Young farmer incentives under the latest CAP reform have seen the land rental market increase in recent months with rental prices as high as €300/ac being paid in parts of the country.
According to Clonmel-based Auctioneer Pat Quirke, the new young farmer policies are certainly driving the trade in his area.
Particularly for cases of ‘fresh land’ or new leases, he said.
“In these situations we have done five-to-seven-year lease deals in the region of €300/ac.
“Were existing land rental relationships are in place while the market has hardened it hasn’t been to the same degree, with deals in the region of €180-200,” he said.
However, Quirke said where there are young farmers or new entrants and ‘fresh land’ in an area there is intense competition which is driving the market.
Quirke also said that he has seen less then 10% of existing conacre land has switched over to land leasing to take advantage of recent tax incentives in the Budget.
“A lot of existing conacre deals would be smaller plots and tax bills in these situations wound be small in any event.”
Market not as strong as expected in Kilkenny
While the land rental market is strong in the Kilkenny area prices are not as high as some had predicted, according to Castlecomer-based auctioneer Joe Coogan.
“Four weeks ago, I would have said land prices around this area would go through the roof. There was huge excitement some weeks ago on the back of the new young farmer announcements with a lot of interest in five-to-10-year, long-term leases.
“However, as the weeks have past the interest has died off again,” he said.
Coogan did say he had recently completed a long-term lease deal with a young farmer with the price set at €295/ac.
According to Coogan, the level of interest among land owners in long term leasing hasn’t been that high.
“People like tying themselves down to a long-term lease for five or six years,” he said.
Young farmers driving trade in Roscommon (But huge uncertainty)
New young farmer reforms are having an impact on the rental land trade in Roscommon, according to Roscommon-based auctioneer John Early.
However, he said there remains a lot of uncertainty in the market over the implementation of the in Scheme.
“The land that young farmers are looking for is quite specific, it needs to be ‘fresh land’ or ‘naked acres’ that doesn’t have entitlements on it currently,” he said.
According to Early, there is a certain amount of this land available, but not a lot in his area. Should plots of this type come to the market, he says, the price would range from €200-250/ac in the current market.
However, he said much depends on the quality of the land and the associated facilitates it has in terms of sheds and handling equipment.
Early also said that there has been huge interest in long term leasing in his area and said he is working closely with both parties in securing agreements.
Up to the farmers to decide value of land – Department
The Department of Agriculture has said the thrust of the recent CAP reform is to encourage young farmers into the farming sector as the age profile of farmers had increased in recent years.
It says providing they comply with the terms and conditions to apply for the National Reserve, it is a matter for young farmers themselves to decide the value of land that’s available for rent.
One farmer, who asked to remain unidentified, has told Agriland that young farmers taking advantage of the CAP benefits are driving the price of leased land through the roof.
He said in some areas well in excess of €300/acre being paid for mediocre land as young farmers try to secure rented land for National Reserve applications.
However, he says this is effectively putting the National Reserve and young farmer top up in the pockets of retired farmers.
“This is an unintended consequence of a policy to get more young blood into farming and may well create a very debt ridden generation of farmers,” he said.