Substantial fall in let land values predicted
22/02/05

Grass let values will sink this spring and landlords who have unrealistic expectations for temporary rent prices will be disappointed

So says the National Beef Association which maintains that predictions of a substantial fall in land occupation costs now that coupled subsidies are history will soon be confirmed.

"Owners are resisting this but would-be occupiers will find that the disappearance of livestock extensification claims and BSP driven forage acres will remove thousands of bidders from the market because compulsory low stocking rates are no longer with us," said NBA chief executive, Robert Forster.

"More will be known in three weeks time but our current view is that landlords in areas where there is both a high proportion of permanent pasture and beef cattle will struggle to get all their previous lets rented - although values in intensive dairy areas, or where cereal farmers are looking for new set-aside land, may be slower to respond."

According to the NBA some landlords have spotted the way the wind is blowing and are trying to tie grass let tenants down to longer agreements before the full extent of price reductions becomes apparent.

While others are ignoring the ability of previous occupiers to stack historic payments and are doing their best to persuade farmers who are still interested that prices will not fall as much as some specialists have predicted.

"One example of this is an attempt in England to persuade occupiers to accept reductions of only £7-£8 per acre, which is the equivalent of the transfer over 2005 from historic to flat rate payment, and there is evidence of similar efforts to soften the true impact of decoupling elsewhere in the UK," said Mr Forster

"However the truth is that less farmers will be interested in taking on additional lets and there could be more such land on the market too."

"We have also had confirmed reports of negative rents being offered to beef farmers taking over GAEC management on behalf of owners who cannot be bothered with stock but still want to quality for SFP."

"Once again these are appearing first in livestock areas where there is a high proportion of permanent pasture and long leys. Initial indications are that the occupier can be paid something like £5-£6 an acre but there are instances where a similar sum is being paid by them to the landowner instead," Mr Forster added.