Estates turn to entrepreneurs to save profits

By FWi staff

IN an attempt to reverse the downturn in profits, big estates across the UK are putting farming in the hands of entrepreneurs.

FPDSavills ran a survey of more than 100 estates, confirming that more in-hand land is being put out to contractors or tenants under farm business tenancies.

Philip Gready, head of Savills southern region, explains that this new breed of entrepreneur “can move freely round the country with most of their equipment on hire-purchase.”

“They will survive the brunt of any new controls from Europe simply because they are not institutional landowners.”

The trend does vary around the UK: Scotland does not have FBTs, and estates in the west prefer to use local contractors over large external businesses.

But the Savills survey – covering 227,000 lowland hectares (560,000 acres) – clearly shows a sharp rise in the number of FBTs which allow landlords to let go of the responsibility of farming, whilst charging higher rents.

Matthew Bush, who organised the survey, said that the amount of agricultural let land subject to FBTs had increased from 4% in 1996 to 19% in 2001.

“We forecast that by 2003, a quarter of all let land on the average estate will be under FBTs.”

“Agriculture is becoming a minority interest on these estates,” said Mr Gready. “About 15 years ago, 80% of estate income would have been from farming: that is now down to 29%.”

The survey found that in 1999 and 2000, the average in-hand farm was losing 30/ha and 17/ha (12/acre and 7/acre), respectively.

By the beginning of this year there was a slight recovery, with average in-hand income rising to a profit of 7/acre.

See more