Young farmers are being ‘priced out’

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YOUNG farmers wanting to get on the ladder by buying their first piece of agricultural land are being priced out of the market by investors.

Figures for 2011 released by agricultural business consultancy Brown&Co showed a 15 per cent drop in the number of local farmers buying land and a corresponding 13 per cent increase in the sales to non-farmers.

Lincolnshire NFU said it has noticed the trend, but it does not mean that prime agricultural land will be swallowed up by housing developments.

A spokesman said: “The planning laws at the moment restrict what can be done with farmland – it’s unlikely that vast swathes of houses will appear over our fertile and productive acres.

“But it could be having an impact on existing and would-be farmers wanting to buy land locally.

“The taxation benefits of putting money into farmland are currently attractive, but having buyers with large bank balances isn’t always good for the land market.

“Some will have no intention of farming, and by bidding against local producers they will drive up the price of agricultltural land, putting it out of reach of businesses wanting to expand or for young farmers looking for their first rung on the farming ladder.”

Brown & Co, which provides agency, professional and consultancy services across the whole range of rural, commercial and residential property, agriculture and the environment in East Anglia, said the trend to non-farming buyers is in stark contrast to the previous year when 64 per cent of all land transactions involved a neighbouring farmer buyer after they were pushed out of the agricultural land market in 2006 to 2008 due to dramatic land value increases.

But in 2011, this figure dropped to just 50 per cent of transactions, with investors/non-farmers being involved in 44 per cent of purchases, up from 31 per cent in 2010.

The figures also showed that land in Lincolnshire is the most sought after, with half of all transactions handled by Brown and Co being for land in the county.

But the NFU said there could also be a positive side to the trend.

The spokesman said: “New investment into farming can provide opportunities for contractors or for contract farming operations to add to their businesses.

“No doubt the picture will change again and perhaps the pendulum will swing the other way once more, should the taxation situation change or the amount of available non-farming money reduce.”