The line often used when congratulating many a new landowner is; ‘it’s expensive the first day you buy it but they’re not making any more of it’. Our Land Report this week shows the 2023 prices, and Paul Mooney details that land price continues to go up where competition is hot. On average, price is holding despite farm margins in 2023 being extremely tight right across the sector.

Are they making any more land? No, the reality of the situation with where EU and Irish policy decisions are going is that actually there is less and less productive land around that is available for food and farming producers.

Urbanisation, rewetting, designations, special areas of conservation, solar farms, low input pastures tied up in five year schemes etc – the list of schemes and initiatives taking land away from productive family farms is endless.

The other fact of the matter is farmers and food producers are allowed use less and less nutrients to drive growth or yield on the land they already have. On top of this, you have large scale landowners and commercial business operations buying up large swathes of land, and family farms just can’t compete on purchase price. Some of this is because it is a life-long dream, some a business investment and some, a tax efficient plan for land transfer.

So, given it’s a dwindling, finite resource, and given the raft of new policy decisions, it is easy to see why land price continues to climb. Higher interest rates and poor profit margins in 2023 have failed to dampen farmer enthusiasm in the east. It shows the resilience of the farming sector.

Investing in nature

Let’s be crystal clear – I and most farmers are positive towards investing in nature and providing rich habitat, but there needs to be more balance. We need a better mix of positive environmental and productive farming policy. We need to be real – if farmers are paying €12,000 an acre for land, they need to get a return on that investment.

They need to be able to sell produce, or else get rewarded for the nature they are investing in for a public good. They also need to be able to do this with some certainty for the future – the Nature Restoration Law and Nitrates rules are anything but clear.

As IFA president Francie Gorman alludes to on page 12, we know State land can perhaps take up our rewetting obligations to 2030, but after that we don’t know. The same with the Nitrates Directive – we know farmers can stock land to 220kgN/ha up to the end of 2025.

After that, however, farmers are in the dark on what will happen. Will it fall to 200kgN/ha or 170kgN/ha? Already the move from 250kgN/ha to 220kgN/ha has effectively imposed a 12% reduction in the allowed stocking rate. Put on top of this a raft of 38 new Nitrates rules, including higher nutrients produced per cow, and very soon the number of stock you can have on-farm reduces significantly.

If you were to go to any rural petrol station, grocery shop, or garden centre and tell them to cut sales by 12% while costs of production are rising by 30%, on top of additional regulation, you wouldn’t be long about putting them out of business.

So what can farmers considering buying land do? Be very clear on the business case. Be very conservative on stock numbers given the uncertainty. Be very clear that senseless investment could put you out of business.

Be very clear that leased land is just that – and not permanently owned. Be very clear that paying over €20,000 per acre for land that is going to be limited in what you can produce from it needs careful planning.

What can Government and policymakers do? Farmers badly need some certainty in terms of policy and allowed stocking rates. How can they expect any reasonable family farm business to invest in land and on-farm unless they bring some clarity and future vision to the table.

We already have the nonsensical situation of many family farms putting themselves under significant financial pressure leasing unwanted land to try and stay ahead of policy and futureproof their business. We don’t need farmers with expensive land that they can’t pay for.