Single Payment to trigger decisions

Certainties are often few and far between, especially when it comes to predictions for the year ahead.

So what can UK Farming plc look forward to in 2006? Some agents reckon the land market will see an upturn as producers receive their first Single Payment receipts, bringing substance rather than months of speculation over payouts to be received.

And not before time, it is argued. As with any major change in fiscal arrangements, whether at government, business partnership or personal level, the impact can be immediate and long-lasting.

Agents suggest more farm businesses will, after payments are received, make long-awaited decisions over the release or acquisition of surplus or additional acres.

Certainly, a weekly review of Marketplace’s Farms for sale and Land wanted sections will give the casual observer a flavour of supply and demand both in sale and rental arenas.

As Farmers Weekly reported in its year-end round-up, interest and prices during 2005 were strong aided, as expected, by a limit supply of farmland for prospective purchasers to peruse.

The land market may well benefit in other ways in 2006.

The receipt of Single Payments – expected in March – will trigger the opening of a new market for the trading of entitlements.

Agents acknowledge this should establish quickly a market value for the new regime of farm supports – a trigger for some business decision makers, it’s reckoned.

Until then speculation over entitlement values on an open market is just that – speculation.

One quota/entitlement broker suggests that in reality only those units that accumulated sizeable entitlements based on historical subsidy receipts will attract serious farming and non-farming interest.

Only time will tell.

Not everyone will be fired up by the extra noise entitlements and their trading will create.

“The problem with the future is it’s just one damn thing after another” and, if you’re a sympathiser to this dictum – attributed by some to Winston Churchill – then the new year will merely be an extension of opportunities and concerns felt over the past 12 months.

The only certainty for predictions for 2006 is the continued need to find solutions to make farm businesses viable – whether through the acquisition of extra acres, evaluating existing enterprises and assets or releasing real estate.