Regenerative Farm Business Tenancies: what tenant farmers should know
27th Jul 2026
Author: Michael Bracegirdle
Regenerative Farm Business Tenancies are attracting attention following the Duchy of Cornwall’s launch of its new regenerative Farm Business Tenancy, known as an rFBT.
The first Duchy tenancy of this kind relates to Monkhall Farm in Herefordshire. It is a substantial holding being offered on a long-term tenancy, with the aim of supporting regenerative farming practices, soil health, biodiversity and long-term business resilience.
Whilst this first rFBT is outside the North West, its relevance lies in the direction of travel. It reflects a wider shift in agricultural tenancies, where environmental aims, regenerative farming practices and long-term land management are becoming more closely linked to the terms of the tenancy itself.
For tenant farmers and landowners, the key point is simple: an rFBT may offer opportunity, but the wording matters.
Why are rFBTs being introduced?
The Duchy of Cornwall’s introduction of a regenerative Farm Business Tenancy reflects a broader shift in how some estates are thinking about land management.
Regenerative farming is often linked to improving soil health, encouraging biodiversity, managing water more carefully and supporting the long-term resilience of farmland. For landowners, those aims may now sit alongside more traditional considerations such as rent, productivity and estate management.
For tenant farmers, the practical question is how those aims are reflected in the tenancy. Moving towards a regenerative system may take time and investment. A longer-term tenancy can give a tenant more confidence to plan ahead, but only if the agreement is clear about what is expected, who is responsible for the cost and what happens if circumstances change.
What is a regenerative Farm Business Tenancy?
A regenerative Farm Business Tenancy is not a separate statutory tenancy in its own right. It is a Farm Business Tenancy which has been adapted to include regenerative farming aims and obligations.
Those aims may include improving soil health, increasing biodiversity, reducing reliance on certain external inputs, supporting nature recovery and building a more resilient farming system. The precise obligations will depend on the wording of the agreement.
That distinction is important. The label “regenerative” may sound positive, but it does not tell you, on its own, what you are legally agreeing to do. The tenancy agreement will need to be reviewed carefully so that both parties understand their responsibilities, the costs involved and the consequences if targets are not met.
Why is this relevant to tenant farmers?
Many farms are already engaging with environmental schemes, diversification, soil health projects and more sustainable land management. As large estates and institutional landowners develop new tenancy models, similar ideas may begin to appear in new Farm Business Tenancies or proposed variations to existing agreements.
This does not mean that existing tenant farmers will automatically be affected. However, if you are offered a new tenancy, asked to sign an updated agreement or invited to take part in a regenerative or environmental scheme linked to your holding, you should understand how those arrangements fit with your tenancy.
A long-term tenancy can provide valuable security. It can give a tenant the confidence to invest in infrastructure, soil improvement, equipment and business planning. It can also help landowners secure longer-term stewardship of their land. The challenge is making sure the tenancy is fair, clear and commercially workable for both sides.
What should you consider before signing?
Before signing an rFBT, or any tenancy with environmental or regenerative obligations, it is important to understand exactly what is being asked of you.
The agreement should make clear what the tenant is expected to do. General wording about improving soil health or biodiversity may not be enough. You should consider whether the obligations are fixed or whether they can be changed during the term. You should also check how progress will be measured, who will decide whether the obligations have been met and what evidence you will need to provide.
Cost is another important point. Moving to a more regenerative system may involve investment in infrastructure, specialist advice, equipment, seed mixes, soil testing, mapping, monitoring or changes to farming practice. The agreement should be clear about who pays for those costs, whether the tenant can access grants or environmental schemes and whether the landlord’s consent is needed before entering into those arrangements.
Rent review wording should also be considered carefully. A regenerative transition may affect income, yields, costs and cashflow, particularly in the early years. If the tenant is taking on additional obligations or restrictions, the rent mechanism should be clear and commercially sensible.
Longer-term tenancies often involve investment by the tenant. This may include physical improvements, soil improvement, habitat creation or other work which benefits the holding beyond the tenancy term. The agreement should deal clearly with consent, ownership, compensation and reinstatement, including what happens at the end of the tenancy.
Farming businesses also need room to respond to weather, markets, policy changes, labour issues and disease risk. A regenerative tenancy should support good land management, but it should not be so rigid that it prevents sensible decision-making.
What should landowners consider?
For landowners, rFBTs may provide a useful framework for long-term land stewardship. They can help align tenancy terms with estate aims around soil health, biodiversity, carbon, water management and future resilience.
However, clarity is essential. If obligations are too vague, they can lead to uncertainty. If they are too prescriptive, they may be difficult for a tenant to deliver. A well-drafted agreement should set out shared objectives, practical responsibilities, funding arrangements, review mechanisms and a clear process for dealing with change.
It is also important that the tenancy remains commercially realistic. A tenant who has confidence in the agreement is more likely to invest, engage and deliver long-term results.
Does this affect existing Farm Business Tenancies?
Not automatically.
If you already farm under a Farm Business Tenancy, the launch of the rFBT model does not, by itself, change your agreement. However, the issue may become relevant if your tenancy is being renewed, varied or replaced, or if you are entering into environmental or regenerative arrangements connected to the holding.
Before agreeing any change, you should check how the new obligations sit alongside your existing tenancy, grant schemes, business plans, finance arrangements and succession plans.
Speak to us before you sign
Regenerative Farm Business Tenancies may offer real opportunities for tenant farmers and landowners, but each agreement needs to be considered on its own terms.
At Butcher & Barlow, we advise tenant farmers, landowners and rural businesses on Farm Business Tenancies, environmental obligations, tenancy renewals and land management arrangements. We can help you understand what the agreement means in practice, where the risks sit and whether the wording supports your long-term plans.
If you are being offered a new tenancy, considering an rFBT or reviewing an existing Farm Business Tenancy, please contact our Agriculture & Rural Affairs Team.
Information in this article was correct at the time of publication. The information is for general guidance only. Laws and regulations may change, and the applicability of legal principles can vary based on individual circumstances. Therefore, this content should not be construed as legal advice. We recommend that you consult with a qualified legal professional to obtain advice tailored to your specific situation. For personalised guidance, please contact us directly.