Last year's precedent-setting Moonzie court case ended with a reversal at appeal, when Lord Gill ruled that a tenant's Single Farm Payment should be considered part of the farm's income and thus a relevant factor in calculating its rent.
LibDem MEP George Lyon asked the European Commission whether it had the legal power to prevent SFP entitlements being used in this way – and this week it replied with a firm 'no'.
Farm Commissioner Dacian Ciolos stated that: "As to the lease of farms, there is contractual freedom between the two parties and the Commission has no competence to intervene in order to ensure the prevention of the situation."
Mr Lyon said: "This news will be deeply disappointing to tenant farmers. The only way forward on this matter will be to seek a solution through the Scottish Government's Land Reform Review."
In better news for tenants, Mr Ciolos did confirm that any attempt by governments to stipulate that at the expiry of a farm lease SFP entitlements should transfer from the tenant to the landlord would not comply with the scheme rules.