Thursday, April 18, 2013

Hoovering up farmland

Sir James Dyson has bought up thousands of acres of Lincolnshire farmland, reports Farmers Weekly. He is believed to have paid some £150m for more than 6,800 ha./17,000 acres through a new company Beeswax Farming (Rainbow) Ltd. He has purchased much of the Norton estate which was destined to be Britain's largest dairy farm until the plan was defeated by animal welfare activists, backed up by objections from the Environment Agency.

There's nothing new about wealthy investors or even institutions buying up farmland, indeed the institutitional involvement has been greater in the past and led to a report. One of the advantages of owning farmland is that it does not incur inheritance tax. Some critics argue that farm land values are bumped up, making it difficult for 'genuine' farmers to expand or enter the market. Average English farmland values reached £22,500/ha (£9,100/acre) in the last three months of 2012. If you borrowed to buy at those sort of prices, you could not fund the lending out of farming.

There has been a fierce debate in Farmers Weekly about whether young farmers should be given a hand up the farming ladder if they are not going to inherit a farm. The general view seems to be against special subsidies, and indeed one would not want to create a new category of subsidy. Many would-be farmers have to settle for being a farm manager.

One argument in favour of some form of subsidy is the ageing farm population, which applies across Europe. However, the figures may be somewhat misleading as the nominal head of the farm may be semi-retired.

One challenge has been the reducing number of county council farms available for rent. For many farmers these relatively small farms served as the first, but sometimes the last, step on the road. Like many farms, they survived by the farmer's partner working. However, many county councils have been selling off these farms to realise the capital.

Farming is hard work and demands a wide range of skills. The returns are often little better, or even worse, than the minimum wage per hour worked (although not on arable farms in Lincolnshire). Of my two nephews from a Welsh hill farm, one has moved to Manchester where he pursues an urban lifestyle. The other works the farm with his father and evidently enjoys his way of life.

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