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gruffydd

Major problem with land prices - agriculture in turmoil?

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Been speaking to quite a few agricultural land agents this week - big wobbles in land market - worst place is N Ireland (overpriced anyway for what is typically awful land). Brexit could seriously hit land prices, I suspect. If there are big problems already, where will be in 2 years, or when tariffs come into play? 

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1 hour ago, gruffydd said:

Brexit could seriously hit land prices, I suspect.

This seems quite likely to me also.

There's not just the possibility of (WTO most favoured nation) tariffs* for agricultural landowners to worry about (which may or may not apply, depending on what is negotiated around transitional and future trading relationships under the Article 50 process); but also whether or not the Common Agricultural Policy payments that they currently receive will be continued, modified, or abolished (this is not just a question of inclination or means on the part of the UK government, AIUI, but also on the outcome of negotiations over our independent schedules with the rest of the World Trade Organisation); and in Northern Ireland's case specifically what the arrangements will be for farms that physically straddle the border with the Republic of Ireland or which depend entirely on processing and distribution facilities located inside the Republic of Ireland?

*

FrW6gezt.jpg

Source

Edited by Neverwhere

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2 hours ago, Neverwhere said:

This seems quite likely to me also.

There's not just the possibility of (WTO most favoured nation) tariffs* for agricultural landowners to worry about (which may or may not apply, depending on what is negotiated around transitional and future trading relationships under the Article 50 process); but also whether or not the Common Agricultural Policy payments that they currently receive will be continued, modified, or abolished (this is not just a question of inclination or means on the part of the UK government, AIUI, but also on the outcome of negotiations over our independent schedules with the rest of the World Trade Organisation); and in Northern Ireland's case specifically what the arrangements will be for farms that physically straddle the border with the Republic of Ireland or which depend entirely on processing and distribution facilities located inside the Republic of Ireland?

*

FrW6gezt.jpg

Source

It also shows how protected our farmers have been form the likes ofNZ and South America.

And those fcktards voted for Out. Stupid is as stupid does ...

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So after Brexit what duty would a british shopper have to pay for those categories of beef imported from other countries? 

I'm not really interested in what a French restaurant, presumably in France, would have to pay.

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12 hours ago, spyguy said:

It also shows how protected our farmers have been form the likes ofNZ and South America.

And those fcktards voted for Out. Stupid is as stupid does ...

Some tenant farmers might have felt the chance at ending CAP payments to landowners and bringing agricultural land prices down to an affordable level for agricultural incomes was worth the risk, on the gamble that tariffs and disruption would be short-lived and they could weather the resulting few years of turmoil; or that when politicians from Vote Leave claimed that whatever happened we weren't going to be leaving the single market they actually meant it?

If so it's looking a high risk gamble. The impact on this particular section of the economy could be very severe indeed, depending on the outcome of negotiations.

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10 minutes ago, Neverwhere said:

Some tenant farmers might have felt the chance at ending CAP payments to landowners and bringing agricultural land prices down to an affordable level for agricultural incomes was worth the risk, on the gamble that tariffs and disruption would be short-lived and they could weather the resulting few years of turmoil; or that when politicians from Vote Leave claimed that whatever happened we weren't going to be leaving the single market they actually meant it?

If so it's looking a high risk gamble. The impact on this particular section of the economy could be very severe indeed, depending on the outcome of negotiations.

CAP fcks non asset owners up.

But also subs there inefficient jobs.

I always argu that Defra needs merging with dhss. Farmers can go and sign on with the rest of the doleys. Ch5 can do a series - Benefit farmhouse.

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41 minutes ago, spyguy said:

CAP fcks non asset owners up.

But also subs there inefficient jobs.

I suspect that whatever portion of financial yield derived from holding (not farming) agricultural land is currently dependent on CAP payments (either directly going to the landowner or being siphoned off in rent from the tenant farmer) is not sustainable without CAP payments, and that (in the case of tenant farmers specifically) it's not the tenant farmers' jobs which are being subsidised but the landowners' rents.

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33 minutes ago, Inoperational Bumblebee said:

Does this mean I'll finally be able to buy my field at a sensible price?

Quite possibly. I'm not sure that parcels of land as small as a single field are generally traded very much for continued agricultural use though (a farmer might sell off a single field for development, etc, but it seems unlikely that many other farmers would be amongst the potential buyers competing to acquire it) so you might find that price movements for a single field tracked more closely to residential land prices than to agricultural land prices (speculating wildly ;)).

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14 minutes ago, Neverwhere said:

I suspect that whatever portion of financial yield derived from holding (not farming) agricultural land is currently dependent on CAP payments (either directly going to the landowner or being siphoned off in rent from the tenant farmer) is not sustainable without CAP payments, and that (in the case of tenant farmers specifically) it's not the tenant farmers' jobs which are being subsidised but the landowners' rents.

Most tenant farmers i know - and i know a fair few- are on tax credits.

Uk tax payer subs the land owner, then subs the farmer.

Fcked isnt it.

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3 minutes ago, spyguy said:

Most tenant farmers i know - and i know a fair few- are on tax credits.

Uk tax payer subs the land owner, then subs the farmer.

Fcked isnt it.

That is pretty messed up.

If that's already the situation then I can't imagine the industry will be able to cope well with the introduction of tariffs, even for a limited time period, especially if the UK were not to replicate them in full for imports competing in the domestic market (all of this is of course up in the air and undecided as yet).

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12 hours ago, Inoperational Bumblebee said:

Morrisons sell it pre-packed. We love it for stir fry cut across the grain.

Cheers, will ask the butcher next time I pop in.th?id=OIP.yf7Jnp8NnACcpw8vyzOenAAeAe&w=2

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22 hours ago, Neverwhere said:

Some tenant farmers might have felt the chance at ending CAP payments to landowners and bringing agricultural land prices down to an affordable level for agricultural incomes was worth the risk, on the gamble that tariffs and disruption would be short-lived and they could weather the resulting few years of turmoil; or that when politicians from Vote Leave claimed that whatever happened we weren't going to be leaving the single market they actually meant it?

If so it's looking a high risk gamble. The impact on this particular section of the economy could be very severe indeed, depending on the outcome of negotiations.

Also UK (rightly) insist on animal welfare practices that are not enforced in EU, yet by being in the EU the U.K. Is not allowed to demand the same/stop the cheaper less welfare focused imports. Hence why Danish bacon is cheaper and the UK producer struggles to compete.

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15 hours ago, PopGun said:

Also UK (rightly) insist on animal welfare practices that are not enforced in EU, yet by being in the EU the U.K. Is not allowed to demand the same/stop the cheaper less welfare focused imports. Hence why Danish bacon is cheaper and the UK producer struggles to compete.

The same will likely be true under any FTA, both with the EU and significantly lower standard countries (US, etc).

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6 hours ago, Neverwhere said:

The same will likely be true under any FTA, both with the EU and significantly lower standard countries (US, etc).

It's nuts utter nuts

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From the LSE:

Quote

Britain’s farmers get £3bn a year from the inefficient CAP. That has to change

From the public interest perspective, there is much to gain. The CAP pays the bulk of the subsidies as a payment for owning land (called Pillar I). The economic effects of Pillar I subsidies are obvious: increasing the revenues per hectare raises the price of a hectare. Land prices capitalise the subsidies, creating barriers to entry. As a result, the CAP has also now established a fund to help young farmers get into the industry, in the face of the obstacles the CAP itself creates. The rest of the subsidy goes on rural development and environmental schemes (called Pillar II). These are often poorly designed.

More at the link.

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