Survey: Farmers willing to pay €90/ac more for adjacent land

Farmers are prepared to pay €221/ha (€89.50/ac) more for land adjacent to the farmyard compared to 1km away, according to a recent survey on farmers’ land rental preferences.

In addition, producers are willing to pay €155/ha more for adjacent land compared to land 5km away.

Interestingly, farmers are prepared to pay €66 more for land 5km away compared with land 1km away, the same survey report notes.

The survey was conducted in a joint research study between Teagasc and NUI Galway, focusing on rental preferences in Irish farmland markets – looking at four key attributes that impact farmer choices, namely: type of land access; distance of land from farmyard; the soil quality of the land; and the rental price of the land.

The sample frame for the study consisted of Irish farmers in 2014 and 2015. A total of 846 farmers were surveyed across the 26 counties of the Republic of Ireland.

Of these, 425 farmers took the survey containing the ‘Rent In’ version of the choice experiment while 421 took the ‘Rent Out’ version.

There was also a significant preference for leasing land rather than renting under the conacre system.

Farmers are willing to pay €123/ha (€49.80/ha) more for a long-term lease of at least five years compared to an 11-month conacre contract.

Farmers prefer land adjacent to their farmyard compared to land further away. A significant preference is found for good soils over poor soils.

Farmers are willing to pay €251/ha (€101.60/ha) more for land with good quality soil compared to land with soil of poor quality.

Renting out

Similar to the ‘Rent In’ model, farmers prefer to rent out land through a long-term lease compared to a short-term conacre contract.

Farmers would require €648/ha (€262/ac) more to accept a conacre contract over a lease agreement.

Farmers prefer to rent out land that is further away from their farmyard, requiring €445/ha (€180/ac) more to rent out adjacent land over land 5km away and €314 (€127/ac) more to rent out land 1km away compared to 5km away.

Farmers also prefer to hold on to better quality land compared to land with poor soil.

Farmers require €495 (€200/ac) more to rent out good land compared to land with poor quality soil, and €576 (€240) more to rent out medium quality land compared to land with a poor soil type.

The results of the models revealed that farmers have a preference for long-term lease rental contracts over short-term conacre contracts in both the ‘Rent In’ and ‘Rent Out’ choice experiments.

This shows a greater appetite for long-term leasing among Irish farmers than the current dominance of conacre rental would suggest.

The researchers highlighted that, although many farmers were open to land transactions, nearly 68% of choices in each choice experiment were for the ‘status quo’ option of farmers not changing their current land holdings.

Given the significant cultural attachment to agricultural land in Ireland, it may be the case that there are a large number of farmers who would never transact land at any realistic price, the researchers concluded.