Who controls Ireland’s farmland? Is it farmers themselves, NGOs or the State through its many arms and arteries? I ask this because two big developments have come to light in recent days.

The first is the report published by the EPA into the role of private finance to fund nature restoration on farms. The second is news that the State is considering radical new restrictions on the purchase of land by non-farmers.

The EPA report looks at the role private finance (investors and banks) can play in funding nature projects on farmland. To be fair to the EPA, it is not a policy document, but rather a report designed to inform the policy debate. Nonetheless, it is an insight to a line of thought that could have far reaching implications.

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To summarise the recommendations, it calls for the State to fast-track the roll-out of private finance to move land out of agriculture and into forestry, rewetting and rewilding.

It calls for a national credits scheme to be introduced incorporating both carbon credits and nature or biodiversity credits into a national standard which has a value and can be traded. Presumably, this will be the hook for investors to fund nature restoration projects. It doesn’t suggest farmers will own the credits.

Another big recommendation is for the State to support intermediaries to bring funders, project managers and landowners together. While the report was commissioned by the EPA, it was written by KPMG.

Future revenue

It’s no surprise that professional service firms will be giddy at the prospect of new State-backed programmes involving complex finance deals and multiple actors. Pulling these projects together could be a nice source of future revenue for the big accountancy and law firms.

The issue I have is that the farmer isn’t mentioned in the report at all. In fact, the report views the challenges around farm succession as an opportunity to move land away from farming and into nature restoration. More opportunities for the likes of Gresham House to make money.

This is a red flag. It exposes the mentality that land is just an asset, as opposed to being a platform that supports rural communities while also producing food through family farms. We don’t need to look too far to see the impacts on rural communities of intensive forestry. Will rewilding or rewetting be any different?

We can look to Scotland to see the impact of private finance for nature-based solutions on farming and rural communities. In a post-COVID land rush by corporates and funds to secure offsetting carbon credits, estates and hill farms in the Highlands tripled in value, becoming totally unaffordable for local farmers.

It triggered the Scottish Parliament to change the Land Reform Act, restricting ownership of large estates and giving local communities more influence over land use in their area. It serves as a salient reminder to Ireland about the unintended consequences of facilitating private capital to be the beneficiaries of environmental good. Which brings us to the other new proposals on restricting land purchase, or more accurately restricting the benefits of land purchase from an inheritance point of view to real farmers.

With land prices in many parts of the country now north of €20,000/acre, I don’t think anybody can argue against the fact that wealth derived from outside farming is driving the increase in land values.

Can anyone support the idea of non-farmers buying land to just transfer wealth in a tax efficient way to the next generation – effectively piggy-backing on hard-fought allowances for real farmers?

Equally, not allowing non-farmers to buy land will have a hugely distorting impact on land prices. If it happened overnight, land prices could halve and that would not be good for the majority.

Similarly, if, say a business person wants to buy land for the love of farming, should the State prevent that? It’s a tricky topic and the Government will need to tread carefully.

*Adam Woods is on annual leave this week