single payments 2013/land prices

amacca

Apologies if what I type is uninformed at best (or answered before) but just wondering if anyone in farming here could correct me if I'm wrong and possibly help me out with my query.

O.K. so

a) some farmers if they were farming in the past (a certain part of it 2000 and something) receive a payment which comes from the eu based on how productive they were during this period?

b) this payment in its current form is only guaranteed until 2013

my questions (if the above is broadly correct) are

1) do the payments run out in 2013?

2) will they be replaced by equal or lesser supports....i find it hard to believe eu would remove support/subsidies suddenly...whipping the rug from under an industry like that would be detrimental no? couldn't do it suddenly as it would surely cause damage.

3) if two cant be answered at this stage, anyone have any informed opinions what might be likely to happen?

4) if supports are withdrawn or ceased altogether, would this not drastically reduce the value of agricultural land?

5) can younger farmers starting off not get the same supports as established farmers?


my reason for asking is purely selfish, was thinking of buying a small amount of land but find the prices (10k -12k per acre) hard to believe given how little return a small farmer would get per acre...seems like you'd need a lot of ground to earn much so cant understand small plots going at these levels given it doesn't even seem to be a 3-4% return on your investment over even the very long term. but confused as land surely not changing hands at these levels for pseudo development potential reasons (dead duck now)


so wondering would it be wiser to wait a couple of years to see if ag land returns to a more realistic price level (or am I not seeing the big picture).

heard a farmer bitching the other day that the right price of good land should be about 5k per acre or less but its much more expensive because rich people* throwing money at it.

*he used a much less polite term

supersean1999

i think its november there is some sort of word about the new terms, id imagine there will probably be a reduced limit on it, which would make sense, but we can only wait and see, as for land prices they are dropping all the time you could long term rent etc,

amacca

Tks for reply, was beginning to think 69 views and no replies was down to something I said:)

where would be the best place to look for information/analysis of announcement in November?....farmers journal? or would there be something better?

if it is reduced terms, do you think will this put downward pressure on ag land..or is this a long term (10-15yrs) or very long term (20-40yrs) time horizon.......or is it a case of supply and demand here with demand still outstripping suplly?

JohnBoy

This is how I understand it at least.

a) Farmers receive a payment, based on the level of subsidies they were claiming during the reference years of 2000-2002

b) correct

1) nobody really knows what's going to happen yet. but it's unlikely they'll go up.

2) unlikely to be completely removed, but will probably be reduced.

3) the EU doesnt know what's happening yet so any informed opinions are just conjecture to be honest

4) you would think so, but to be honest the value of farmland in this country seems to have little to do with it's earning potential

5) no, there is a mechanism to get a payment, called the national reserve, but its capped at €5,000

Shauny2010

amacca wrote: »

my reason for asking is purely selfish, was thinking of buying a small amount of land but find the prices (10k -12k per acre) hard to believe given how little return a small farmer would get per acre...

*he used a much less polite term

At the moment there's a big difference between the asking price and what they are getting for land. I done a deal on 10 acres just a few weeks ago. Auctioneers were looking for 65K I gave 25K

adne

Shauny2010 wrote: »

At the moment there's a big difference between the asking price and what they are getting for land. I done a deal on 10 acres just a few weeks ago. Auctioneers were looking for 65K I gave 25K

10 acres for 25 K sounds massive value.. where in the country are you based. I am looking at 8 acres / 6 of it excellent quality, 2 of it around a swamp... I was thinking if i got it at 40K i would do well

Dozer1

Totally agree with Shauny2010, the actual price of land deals is much lower than the asking price. 16 acres for sale near me and they are looking for 180,000, totally unresonable as its heavy muddy land that would need draining and reseeding.

Of course it has the classic "road frontage" but behind 30 feet behind the
ditch is a river so getting planning in there will never be possible.
Besides who wants road frontage now?

its a developer who paid over the odds for it 4 years ago and now the banks are putting on the pressure him to sell it.

Shauny2010

West Clare, No 25K is more than enough for it, by the time I open a few drains, do a bit of fencing and pay the solicitor it`ll add 4-5k onto the price and I`ll still have to pick my steps through parts of it!!!
I had the money up front so as the saying goes "Cash is King" no need to run into the Bank with a telephone book of documentation for them this helped the sale big time
As for the Big Money "Sites and road frontage land" everyone has had there stomach full of that for one generation!!!

Toplink

Shauny2010 wrote: »

West Clare, No 25K is more than enough for it, by the time I open a few drains, do a bit of fencing and pay the solicitor it`ll add 4-5k onto the price and I`ll still have to pick my steps through parts of it!!!
I had the money up front so as the saying goes "Cash is King" no need to run into the Bank with a telephone book of documentation for them this helped the sale big time
As for the Big Money "Sites and road frontage land" everyone has had there stomach full of that for one generation!!!

There is 2 acres of average quality grazing land beside me with "Development potential" as in (Road frontage). It has a 40K asking price...

I know for a fact 15K will buy it. Even at that I think its too much. Though its adjacent to my house... thinking of offering 12K and see what happens.

South Galway.

amacca

hmm tks for replies so far folks, its been interesting for me to read them.

out of curiosity what would ye pay per acre for decent grazing land (dry, fairly level, good soil, not tillage) with some *classic* road frontage. say a plot of around 15acres.

dont really want to build a house but presume you will have to pay something for the potential to do it in the future and personally would rather something that had this potential as it may be easier to sell in the future if I had to.