GOOD FARMS
GOOD FARMS
TO BE HAD
As our piece (Land, Mar 26)
explained, there are still
good farms to be had in
Hungary and Poland. In fact
FPD Savills will be running
study tours to the two
countries in May and June
WITH UK prices of most commodities on the floor and land prices still relatively high, now may not seem like a good time to be expanding your acreage in the UK.
But there is still scope for investing in large scale farming in what used to be the Eastern Bloc countries.
The first rush of land acquisition after the fall of communism may be over, says FPD Savills, but that doesnt mean the supply of available farms has run out.
In fact, a second wave of good quality farms are coming on the market, most of them from Hungarian or Polish nationals who either leased or bought land in the heady days of the early 90s. They now either wish to take a profit or have insufficient capital to finance their businesses in the long term, initially having secured finance in the form of preferential credits. In Poland, some farms that were held back from the original privatisation process are currently being privatised by the state.
Moreover, the advantages of farming in central and eastern Europe still stand. Though yields are lower, labour and land are cheaper, than in the UK and so are variable costs. There is no area aid, of course, Poland is keen to attract investment in freehold agriculture land and offers a preferential credit system whereby buyers can put 17% of the cost down now and the rest over a seven year period at below inflation interest rates. Foreigners, however, do need a Polish partner to buy land, although not to lease farms which the bulk of them have done. In Hungary the few companies which own land and which foreigners are permitted to buy are generally more available, as are the good lease hold farms.
With UK farmers rather more cash strapped than they were three or four years ago, much of the British interest in investing will inevitably come from groups of farmers forming consortiums rather than from a single producer.
With that in mind, FPD Savills is organising study tours for potential investors to Poland in May and Hungary in June. The tours will include visits to farms run already run by foreigners, processing facilities, the suppliers and obviously a look at farms that are on the market. Details available from Henry Wilkes 01223-347235.
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