Farmland debate

Who owns and farms Britain’s farmland and why this matters? Members gathered in London to debate the issue. 

 

Farmland Seminar 2015 

WHO owns land is probably less critical than the attitude of those doing the farming, it emerged at a special Farmers Club seminar held at the national Liberal Club in London in mid-October.

Indeed, maintaining the productive capacity of the land, and the health of its soils in particular, was seen as the greatest priority. So, the surge of a wide range of contract farming agreements, in pursuit of presumed but possibly tenuous farming efficiencies, was felt to be having far more impact than any shift in land ownership per se

Older generations were also heavily criticised, for the severe handbrake they put on farming’s ability to progress. More needed to be done for entrepreneurial younger farmers and new entrants. But Government intervention was eschewed for fear of unintended impacts.

Farm sales such as the Co-op’s Farmcare, and acquisitive expansions like Beeswax Farming, attracted a lot of attention, but just 100,000 acres of the UK’s 43million acre agricultural area are sold each year, noted panel speaker and Savills director Richard Binning. It would take two years for ownership to shift by just 0.5%. In the 1940s land was changing hands at seven times that rate.

Institutions, individuals, utilities and government bodies had long-since taken over from the artistocracy as the primary landowners, he noted, with the split between owner-occupiers and tenants broadly two-thirds to one-thirds, although the former masked a surge in contract farming, which some put as high as 40% in the arable sector, and certainly close to 25%, unlike Defra’s assumed 4%.

Although 26% of holdings accounted for 76% of the farmed area, Mr Binning felt a mix of ownership would best deliver what was required of farmland – namely food, amenity, nature, infrastructure, economic contribution, landscape and energy. Failures by any one class land manager would serve as a catalyst for regulatory change, he noted.

The current system of land ownership stifled progression by discouraging exit, noted panel speaker David Fursdon, chairman of the Future of Farming review, a Crown Estate commissioner, former CLA president and now chairman of James Dyson’s Beeswax Farming – perhaps the most high profile of all the new farming enterprises that have prompted fears to be aired from the popular media and industry watchers.

Few businesses in other industry sectors own the factories they utilise, noted panel speaker Greg Bliss, a tenant farmer in Cambridgeshire and former chairman of the Tenant Farmers Association. Ownership was not seen as essential to productivity. Indeed, rent could serve as a greater driver of innovation than land ownership seen as a long-term capital asset.

If it ain’t bust…

Ownership structures were felt to have a broadly neutral impact on farmland’s outputs, it was felt. A system that wasn’t broke, in a major way, probably didn’t need fixing, it was felt. 

Whether Government might flex the levers of taxation to better stimulate the productivity of farmland, and the rural economy, was a moot point. Indeed, there were repeated calls to be careful what was wished for. The unintended consequences of Government involvement could be painful for all. 

Northumberland farmer Hugh Fell felt CAP payments continued to stifle innovation and argued that their reduction, or removal, would stimulate a restructuring of land ownership that would boost commercial productivity.

George Dunn, of the Tenant Farmers Association, stressed the need for better incentives for landlords and tenants to create long term partnerships, maybe by ending ‘sham’ contract farming agreements, capping the support paid to landowners or Government adjusting the levers of taxation.

Graham Smith, of rural lawyer Roythornes, noted the boost to productivity that had arisen in overseas farming where a more robust system of compensation was introduced for tenants’ improvements.   

Generational inertia 

Generational inertia, whereby farmers refuse to hand over to the next generation, was seen as the greatest bed-blocking brake on farming progress, with too many 25 to 35 year-olds contributing “nothing whatsoever”, merely perpetuating approaches their fathers pursued. 

That could be countered, if fresh thinking were embraced, by adopting technologies like renewable energy production, using agribusiness by-products -, not farm-grown crops -, to slash fertiliser bills by up to 70%, for example, one delegate noted. 

Kent farmer Philip Merricks, who like many farmers in the room had a foot in landlord, owner-occupier and tenant camps, noted that the issue was less about owning land, and more about the ownership of a bundle of rights, which were rapidly being eroded. “The old socialist threat of land being nationalised has been replaced by the nationalisation of what we can do with land. It is the freedom of use that is the issue, not the ownership,” he suggested. 

He also noted that UK farmland ownership had far too much to do with land price, often reflecting non-farming factors, like development potential, rather than its value for agricultural productivity. 

In New Zealand, where such concerns were less, and  the tax and regulatory system less onerous, shared-equity farming agreements were more feasible, noted Nick Tapp, freeing true entrepreneurial spirit from young (under 40 year-old) farmers who had a real financial stake in the business. 

A better system of assessing the productive capacity of the soil was needed, it was felt, maybe like the system now being pursued by the Crown Estate for evaluating soils before and after FBTs. But with farmland continuing to appeal as a multi-purpose asset, it would probably continue to be seen as too much of a store for wealth and too little as a productive asset.

Conclusions

The discussion was good-humoured, wide-ranging, insightful and not always contradictory. It stimulated thought and debate – just what Mr Shaw of The Strand intended when he first proposed a Farmers Club all those years ago.