Demand for land and farms at all time high but why the shortage? By Jeremy Jehan
The demand for farms and land is at an all time high, but while many existing landowners are keen to expand, availability remains inexplicably tight. Food production and buzz phrases like “food security” have never been in sharper focus at the cutting edge of the agricultural industry. Although dairy farmers are currently battling for a fair price for their milk, recent years have seen improved returns from beef and sheep production while commodity prices have also rallied and the coming months should see cereal prices escalate sharply. Those with foresight regard agricultural land as a sound investment and while the Inheritance Tax regime – which means many estates can avoid paying 40% Inheritance Tax – has clearly hindered the sale of many farms, the demand for farms and land continues unabated. To maintain its vibrancy our agricultural industry relies on young entrants with new ideas and energy, but the lack of availability of farms and land is a handicap to those keen to “climb the farming ladder” band yet unable to find suitable starter holdings. Family farms regard buying or renting more land as the obvious expansion route but the current land tenure system especially under the Farm Business Tenancy legislation - is the major cause of the problem. It created a breakthrough in landlord-tenant relations and remains at the core of short-term agreements but it also triggered new attitudes among landowners who may previously have considered selling rather than letting. The outcome has been a dramatic lack of land sales – a situation that has to be addressed. The stagnation in farm land sales isn’t healthy for an industry whose secure future depends on farms being able to expand and for investors to do business. Only by achieving an increased mobility in land ownership can the UK retains its pivotal role as a leading food producer for home and world-wide markets.
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