Wells farmers under threat of being priced out of the market?
By WellieWonka | Friday, June 29, 2012, 14:29
A report today in the Western Daily Press suggested that West Country farmland is a better investment than a Mayfair apartment.
Wells farmers advised to stake claim to local land
Leading economists have announced that the value of farmland is set to increase by 37% by 2016. This level of return far outstrips that of gold, oil or property in London's more desirable areas.
While this is exciting news for landowners around Wells, the concern expressed by West Country farmers is that young farmers will not be able to get into the industry.
The projected value increase is being driven by growth in the global demand for food as well as being a covert means to shield wealth and avoid tax. Savills director Alex Lawson said: "Diets in developing countries increasingly include items common in the West such as bread and potatoes, which will further boost the value of British farmland where such crops are grown."
Ian Johnson, South West spokesman for the National Farmers' Union, said the issue was serious for younger farmers. It is good news for established farmers with land who have tangible assets they will hopefully be able to borrow against to invest in their business.
"But the problem is that when the price of land goes up like this, the amount needed to borrow to buy it is far more than one would ever make from farming it in the same year. So effectively, the only people who can buy land are the ones doing so as an investment, with no interest in farming it themselves.
"To maintain the level of food production in this country, we're going to need another 60,000 people to come into farming in the next ten years, and if the price of land is soaring they are going to find that difficult."
The value of the land will only continue to increase we must assume if it is turned over to crops and thus fulfils the market driving the process. So, as long as young farmers entering the industry are prepared to work rented land from the investors the problem may not be insurmountable.
Some Wells farmers may argue that this may make it easier not harder for new generations to carry on the farming tradition.