Tag Archives: land prices

Is your future as secure as his?

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The cat has won his spurs. In the last two mornings he has allowed himself to be witnessed killing two rats. He may be small but he is puissant. From being the newbie he is promoted to being ‘The Cat’ and is fully entitled to sprawl majestically in the straw waiting for evening to fall. He is now fully part of the team and is on pretty much the same terms as the rest of us, damn all salary but in his case he gets a bonus of all the rats he can eat.

But what about the rest of us? I was talking to a chap.  He’d been to a meeting about the new ELMS scheme. One of the speakers had talked about ‘carbon’ and the need to off-set it with regards to suckler cows. The speaker suggested that farmers could get a scheme where they planted some trees to go with their cows. Then from the floor of the meeting a land agent from a major local landowner and landlord stood up and pointed out that if their tenants planted trees, the land reverted immediately back to the landlord under their tenancy agreement.

The problem with environmental schemes is that, to be brutally honest, they don’t pay the bills. In our case if we put all our land into schemes (and effectively abandoned even attempting meaningful agriculture,) we’d get £12,360.

If I worked forty-eight weeks, 28hrs a week, at the minimum wage I’d earn £12,556.80.

To be fair I haven’t included in the schemes any hedgerow work. This is because basically I wouldn’t have time to do it, because I’d be too busy working off farm to earn a living.

Talking to somebody else, he’s hoping to take on another farm that’s coming up near him. The problem is, how much does he tender for the rent given that the BPS money is a declining income stream? Or does he just tender a lower rent and tell the landlord to keep the BPS? And if he does take the farm on, should he run it as a separate business? Because this would give him two businesses based around two farms. This would take both businesses down below the threshold for the higher rate of cutting BPS. It’s an important decision. This could make him (or save him losing) £20k a year, so perhaps £100k over the period.

But if he did this, experience has led him to be wary about going into environmental schemes during that period. This is because he would worry about the confusion caused if he then re-amalgamated his two businesses afterwards. (RPA is notoriously bad at coping with that sort of thing.)
Also he is starting a negotiation with his landlord. After all, in his eyes his BPS money largely goes to pay his rent. In his case there could be an increase in environmental payments, but over the next ten years, he’ll still see a decline in income from the government. He feels that misery loves company and pain like that is there to be shared. It seems a lot of landlords are beginning to get nervous.

It’s interesting, his gut feeling from his area (which is close to a National Park, some of his neighbours are in it) is that some farmers of a certain age are looking at walking away. They’ll just cash up and leave the industry.
Some landlords are contemplating having to take land in hand, and will probably just put it into trees if there’s a decent payment on it, especially if they are an estate with a decent forestry set-up. It would be interesting to hear if the NT has any thoughts on this. As a major agricultural landlord they could find themselves engaged in a lot of negotiations.
The general feeling he picked up at meetings in his area was that decent land will probably be worth renting, but the poorer stuff might go begging. It could be that larger farmers will just add a lot of acres. They can probably afford to ranch them for a decade or so, waiting for the upturn.

My thought is that it’s going to vary a lot from area to area. Round here I don’t think we’ll see land prices falling a lot, especially if you can sell it in small lots suitably for ‘horsey-culture’.

A mate of mine works in the local shipyard. To be fair, a lot of them are on decent money. He told me that one day the bloke working in the next desk to him took a phone call. When he put the phone down he looked distinctly shaken. My mate wondered if there was a round of redundancies in the offering.

No, it’s just that his wife has a couple of horses and she was sick of sharing grazing, or paying for livery. So when she saw a paddock come up for auction, she’d got clearance from the building society to add up to £40,000 onto their overdraft. She was going to buy that paddock.

Given she’s also working and is on reasonable money, it’s not an entirely unreasonable attitude on her part. Looked at long term, she is unlikely to lose her money and they might even see a better return on it than on any other savings they have.

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There again, what do I know? Talk to the expert
Available in paperback or ebook.

 

 

As a reviewer commented, “Once in a while a book really gets to you. Jim Webster’s book Sometimes I just Sits and Thinks has done just that to me. Jim is a farmer in the English county of Cumbria. His sense of humour shines throughout each episode. If you come from farming stock as I do, this is the book for you. In my mind’s eye I was out there with Jim and his faithful Border Collies Jess and Sal. I thoroughly enjoyed reading this book….”