| 2.7°C Dublin

Credit clamp down continues to hit land sales and lettings

In a bleak New Year assessment of the land situation, Tralee-based auctioneer and agricultural consultant Eddie McQuinn warned that the unavailability of letting land and the complete absence of credit for the purchase of farms was leading to a stagnation not just in the property market but in agriculture in general.

"If something isn't done about the mobility of land and the availability of credit then the whole Harvest 2020 policy, including the hopes of expanding dairying production by 50pc, will come to a shuddering halt," Mr McQuinn said.

"There is no shortage of sellers and buyers in the property market. Before Christmas our land sales were progressing at a steady pace," Mr McQuinn explained.

"While we put up a number of 'sale agreed' signs it is taking forever before we can put up the 'sold' signs. Buyers are putting down deposits but are finding it impossible to get credit to close the sale. Cash is king in the land market at the moment."

Mr McQuinn said land prices in Kerry had settled at around the €10,000/ac mark, a price that he described as realistic and acceptable.

"There is no doubt but buyers and sellers are happy with this kind of money for decent agricultural land but what's the point in having land at the right price if there is no money to buy it?" he said.

"There was a time when the farmers around here would cash in their Kerry shares to give them that extra boost when buying a piece of property but now theses shares are the only asset increasing in value, so a lot of people are minding them. What's more worrying is that quite a number of farmers are cashing in their Kerry shares to replace the overdrafts they can no longer get."

Even more worrying, according to Mr McQuinn, was the complete lack of land available for leasing. "There is a severe shortage of land for leasing thanks to the menu of tax-breaks given to land owners who give long-term leases and also thanks to the regime of entitlements associated even with small parcels of land.

"We are in a situation where there is no movement in leasing. Land that would come on the market in frequent cycles is now tied up in long-term leases, while non-farming landowners who traditionally leased their holdings are now engaged in minimal farming operations in order to reap the entitlements and REPS payments."

Unless there was some intervention to deal with land mobility the implications for the broader agricultural sector could be serious, Mr McQuinn added.

Indo Farming