Future in farming

kowtow · 08-11-2015 11:15AM

Timmaay wrote: »

Hmmm depends on valued at against what?

Paper money.

If you purely consider its economic return potential, ie farm use, then yes, at say 10k an acre it's horribly horrible overvalued, but you consider it in the light of say a precious metal like gold etc, simple as is land in Ireland, that is perfect for "low cost" grass based dairying/beef etc, this is a very limited commodity and no more of it can be produced, and moving forward, if we all continue to have this gra for the land then we'll happily pay a premium for the land over it's pure agricultural economic value. And throw in one or two external factors like the ability to flog off a few sites if necessary, selling some development land etc, then yes, land is worth what it is worth today and probably won't drop hugely.

I think there is a lot of pragmatic truth in that, or at least there has been up until now. We're a young nation yet, and whether lax and sometimes non-existent planning controls can continue to provide a safety blanket for the children & grandchildren of the "we never lost money on land" generation I just don't know...

there have been plenty of times in history all over the world where agricultural land has lost value sharply, the last of which was probably the 1930's -

If we are to assume that a big chunk of the value of land is amenity value beyond any economic rationale, then is it also fair to say that the OP needs twice as much of it as he(?) has to sustain a moderate standard of living?

Markcheese · 08-11-2015 02:09PM

visatorro wrote:

Friend of the better half lives in mayo. married four kids. 100 acres. five acre garden. all veg grown and eaten. bee hive, honey goes on everything. the husband goes out on clew bay most evening for mackerel for breakfast. he plays a bit of didily aye in the pub for tourists at night for " diesel money ". have heaps of chickens. eggs a plenty and always a chicken hanging. no tv in the house. of the 100 acres 35 is in forestry and mountain ewes on most of the rest of it. obviously don't know how much sfp they get. she is a school teacher. have to say they are happy and lead a wonderful life I think, but they will tell you that they haven't a penny. and id believe them.

If she's a working teacher then they're very comfortable- ( in saying that i've no idea of their debts-commitments outgoings) . But if you dont have a huge mortgage and produce most of your own food as well as sfp, disadvantaged area payments , reps ( or its successor) oh and a forestry payment and you havent a bean then pity about you .

kowtow · 08-11-2015 02:14PM

over_leveraged wrote: »

im talking about investing in a diversified fund which covers a hundred different companies who provider completely different services , its a much more conservative investment than buying a BTL apartment , no properly diversified fund is worth less than it was pre crash , thats why i find it amusing when some say they lost their pension because of the irish banks , investing in a few banks in one country is not a pension to begin with by any definition of the term

not disagreeing and this is not the place to debate fund management diversified or not - but the interesting thing about long term lease incentives is that the gap is narrowed, particularly where significant CGT payable on disposal of the land.

compare 100 acres @ €1Million yielding say €25,000 p.a. tax free leased

with ? €700,000 (same 100 acres post CGT?) yielding say 3.3% - €23,000 odd fully taxable.

Haven't had to tangle with Irish CGT so might have missed something here and also there may be a practical cap on the leasing income but you get my point...

barnaman · 08-11-2015 03:27PM

Lads being over optomestic with lease prices. In 2015 I could rent top quality land at €200/acre; this is land that sells for €12,000 an acre again beggars belief that some lads pay that (Dairy lads!). Heard lads further down near cork were paying up to €300 for same as in dairying area with high competion and this was a reference year. I am in mixed tillage/beef/dairy area so that means 100 acres would get you €20,000. You have to pay USC and PRSI on that its just income tax free. Pay solicitor to draw up lease and pay stamp duty on it so leasing 100 acres in my ares will not get you €25,000. If subsides go after 2019 land prices and leases will drop massively. Rember if I buy a bunch of flats and rent to the rent allowance lads via the council I am guarennted income. giarentted property back in same state and have 100% mortgage interest relief.

barnaman · 08-11-2015 03:32PM

Meant to add that in this area the fencing is provided by the "landlord" so that nees to be taken from the lease/or added to the costs. Fencing a permanent fixture and noone is going to rent land not fenced and lads not goinf to spend a fortune fencing a farm to hand it back in 5 years.

frazzledhome · 08-11-2015 04:31PM

Capercaillie wrote: »

In twenty years time the only lads farming will be the large dairy men. The small men will all be gone. IFA will be happy with that.

That's a fairly broad brush. A lot of dairy farms started as small farms that need the full time income of cows.

pedigree 6 · 08-11-2015 05:04PM

Future in farming - It's down to labour and as the years go by it gets increasingly harder for people to do any manual labour. Years ago everything was done by hand. If you handed a young college educated chap a sprong now they'd tell you to shove it where the sun doesn't shine.
It also comes down to quality of life and you can throw income into that aswell. There's sons of dairy farmers here who their father's have built the finest of facilities that anyone would kill to have and their sons have seen the 365 day a year slog that their fathers have and said no thanks, I'm getting a proper job with paid time off, decent income and quality family time.
I'm not saying some farmers can't achieve this but the future is the sons and daughters of existing farmers and maybe share farmers who can try and get into the business that way. There's dairy farmers near me who are racing each other now that quotas are gone and they have literally aged 5 years in 1 year. They have hips and knees gone before they're 40 and their kids are looking at them wondering is this something I want to be involved in. So the future maybe it's corporate farming with time off for everyone but who knows.

barnaman · 08-11-2015 06:04PM

Are the Mods setting land! See Over is now banned!

Plenty in this weeks Farming Indpendent on all this. Jusr saw it!

Tell you one thing Pedigree you are right about the hardship. I I think did the discs in on my back out on farm on Friday cannot bend and awake 2 nights with the pain. Farming is not handy at all plenty of good bits I like but as happens I have college education and had a good job and havin seen both you realise that the regualar job is actually far easier. I think you could be spot on about corporate farming shrewdist insight on this post.

kowtow · 08-11-2015 07:06PM

Although it's an interesting subject I'm not sure that the central theme of this thread is about investment risk and reward of land, purchase price, or rents & performance compared to other asset classes; or indeed the tax treatment of either - suffice to say that there are other things to do with the land or the capital which it represents which appear to offer more obvious returns than farming it.

Which leaves the question, what does it take to make a living of any sort from 100 acres and why is it so damned difficult given the capital involved, or alternatively are the non-monetary rewards of farming so great that they make up for the missing income....

barnaman · 08-11-2015 07:18PM

The problem is we know nothing about the OPs 100 acres, his exsisting entitlements; the quality of the land, his stock, his machinery etc. The OP needs to engage an agri consultant and an agri accountant to advise him. Also we know nothing about his ability to avail of credit or his credit capacity. To be honest except for broad banter what we can tell him here is of limited use. All I can say is 100 acres will definitely not support him as a full time farmer.

Cassidy2 · 08-11-2015 07:45PM

barnaman wrote: »

The problem is we know nothing about the OPs 100 acres, his exsisting entitlements; the quality of the land, his stock, his machinery etc. The OP needs to engage an agri consultant and an agri accountant to advise him. Also we know nothing about his ability to avail of credit or his credit capacity. To be honest except for broad banter what we can tell him here is of limited use. All I can say is 100 acres will definitely not support him as a full time farmer.

Farm with money not for money.it would take 100000 to stock That farm.rent it if you can get 250 a acre

Muckit · 08-11-2015 09:47PM

Cassidy2 wrote: »

Farm with money not for money.it would take 100000 to stock That farm.

This is something many naive lads forget. Especially lads talking about buying land. No point having it and paying on it if you haven't budgeted to stock it. €100k is no pocket money.

Miname · 08-11-2015 09:56PM

Muckit wrote: »

This is something many naive lads forget. Especially lads talking about buying land. No point having it and paying on it if you haven't budgeted to stock it. €100k is no pocket money.

The first bits I bought left me without the price of a calf to stock it. It's stocked now however but it won't be on the market again.

Timmaay · 08-11-2015 10:04PM

kowtow wrote: »

Which leaves the question, what does it take to make a living of any sort from 100 acres and why is it so damned difficult given the capital involved, or alternatively are the non-monetary rewards of farming so great that they make up for the missing income....

One for me certainly is a free site, and the ability to oversee building myown house.

Deepsouthwest · 08-11-2015 10:31PM

Can't believe some of the neagativity on this thread, I'm right down on the coast in west cork, and I and plenty more guys like me would give their left arm for 100 acres of good land, and u can be sure they'd make a go of it too.
We're talking about 100 acres of top land in Ireland, if I was to believe some of the posts here, then farming would be finished on this country, it's not.

Deepsouthwest · 08-11-2015 10:39PM

Capercaillie wrote: »

Around my farm (NW mayo) most young lads aren't taking over the farm. Only the old lads left. Most of the farms are small. If subsides went (which they will eventually) I can't see lads working the land. Only basically hobby farmers like myself will be left.

If ur saying that totally unprofitable systems of farming need to be supported more by EU money to keep more young lads around, then that's a v sad state of affairs. If my kids decided to stay at home to live off subsidies I'd be disappointed.

Cassidy2 · 08-11-2015 10:42PM

Deepsouthwest wrote: »

If ur saying that totally unprofitable systems of farming need to be supported more by EU money to keep more young lads around, then that's a v sad state of affairs. If my kids decided to stay at home to live off subsidies I'd be disappointed.

That's the reality.we can't all live in cork

Capercaillie · 08-11-2015 10:45PM

Deepsouthwest wrote: »

If ur saying that totally unprofitable systems of farming need to be supported more by EU money to keep more young lads around, then that's a v sad state of affairs. If my kids decided to stay at home to live off subsidies I'd be disappointed.

Subsidies keep most of Irish agriculture afloat. Subsidies biased towards larger intensive farmers.

Miname · 08-11-2015 10:52PM

Capercaillie wrote: »

Subsidies keep most of Irish agriculture afloat. Subsidies biased towards larger intensive farmers.

That's untrue for starters. Glas isone of the simplest examples, sfp is being reduced back, anc is capped low too. Every scheme or other has various levels with the lower ones being the most profitable. Grants are great to get but everyone should be trying to farm as if they weren't there. Too many are farming the grants and not their farms, this is the scenario I see as unsustainable.

Grueller · 08-11-2015 10:59PM

Muckit wrote: »

This is something many naive lads forget. Especially lads talking about buying land. No point having it and paying on it if you haven't budgeted to stock it. €100k is no pocket money.

You can buy stock any Saturday in my local mart. Land to suit you doesn't come up too often. A year or two of struggle is a small price to pay to get it stocked after.

Capercaillie · 08-11-2015 10:59PM

Miname wrote: »

That's untrue for starters. Glas isone of the simplest examples, sfp is being reduced back, anc is capped low too. Every scheme or other has various levels with the lower ones being the most profitable. Grants are great to get but everyone should be trying to farm as if they weren't there. Too many are farming the grants and not their farms, this is the scenario I see as unsustainable.

GLAS is absolute rubbish. Rubbish watered down schemes that will provide limited benefit to species like corncrake /twite. Your payments are capped. If you want to plant non-native conifers on your land you have no cap on payments. Where's the logic in that? No cap on SFP to intensive farmers, yet small farmers in SPA/SAC are penalized by caps on GLAS payments.

Deepsouthwest · 08-11-2015 11:18PM

Capercaillie wrote: »

GLAS is absolute rubbish. Rubbish watered down schemes that will provide limited benefit to species like corncrake /twite. Your payments are capped. If you want to plant non-native conifers on your land you have no cap on payments. Where's the logic in that? No cap on SFP to intensive farmers, yet small farmers in SPA/SAC are penalized by caps on GLAS payments.

What does no cap on intensive farmers mean?

Deepsouthwest · 08-11-2015 11:24PM

Cassidy2 wrote: »

That's the reality.we can't all live in cork

Gimme a break, I live 500 metres from the Atlantic Ocean, with a mountain a km behind me, with plenty rocks, bog and bushes inbetween

Capercaillie · 08-11-2015 11:26PM

Deepsouthwest wrote: »

What does no cap on intensive farmers mean?

No cap on SFP. No cap on "greening" payment of SFP.

barnaman · 08-11-2015 11:27PM

Thread definitely gone off topic but just to drag it back a bit to 100 acres of top quality land as OP has as its in Carlow and no some that type land finest tillage you will get. Top quality land doe n't exists all by itself. To keep land top quality you need to invest in drainage, fertiliser, lime, herbcides, sheds to keep stock in to stop poaching, good fencing, keep hedges cut. Reseed to prevent pastures getting tired. Otherwise land deterirates and cannot hold the volume of grass or cattle it should. All that costs serious money and as I am lucky to have some excellent land I can tell you the return is not there at the moment. Sell finished cattle at €3.90 to €4.10 will not make you up. Know plenty at tillage and diary around here and can asure none those lads swimming in cash this year.

Miname · 08-11-2015 11:29PM

Capercaillie wrote: »

GLAS is absolute rubbish. Rubbish watered down schemes that will provide limited benefit to species like corncrake /twite. Your payments are capped. If you want to plant non-native conifers on your land you have no cap on payments. Where's the logic in that? No cap on SFP to intensive farmers, yet small farmers in SPA/SAC are penalized by caps on GLAS payments.

Glas is of more benefit to small farmers that are less intensive. Cap is pulling all entitlement s back to have a one size fits all . I think you want all the grants just to suit your way of farming, and use the save the pigeon excuse as way for you to not try and actually farm your own ground.

kowtow · 08-11-2015 11:46PM

Deepsouthwest wrote:

If ur saying that totally unprofitable systems of farming need to be supported more by EU money to keep more young lads around, then that's a v sad state of affairs. If my kids decided to stay at home to live off subsidies I'd be disappointed.

If farming really does need more EU support to make it viable that's a very good reason for young talent to run a mile ... drive + determination to take the world on and shape it are what we want, not an inherited dependence culture and the "price taker" mentality which goes hand in hand with it.

If the above sounds idealistic, it's supposed to be, because idealism and ideas are what's needed.

Plenty of time for the young to get old and dissolusioned later on.

Deepsouthwest · 08-11-2015 11:50PM

Capercaillie wrote: »

No cap on SFP. No cap on "greening" payment of SFP.

My SFP (that I worked for a long time to build up, including buying entitlements) is now being significantly cut to be divided out between less intensive farmers who contributed far less to the food chain in the reference yrs, and will continue to produce less. How is this the IFA supporting big farmers and forgetting about everyone else?

Capercaillie · 09-11-2015 12:06AM

Deepsouthwest wrote: »

My SFP (that I worked for a long time to build up, including buying entitlements) is now being significantly cut to be divided out between less intensive farmers who contributed far less to the food chain in the reference yrs, and will continue to produce less. How is this the IFA supporting big farmers and forgetting about everyone else?

EU gave Irish Government 528 million euros for farmer in SAC/SPA/Natura2000 sites. DAFM/IFA decided to relocate the funds.
The original budget for distribution to farmers managing land within these protected areas was €528 million. However, in 2013 the Department of Agriculture abruptly announced that only €93 million would be spent on Natura 2000 sites and that the massive balance of more than €400 million would be reallocated elsewhere. This represents a reallocation of greater than 80%.
EU gave Irish Government 540 million euros.

barnaman · 09-11-2015 12:10AM

I am a young farmer and had land with no entitlements. This was the flaw with subsidies and why Ithink they should be scrapped like the milk quota, taxi licences and pub licences. They do not reflect actually farming if you farm farm and leave at that. Lads bought a pile of bullocks years ago knowing that that year would be a reference year got high beef slaughter premiums and numbers and promptly sold them. If you cannot farm to make money do something else. I am trying to currently figure if it is making money for me and looking at my figures without the BFP it is not. That tells me that I cannot guarentee that I will be farming in 10 years and if thats the case so be it. Farming is a business simple as that and the problem in Ireland is the farms are in reality way too small.

Future in farming

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