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Caledonia |
1. IntroductionIn 1993 the tenants of the crofting township of Borve and Annishadder, which lies a few miles north-west of Portree on the Isle of Skye, came to an agreement with their landlord, Major John Macdonald, to purchase the 1860 hectares of land over which they held crofting rights, consisting of both their individual crofts and the common grazings (for a map, see Appendix 4.1). To protect their rights as crofting tenants, the crofters formed a separate legal entity to which they transferred the ownership of the land including the former proprietor’s interest as landlord of the crofters. In doing so they were following the example of the Assynt crofters who had formed the Assynt Crofters’ Trust and bought their land. However the crofters at Borve came to buy their land as a result of their attempt to bring benefits to the township, unlike the crofters of Assynt who felt compelled to act by the possibility of finding their land sold to several different new owners who would become their landlords. The agreement reached between the crofters and the estate proprietor has provided benefits for both parties. The crofters of Borve and Annishadder are now able to make their own decisions about how best to utilise the resources of their land. Their former landlord, Major John Macdonald of Tote, has found a suitable way of freeing himself and his family of the burdens of managing this part of his estate. Major Macdonald states that his family has never evicted a tenant. Indeed he relates how his grandfather responded to the evidence submitted to the Napier Commission by a Sergeant Nicolson, a local man and a veteran of the Crimean War, by buying Borve, then a sheep farm, in 1894 and dividing it into smallholdings - the crofts of Borve and Annishadder. The family’s link with the land will continue as he has been able to negotiate a lease of the sporting rights now belonging to the new owners.
The Crofter Forestry (Scotland) Act 1991 enables crofters to plant trees or encourage natural regeneration and so turn parts of their common grazings into woodlands on obtaining the written consent of their landlord (the landowner) and the approval of the Crofters’ Commission (see Appendix 4.2). (Before 1991 the law recognised each individual crofter as a tenant from year to year only with no right to plant, or enjoy the benefits of, trees.) The crofters of the township of Borve and Annishadder wished to take advantage of the 1991 Act and create woodlands on part of their land, in order to provide some shelter for their sheep, and also to make the work of gathering easier. The grazings committee was also keen to have the benefit of grant aid which they believed might be available to early applicants. The committee called a meeting of the crofters who each had a share of the common grazings, and was mandated by these shareholders to act for them and to put proposals to the landlord. Six months later, after refining their ideas, they approached MajorMacdonald for his approval, as required by the Act. Quite unexpectedly, however, they found their way blocked. Major Macdonald objected to the grazings committee’s proposals for two reasons. Firstly, he felt unhappy about an arrangement which would tie up the areas to be planted for 60 years at an annual rent of less than 1p per 2 acres. This he felt was unfair to landlords whose families had not evicted tenants in the past. He had not been opposed to the bill which led to the 1991 Act but he had hoped to see it modified in a way which he felt was fair to landlords like himself. He had tried but failed to persuade the Scottish Landowners’ Federation to attempt to do this. Secondly, he had decided before the crofters approached him that he could use his ‘veto’ to persuade the crofters to buy their land. He wished to do this for several reasons. He believed it was preferable for the crofters to own their own land and have responsibility for their own destinies. In addition the income from the crofting rents did not cover the administration costs, and his son, Charles Macdonald, had indicated that he did not wish to take over the administration from his father. In the six months of preparation, one of the committee, Alaister Nicholson, and Major Macdonald had informally discussed possible changes in the administration of the township and indeed of the other townships on the estate. In these discussions there had been aired the idea of some form of joint management whereby the crofters would involve themselves in some form of self-management of their lands. The landlord’s response to the grazing committee’s forestry proposals was to suggest a form of joint venture, in which both the township and the estate would share responsibility for the management of the project. It became clear to the grazings committee, however, that the landlord was thinking of an equal partnership in which he had a half interest, whereas the committee felt that the landlord should have only a single share, which would be no larger or smaller than that of any individual crofter in the township. (The Crofting Forestry Act of 1991 does not require crofters to offer to their landlord any part in their scheme nor to release from their land any part for the sole use of the landlord.)
After some discussion, Charles Macdonald suggested that the committee should simply buy the township lands. However, there was a reluctance to name an asking price, as the only comparable land sales had been of land not subject to crofting tenure. Both Major Macdonald and the grazings committee were aware, of course, that under the 1976 Act every crofter has the right to buy his own land from his landlord for 15 times the annual rent. In Borve the rents had remained unchanged since 1908, but recent decisions of the Land Court suggested that if Major Macdonald sought to have new fair rents fixed by the court the increase would be between 5 and 7 times the existing rents. This Major Macdonald considers unfair, arguing that prices generally are forty-five times higher than they were in 1908. However he eventually suggested a price of £30,000. The grazings committee responded by offering £20,000 for the land including the mineral and shooting rights and an element for good will. Only when the landlord had indicated that he was prepared to accept this offer, did the committee inform the other sixteen crofting tenants of the stage negotiations had reached. They readily gave their agreement and financial backing. The crofters then set up Borve and Annishadder Township, a company limited by guarantee, to whom they transferred ownership of the land including Major Macdonald’s interest as landlord. Confronted with an invitation to buy their land, the grazings committee had found support close at hand. Earlier in the year the Assynt crofters had succeeded in buying their land and this gave the committee much encouragement. The Scottish Crofters’ Union put them in touch with the Assynt crofters who had pioneered this route and who were very familiar with the key issues. The device of a separate legal persona had allowed the crofters of Assynt to preserve their legal status as crofters and yet jointly to own their land. Had they become owner-occupiers they would have lost their automatic entitlement to grants. The committee also had the advice of a solicitor who had been taking a close interest in what had been happening in Assynt and was able to clarify what was possible. Alaister Nicolson regards this input as critical in the setting up of the company. The committee also received financial help from Skye and Lochalsh Enterprise (SALE) and the Highland Fund (HF). SALE helped with the legal fees which included both the setting up of the company and the conveyance of land from the landlord, and some accountancy fees. SALE also paid the costs of a feasibility study and a business plan prepared by a local firm of accountants, and the cost of up-to-date and accurate maps. The extent of all the financial help provided by SALE amounted to just under £5,000. HF, which is based in Glasgow and has a record of helping crofting communities, readily agreed to provide a loan of £8,000 at an interest rate of 5% per annum to help those crofters who did not have available the capital required to pay their share - £1,000 each - of the purchase price.
The crofters of Borve now own their land through their company, Borve and Annishadder Township, and have retained their status as crofting tenants. They are now tenants of the company which they themselves own. All of the 20 crofters (many of the original 36 crofts have been amalgamated and now some crofters have more than one croft) are shareholders in the company and have elected directors, all but one of whom was a member of the grazings committee. Of their 1860 hectares, 398 hectares are crofts and apportionments individually tenanted, and the remaining 1462 hectares are the common grazing land. The grazing committee’s plans for planting trees have gone ahead. An area of about 20 hectares has been planted with mixed native species, principally to provide shelter and amenity. Most of the costs of planting will covered by the income from the grant paid on completion of the work of planting and from the maintenance grant which is paid annually for 15 years.
The directors are also waiting for the Forest Authority’s approval of an application for the planting of a second larger block of about 60 hectares in which there will be a greater emphasis on commercial planting 1. The committee has not yet quantified the monetary and other economic benefits of their planting proposals, aware that much will depend on changes in levels of subsidy in more than one sector and also on economic conditions generally. For example, it is possible that coppiced alder may well become an economically viable bio-fuel. This should generate an income and possibly create some local employment, as the harvesting of the ‘crop’ would probably be fairly labour-intensive. Crofter forestry may have other spin-offs besides generating an income from timber and some local employment. It may be possible, for instance, to sell some ‘exclusive’ house-sites on the fringes of new woodland blocks. Other initiatives have been taken. A pony-trekking business has been started, which would probably have not been set up if the Township had not bought the land. A track leading to the hill grazings has been built. The directors are looking seriously at the possibility of harnessing wind-power and are currently negotiating with several companies interested in community schemes for generating electricity from renewable resources. There are plans to set up a test mast to obtain a full year’s data about wind conditions, which must be obtained before any contract can be negotiated. The cost of a test mast and a year’s readings is in the region of £8,000, but the directors believe they can reduce this by taking the readings themselves. This may well allow them to have more say in negotiations than they would if they employed a company to do the work. They believe that collecting data over a year may be classed as a feasibility study (which may be of interest to other communities in Skye as well as Borve and Annishadder) and which may therefore qualify for financial support from Skye and Lochalsh Enterprise. The erection of a test mast, which will involve construction of an access road, will need planning permission. With their investment in trees, the pony-trekking business, and the possibility of an income from wind-power, the members of Borve and Annishadder Township have begun to develop the economic potential of the resources to which they now have access, and to create a more diverse base on which to sustain the livelihoods of the people of the township. This may be important if there are far-reaching changes in the local economy. The crofters feel well-placed to weather any reduction in subsidies for hill sheep. However, the directors feel under no pressure to rush into development. The intention is, rather, to reach consensus among the crofters over a ten-year plan.
There is little doubt of the success of the crofters’ initiative. No hidden snags have appeared. The loan from the Highland Fund will be paid off within five years. New ideas are being explored. Major Macdonald has been freed of the burden of administration. In agreeing to the sale he wanted no come backs - none have occurred - and he has offered the other townships on his estate the same opportunity. Indeed he suggested to the directors that they might take over the administration of the other townships - an offer they turned down with alacrity. Success, though, is not assured by the completion of the legal and other formalities nor indeed by a demonstration that an economic potential exists. An initiative born out of a spirit of communal self-reliance cannot be said to have fully succeeded if it fails to maintain the mutual trust which allowed it to be created and which encouraged the crofters to act jointly for what they perceive to be their common good. The transfer of ownership from estate to township company does not in itself guarantee this, although the collaborative success this represents augurs well for the community. In one sense little has changed - each crofter still has the right to buy his croft for 15 times the annual rental and become an owner-occupier. There is no absolute guarantee that some future owner-occupier might not try to develop his or her croft, by for example selling off house-sites, in ways which might threaten the social cohesion of the township. The directors are aware of such a possibility but are not unduly worried by it. They feel that the planning authorities would have to give serious consideration to any objections they as residents of a township in community ownership might advance. On another level, they feel they would not have negotiated the purchase if they were not confident that the collaborative spirit within the community was the most effective guard against such an eventuality. The readiness with which the 15 or 16 crofters who were not actively involved in negotiating the deal with Major Macdonald supported the grazings committee when the details were presented to them would seem to bear out such a faith in the community. And so far, as Alaister Nicolson has observed, no one has rushed to sell. Not every township is fortunate in having a landlord who supports the principle of independence and who is disposed, from personal conviction and family tradition, to help his tenants to pursue legitimate means of improving their economic welfare. However, the road taken by the people of Borve and Annishadder is open to any crofting township which has a landlord who, like Major Macdonald or Mr Michael Foljambe at Melness in Sutherland, is sympathetic to his crofters’ desire to take responsibility for their own affairs Since the way was pioneered by the Assynt crofters in 1992, much help is available to any township which has the opportunity to buy its land - from the Assynt Crofters’ Trust, and now from the people of Borve and Annishadder themselves. In addition, the Crofters’ Commission and Highlands and Islands Enterprise have set up the Crofting Trusts Advisory Service which will give guidance to townships and also provide financial help with a feasibility study of possible developments (see Appendix 4.3). Further help with projects - both advice and grant-aid - may be available from a range of organisations and agencies - for example, the local enterprise company, the Forestry Authority and Forestry Enterprise, and Scottish Natural Heritage. However it should be stressed that grants from these organisations are discretionary, and are only awarded to projects which meet the organisation’s objectives. However the success of such an endeavour is not guaranteed. Instead it depends on a number of factors. The members of the grazings committee point to the compact size and the social cohesion of their township. They feel it would have been more difficult to reach agreement to proceed with the purchase in a larger community, and attribute the social cohesion to the system of sheep management in which the sheep are owned by individual crofters but are run collectively, a system of communal labour which they feel encourages co-operation and active involvement in issues which affect their shared interests. They also stress the importance of having someone who has the time, the willingness and ideally the contacts to follow up ideas, investigate possibilities, engage in discussion with other parties, contact possible sources of help or start making enquiries when it is not immediately clear whom to approach. The Borve group were fortunate in that Alaister Nicolson was able to assume this role - "If Alaister hadn’t come back from South Africa, I doubt if we’d have got started", John Angus Mackenzie suggests. The personal resources of the individuals who make up a steering committee for such a project are obviously of great importance. The township was particularly fortunate in having an active grazings committee which had kept abreast of changes in the law affecting crofting and forestry. A township needs to have individuals who are able to give leadership and ‘manage’ the process of negotiation, confident that they have the community’s backing. In the members of the grazings committee - John Angus Mackenzie, Donnie Macdonald, Sam McLelland, Alaister Nicolson - the township had a group who shared an openness to new ventures and who between them could provide the necessary range of skills and talents.
The tenants are crofters, that is to say tenants of their crofts. Each croft may consist of
The right to share in common grazings forms an important part of the great majority of crofts. The common grazings committee are responsible for the maintenance, improvement and management of the common grazings. The committee acts for all the crofters and any others who are shareholders in the common grazings. The Crofters Commission will seek to ensure that each common grazing is under the control of a committee. A crofting township is the name given to a group of crofts in close proximity. It will also include non-crofting subjects such as houses and gardens at the same location. Borve and Annishadder Township is the name of the company formed by the crofters to hold the ownership of title of their land in trust. They have chosen not to include the word " limited" in the company name. The persons forming the company chose how the company is to be run and who can become members. The company is limited by guarantee, that is to say, it has the benefits of limited legal liability. The members risk losing only £1 each. Creditors can look only to the company’s assets for repayment of outstanding claims. The members elect the company’s directors. The directors run the company which is the owner of the township land and the landlord of the crofters. The company is passive so far as the tenants are concerned. The crofters may choose to organise themselves and undertake commercial business through another company limited by guarantee called a trading company. This could be a wholly owned subsidiary of the trust company. In this way the ownership of the land is not put at risk. The legal structures used for community ownership are often called Trusts. This term is used for convenience as a means of indicating that companies are not private, ‘for-profit’ companies. The term has received official approval and has been adopted by the Crofting Trusts Advisory Service (CTAS). Company limited by guaranteeThis form of incorporation is appropriate for an Association of persons wishing to have the advantages of forming a company without having to subscribe for shares and without incurring personal liability. For this purpose a company can be formed with liability limited by guarantee. Each member undertakes to contribute a certain sum if the company is wound up, e.g., each member may undertake to subscribe £5 in the event of the company being wound up. The advantages are that the Association becomes a company which can own property and enter into contracts and take or defend legal proceedings, and the members of its council or board of directors have no personal liability. The Memorandum of Association contains a declaration of the guarantee. If the company is wound up no contribution can be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company. The use of a company or business name which includes the word "trust" require the approval of the Secretary of State for Trade and Industry. It is also possible to exclude the word "limited" from the company name, e.g., "Borve and Annishadder Township" and "Melness Crofters Estate". A company limited by guarantee which is referred to as a trust is very different to a public or charitable trust. The trustees of a public or charitable trust have virtually permanent tenure and normally appoint their successors. They have sole responsibility for the assets which are entrusted to them. In contrast, the company limited by guarantee is democratic in that its members have ultimate control and appoint a management committee (or board of directors) usually for a fixed term. Assistance has been given by ACE-HI (Association of Community Enterprises in the Highlands and Islands), also a company limited by guarantee, which has charitable status and gives advice to community businesses on a variety of matters such as financial and legal problems.
This is not a simple acquisition of land. It is a purchase by crofters of their landlord’s interest in the bare land which they occupied as tenants. The form of tenure enjoyed by crofters is unique, having been created by statute more than a hundred years ago. The Crofters Holdings (Scotland) Act 1886 was founded on the three principles of (a) security of tenure subject to compliance with specific conditions; (b) payment of a fair rent; and (c) payment to the crofter on termination of his tenancy of compensation for improvements provided by himself or his predecessors. Over the years permanency of the crofters’ position became a form of ownership. At last, the claim of the crofters to a status higher than that of protected tenants was recognised by the Crofting reform (Scotland ) Act of 1976 ("the 1976 Act"). The principle of conversion of an individual’s crofting tenancy to full ownership was thus established. It should be noted that tenure of land tenanted in common (common grazings) was to remain undisturbed. The 1976 Act allowed a crofter to acquire his croft land at its crofting value. i.e., 15 times its updated fair rent. It was also clear that what was being acquired was the landlords interest in the land as landlord. In one important test case it was made clear by the Court of Session that the crofter had power under the 1976 Act to nominate the party in whose name that interest might be taken. At Borve, the former landlord appears to be happy that he is no longer burdened with the administration of an unprofitable crofting estate. Other landlords who consider the administration of their crofting estates to be uneconomic or otherwise unrewarding might be persuaded to deal with their tenants in similar fashion. The crofters of Assynt, who were in a very different situation from those of Borve, had learned about the test case and recognised the viability of a body specifically created to hold the landlord’s interest of their lands. They had felt compelled to act by the threat that their townships and common grazings might be sold to several different owners who would become their landlords. The high profile of the crofters’ campaign in Assynt reduced the demand for their land and the Assynt Crofters trust Limited was set up to hold the ownership of what had been the North Lochinver Estate.
For further information, contact Alaister Nicolson, 5 Borve, by Portree, Isle of Skye. Telephone: 01470-532425
David Reid wishes to thank Major John Macdonald, Alaister Nicolson, John Angus Mackenzie, Donnie Macdonald and Sam McLelland.
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