19 July 2002

First six months sees figures double

ALMOST 125,000 acres of farmland were put on the market in the first six months of 2002, double the volume seen during the equivalent period last year.

But the figures, produced by national agent FPDSavills, show that across the country levels of availability are still well below the pre-foot-and-mouth three-year average (see graph). Scotland in particular has some way to go before catching up – 30,000 acres have been launched since January, 35% lower than the usual figure.

The east of England, however, has bucked the trend. Between 1998 and 2000, 14,700 acres were put up for disposal in the first half of the year. So far this year, 22,000 acres have already hit the market, with two-thirds of that coming in May and June.

Cambridgeshire has offered the lions share of the soil,with over 9000 acres up for grabs – a massive increase on lastseason when under 2000 acres were brought forward. Suffolk, up by 57%, and Norfolk with a 41% boost have also seen big increases.

These figures are significant because the predominantly arable-based land market in the Eastern Counties was not hit that hard by F&M. The total volume supplied only slipped by one fifth compared with the previous three years – suggesting that the extra land availability is due to factors other than the market returning to its normal level.

"There is a myriad of reasons," reckons the firms Christopher Miles, although he confirms a number of vendors are selling now because of worries that commercial land values will fall on the back of continued low arable profitability.

But so far this is yet to happen. According to researcher Ian Bailey, prices for all types of UK farmland fell by less than 0.5%, to £1760/acre, while values for prime arable land in the east remained static at £2500.

But Mr Miles says the balance between supply and demand in the region is on a knife edge and much of the land launched recently is yet to sell. "It will be a very interesting second half of the year." The uncertainty generated by the mid-term review of Agenda 2000 is unlikely to help confidence, he adds.

If adopted, the proposals will limit total subsidy payments to k300,000/farm (£193,500/farm). This means producers over a threshold of about 2000 acres will have to restructure their businesses if they wish to expand and the purchase of more land may become a less attractive option. &#42