Report shows big fall in Scots acreage on offer
By Louise Rose
IN Scotland the volume of land advertised to the end of August 1995 was down 43% on 1990, according to a recent Savills report.
"Continuing to benefit from the CAP reforms, fewer farmers are currently forced to sell up for financial reasons," says Alison Bell of Savills Brechin office. "Also an increasing number of land deals are now done privately, which affects the acreage publicly marketed."
Although the number of arable units advertised has remained fairly constant over the past five years, only 17% of the units advertised to Aug 31, 1995, were over 400 acres. The report suggests it is the smaller farms which are under pressure and struggling to achieve economies of scale.
"There is no doubt that future profitability will relate to scale, with both acreage and stocking rates being critical," says Savills.
This year in the dairy sector some farmers based in the west of Scotland have taken advantage of the current high milk quota prices, marketed their farms and moved east to an arable unit. Others are continuing to enjoy the security of a monthly milk cheque but relocating to another dairy unit. Although the most common farm type in Scotland, the volume of mixed and stock farms marketed so far this year has nearly halved since 1990. "Initial fears over the CAP reforms have disappeared and most farmers remain confident that subsidies and, therefore, profitability will continue beyond 2000," says the report.
It also maintains that "cash rich" farmers looking to expand after two good cereal and potato harvests are buying some of the smaller units available.
But a two-tier farmland market is emerging. Good quality and well located farms often sell above the guide price, although secondary type holdings require careful marketing and realistic pricing. Also land eligible for arable area aid can achieve between £500-£800/acre more than non-eligible land.
Renewed interest in Scotland has come from south of the border, as the perception that land in Scotland is better value for money has returned, and Northern Ireland, where land can make up to £6000/acre. Although Scots with rollover funds are difficult to beat, says the report.
Savills expect the volume of land marketed to rise next year as the current high prices outweigh the alternatives of letting or contract farming land on retirement.
The number of farms marketed in lots during 1995 has not been significantly different to past years, although any off-lying farmland is often split up to attract the neighbouring farmer. *
Farmland advertised for sale to Aug 31, 1990-1995
Source: Savills Research