This is a subscriber-only article
If we assume that a really well run beef or sheep enterprise is able to make an annual net margin of £120/ac (£300/ha) before direct payments are included, it would take around 100 years just to generate the income to cover the current cost of the average acre of land in NI.
On that basis, the current price of land makes absolutely no sense, yet so often over the last 50 years, what seems an astronomical price at the time, actually looks relatively cheap just a decade later.
There are multiple reasons why the price of productive land is so high in NI, and why there is no particular reason to think that the trend will not continue in future years.
Off-farm income
A particular driver is off-farm income, with people looking to exploit tax advantages as they attempt to pass on wealth to the next generation.
There is also an historic attachment to land across Ireland, lack of supply, and a high demand driven by the fact that the average farm size in NI is only around 100ac.
Combined, all these realities are often conveniently forgotten by those green groups who advocate low-input farming as some sort of utopia going forward. Outside of a few large landowners, and those with significant off-farm income, it is quite simply something most farmers cannot afford to do.
But one good thing about the high price of NI land is that it makes the market here unattractive to big companies looking to buy up land, capture carbon and use it to offset their emissions, many of which are often fossil fuel-related.
The trend now being seen in Scotland and Wales where farmers are being priced out by investors is creating a scenario where land is being re-concentrated into the hands of a few. That is not a scenario we want to see happening again on this side of the Irish Sea.
SHARING OPTIONS: