (2014) highlighted that the " lack of change in the number of owners with over 405 ha (between 1872 and 1970) reflects the degree to which both the underlying structure of private estates, and the concentrated pattern of private landownership, has continued to survive in rural Scotland." It is now estimated that 432 landowners account for 50% of the privately owned land in Scotland (Wightman, 2013). Additionally, Hindle et al. (2014) estimated that 1,125 "estates" [24] controlled about 70% of privately owned land in Scotland.

Land Settlement

Land settlement in Scotland took place under a number of legislative phases in the early part of the 20 th century in response to rural overcrowding, landlessness and deprivation that had developed in many parts of the Highlands and Islands during the 19 th century (Mather, 1985). The Napier Commission Inquiry (1884), the Crofters Holdings Act (1886) provided the foundations for land settlement and the Royal Commission (Highlands and Islands) (1892) concluded that " 325,000 ha of land currently used as deer forest or large sheep farms was suitable for subdivision into holdings to be occupied by crofters or other small tenants, and that a further 225,000 ha were suitable for subdivision into farms of moderate size." Mather concluded that these early actions " marked a turning point and set the scene for state intervention."

The Congested Districts Board ( CDB) operated between 1897 and 1912 with the aim, amongst others, to acquire land (by agreement) for settlement and to help create new holdings on private estate land (Mackay, 1955). Mather (1985) suggested that despite the small scale of early land settlement there was evidence of intensification of land use with considerable local effects: " In the case of the property of Syre in Sutherland, for example, which was acquired by the CDB in 1900, the 5,000 ha sheep farm was subdivided into 21 holdings. The population resident on the property increased from 10 to 21, the cultivated area increased from 2 to 94 ha, and livestock numbers increased almost forty-fold in the case of cattle and by about 27% in the case of sheep" [25] .

Leneman (1989a) and Mather (1985) tracked the land settlement process and discussed challenges faced by the land settlement programme: lack of capital to equip intermediate sized holdings, absenteeism, lack of infrastructure, lack of agricultural skill by ex-servicemen, etc. Mather (1985) revealed that the number of state smallholdings started declining in the 1950s, particularly as a result of structural improvement policies leading to amalgamation of smaller holdings into more viable units. Mather also highlighted anecdotal evidence of the " Rapid resale of holdings by purchasing tenants to neighbouring farmers. The number of holdings disappearing in this way is as yet unknown, as is their spatial pattern".

Both Mather (1985) and Leneman (1989b) highlighted that no evaluation of small holdings in terms of social, economic and agricultural impacts had been made (by the 1980s), with the latter suggesting that: " Studies could usefully be carried out comparing areas with and without settlements with regard to population levels, size of holdings, prosperity and so on. Until someone attempts such a comparison, there is no way of knowing how much local impact the land settlement programme still has at present".

Break up of large estates

Clark (1981) identified a weakening of the oligopoly of landownership in many regions of Scotland between the 1870s and 1970s, illustrated by a reduction in estate size and an increasing number of owners. However, the reduction in estate size in some regions was matched by the expansion of other estates, often owned by old Scottish families such as well as an increasing number of 'newcomers' (Sutherland, 1968; Clark, 1981). Callander (1987) reported on important changes in the pattern of landownership during the 20 th century, caused by: (a) a reduction in area held by larger estates; (b) an increase in number of small owners, and; (c) a major expansion in the extent of land owned by the state and public agencies.

Whilst Callander (1987) suggested that the traditional estate structure survived between the 1870s and 1970s with a fair degree of consistency, his research highlighted that the fragmentation of larger estates was a key trend in changing landownership patterns throughout the 20 th century where the number of estates:

  • Over 20,000 acres (8,000 hectares) fell from 171 to 121 (29% decline).
  • Over 5,000 acres (2,000 hectares) fell from 576 to 546 (5% decline).
  • Over 1,000 acres (400 hectares) fell from 1,758 to 1,723 (2% decline).

Cramb (2000) refers to Scottish land being more recently " subject to fashions, fads and the relative health of world economies." He discussed that: " there has been an Arab period, there has been a Dutch period, there is an on-going Danish period… there was a very strong Hong Kong period…and a rock group period", highlighting the global demand for Scottish estates and land during the 1980s and 1990s.

Table 3 provides a summary of the patterns of change in Scottish landownership, and the drivers of change, that took place during specific periods of the last century.

Table 3 Land ownership trends during the last century

Period Land Ownership Trend
Early 20 th Century Deteriorating economic conditions led to increased number of land sales and fragmentation of many large estates (Callander, 1987)
Inter-War Continued fragmentation of large estates, particularly during the depression of the 1920s. Emergence of the trend for holdings to be sold to estate tenants leading to the rise of the owner-occupier farm. Owner-occupied farmland increased from 11% in 1914 to 29% in 1929 (Callander, 1987). Government purchase of private land for crofting and smallholder resettlement and for public forestry.
1950s to 1970s High public support (grants and subsidies) for agriculture and forestry coupled with a reduction in the overall tax burden faced by landowners improved the financial position of many farms and estates. Less pressure to sell off land and limited the growth in owner-occupier farmland (51% in 1960 and 57% in 1970). Continued purchase of private land for forestry by the state (Callander, 1987).
1980 to 2000 Private purchase of significant areas of land for forestry until tax relief ended in the late 1980s. Growth in foreign investment in Scottish estates but also domestic period of purchase in the 1980s as a result of the stock market boom. Very large insurance claims (Piper Alpha, Exon Valdez, San Francisco earthquake, asbestos and pollution cases) in the late 1980s and early 1990s led to many Lloyd's "names" having to realise assets causing greater churn within the estate market. Rise in area of land owned by environmental organisations. Area of farmland under owner-occupation continued to rise from 59% in 1982 to 68% in 2000 (Scottish Government, 2015).
2000 - onward Growth in community ownership of land, in particular some major purchases (often in conjunction with environmental organisations) of private estates, often where there have been issues between the local communities and landowners. Continued growth in area owned by environmental organisations, with some rationalisation of the area owned by the state. Area of farmland under owner-occupation continued to rise, to 77% of total agricultural area in 2014 (Scottish Government, 2015).

Landownership change and scale factors

In considering the land ownership policy environment, a number of complex factors that affect changes in land ownership were considered that may also impact on the scale of land ownership held (by individuals, partnerships, trusts, etc.). Whilst many of these factors are interconnected, to varying degrees, for individual landowners and / or individual land transactions, they can impact on land ownership change and scale of landownership over time.

Using the research team's expertise, these factors were split into those that may influence new purchases of land, those that may affect sales of land, those that affect succession of land, and finally monetary / fiscal policies that directly impact on land holdings and sale/purchase decisions. These factors and the potential impact that they have on land values and scale of ownership are represented in Figure 2 with greater detail of how some of these factors affect land ownership (and scale of ownership) provided in Appendix 5.

Figure 2 Factors affecting land ownership and potential impact on scale

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Contact

Email: Graeme Beale, socialresearch@gov.scot