Farmers' hold on land lasts beyond the grave

Stock picture. Damien Eagers / INM
Stock picture. Damien Eagers / INM
Ciaran Moran

Ciaran Moran

The most active class of land sellers are executors or others making probate sales, according to a new report.

The Annual SCSI/Teagasc Agricultural Land Market Review and Outlook Report 2019 found that most agricultural land is still held until death - unlike other businesses - and farmers do not tend to sell up their businesses when they retire.

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"One of those conversations that rarely take place around the farm family table is the will, and next-generation planning is left until very late in the day," said Edward McAuley, head of practice and policy with the SCSI.

"This is a huge challenge if we are to further professionalise the sector and increase productivity and sustainability of the farming. Those type of conversations need to take place at a far earlier stage."

The report also found that 94pc of auctioneers have noted that those who had inherited land but have no desire to farm it are active in the land sales market.

People with little interest in farming inheriting and then selling land was particularly a feature of the market in Connacht/Ulster, with 36pc of auctioneers saying the category was "very active" last year.

The report found the Connacht/Ulster market was particularly busy in terms of land sales, with 60pc of auctioneers reporting a higher volume of land sold in the region.

Mr McAuley said the high level of activity in Connacht/Ulster may be explained by the fact there are larger areas of disadvantaged land and associated challenges in terms of margins and income levels.

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"There may be a tendency for the next generation to move off the land, compared to other areas in Munster and Leinster areas," he said.

The survey found that the land market in Ireland saw increases in values, on average, of 12pc in the past 12 months, with long-term leasing becoming more prevalent, particularly for younger entrants to agriculture.

However, Mr McAuley noted that the price rise is set against a backdrop of tightening supply.

"That is a cultural issue, only 2-3pc of the volume of land in the state gets transacted annually," he said.

"It's a constant challenge for younger farmers and new entrants to get access to land," he explained.

Mr McAuley added that succession planning in agriculture requires a lot more work because farmers are less inclined to have a business plan in place for succession.

Land market

Per-acre land values in Leinster were the highest at €10,946 on average, followed by Munster at €9,373 and Connacht/Ulster at €6,696.

There were slight increases in the rent per acre paid for grass, both for grazing and preservation, in all areas of the country.

The value of land to rent for cereal crops increased slightly in Connacht/Ulster, decreased in Munster and was virtually unchanged in Leinster. The price of land to rent for potatoes fell to €230/ac in Munster and €352 in Leinster, falls of 22pc and 17pc respectively.

The survey found that in all three regions, dairy farmers were expected by auctioneers to be the category of farmer most likely to be seeking to buy and rent farmland in 2019.

Auctioneer Dillon Murtagh of Murtagh Brothers, Mullingar said in the report that "the land market is becoming a two-tier market depending on whether the land is for dairy or drystock".

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