To wonder why agricultural land is worth so much?

[MrsBennetsPoorNerves]

This is a genuine question because I'm trying to understand.

I keep hearing farmers say that farming is very unprofitable, that even huge farms worth several million pounds produce next to no income, and that farmers would be forced to sell land in order to pay the tax bill, thereby making the business unviable. Hence the opposition to inheritance tax.

But if that's the case, how is it that these farms are worth so much in the first place? Surely, if it's such an unprofitable business, you would expect the value of the farm to drop to reflect the fact that it's actually a very unattractive investment?

NB I'm not trying to score a political point here, I do really want to understand.

No, I have not watch him in the farm. I am assuming is something on the lines of top gear. Trying lots of things and messing more than half.
I will not watch it. I cannot stand him.
I have watched other farming programs, I am sure they had one where students learnt farming. I loved them so much!
And I do appreciate farmers, but not Clarkson.

I found it! Countryfile, but a good years back.

We are smalltime farmers. Where we live (N.I) land is very hard come by to buy. If there's even a sniff land is coming up for sale it never actually makes it onto open market because someone will have approached the vendor with a very generous offer.

I think the old saying that there is no such thing as a poor farmer still stands true.

I also think there is no farmer who won’t plead poverty when it suits them.

Obviously this is for the land owner. Tenant farmers is a different matter.

Consider also that we only grown 50% of our food. We import the rest. Remember how Spain just experienced terrible floods?

this isn't correct though, we grow 62% and export, so 50% is left on our plate

We used to grow 75% of our food. What does that tell you about farming? It’s contracting. The government doesn’t give a shit about food security which I find really worrying.

we used to supply 78% of our own food in 1988 - that was up from 1960 when it was 52%

You have no idea

Yes, but same with manufacturing, we used to produce a huge proportion of our goods PLUS exported a huge proportion too. Now we're dependant on foreign countries for so much it's a real worry. Just look at the shortages during covid and the Suez blockage. Not just "natural" problems like that, but it puts us at political risk if other countries simply decide not to sell to us or but up prices. Really worrying times ahead.

Answer to the OP’s original question: in 1984 death duties were abolished on farmland. Up until that time it had been included in the deceased’s estate. Between the years 1992 and 2012 the value of agricultural land rose 4 fold, far outstripping inflation Meanwhile farmers’ margins were being squeezed by the power of the supermarkets. Thus wealth and income massively diverged…..

I can see farmers struggling, particularly smaller ones and those who rent the farm.

So you’d be happy to have let’s say 30% less on your plate?

It’s not 100%. Shouldn’t we be aiming for that?

Because it's in demand for building. We have a lot of farmland in the family & you would not believe the offers we have had to sell. I wonder if FIL actually negotiated to sell what he would get..

Caleb crying after the rape seed oil crop failed. https://www.devonlive.com/news/celebs-tv/jeremy-clarkson-comforts-kaleb-cooper-9270590.amp

he was also in tears towards the end of the series when he realised he wasn’t going to break even from all the hard work he put in.

Try looking in to it properly, rather than with the eyes of the prejudiced. There's a few series on the TV that highlight farming - This Farming Life, Our Yorkshire Farm, Springtime/Summer/Winter on the farm. Though these are mostly based around larger farms, they often have info about struggling smaller farms on there.

There are plenty of stats out there that show quite a few farms are making a net loss year after year

A little googling can also show that much of the income of farms, well over 50% for smaller farms, comes from Direct Payments which are being reduced drastically year on year.

Totally agree with @PlopSofa , we as a country need to get more secure in our ability to produce our own/more food. Global warning, floods, Russia cutting off wheat from Ukraine……we should reduce our vulnerability to this.

We need to stop building on farming land, we need to stop allowing massive solar panel farms…….theyre applying to cover 7000 acres of a1 agricultural land near me with solar panels. We need to grow food on the fields and put solar panels on roofs or on motorway verges and central reservations.

The govt need to help farmers, not make things less sustainable. Ultimately as a country their ability to make a profit (or not) affects us all.

@DanielaDressen says we need 100% food security - unless everyone on here has suddenly decided they don't mind reducing their plates by 30% at every meal - what they eat. Is that what you want?

Farms need to thrive, not to be contracting like the are. I agree it shouldn't be an IHT dodge but this feels like a very blunt tool that Labour have used to try and get a share of a pie they shouldn't be meddling with. We all need to eat don't we?!

As for solar panels, there are 1000s of car parks all over the country. They could easily be installed with solar panels. it's what a lot of countries are doing. It provides shade for the cars on hot days too.

https://ecoquotetoday.co.uk/blog/solar-car-parks

In France they've made it compulsory for car parks over 80 spaces to install solar panels.

France imports far less food than we do.

https://tradingeconomics.com/france/food-imports-percent-of-merchandise-imports-wb-data.html#:~:text=Food%20imports%20(%25%20of%20merchandise%20imports)%20in%20France%20was%20reported,compiled%20from%20officially%20recognized%20sources.

I'll be getting my European passport sorted before long. This country is badly run and has been for decades. So very very sad. It's hard to watch things decline but it's just one lot of bad leaders after another.

The bigger stink, is when it is sold for housing it is often land banked for years. So it's doing nothing. Not being farmed, not being used. What a waste.

A local farmer told me that his most valuable crop was campers. He had a secluded field for naturist campers too.

You haven’t taken any input costs into consideration!!!! Fertiliser, spray chemicals, diesel, wear and tear on the tractors and actual man hours to grow the crop in the first place!!!! Milling wheat is also the highest standard you can get - most wheat goes to feed! Farmers may also get a higher price for oil seed rape but the input costs are huge and it’s very hard to get a decent crop due to flea beetles eating it!
So for the average 50 hectare farm that sells £80k of wheat only £40k of that will be profit and a farmer has probably had to work on average 60 hours a week 52 weeks of the year to make that £40k!

All land that’s useable is very valuable.

Take a look at any new build estate and do the maths. One big field ends up as 300 houses with an average selling point of £450,000. That’s house value of £35,000,000 - obviously it costs a lot to build the houses, but it’s extremely profitable.

likewise try and buy a small plot of buildable land anywhere. I’ve seen tiny plots of bare grass with planning permission here in South Wales for sale for £400,000.

Land that can’t be built on is of much less value- but that’s typically land that can’t be used for farming anything other than sheep or trees.

Another reason land prices are high is due to big businesses (building warehouses for distribution etc and also houses) buying agricultural land to offset their carbon emissions and this is only going to get worse!

Very few inventors create something genuinely new. The vast majority of inventions are incremental improvements on things done or created by others before them. Dyson is the one who actually thought of it - everyone else didn’t- that’s how successful people become successful. It’s easy to look back in hindsight and say something was obvious or easy, but no one else actually thought or did it! Some people have vision, most don’t.

Yes. But both Dyson and Clarkson bought land to shelter money.

Clarkson does farm but of course employs people. He publicised farmings woes but he’s odious. Farmers don’t always have the best judgement! Some voted for Brexit!

Land might get developers taking an option on it - hedging it will get included in a development plan. Any farmer sitting on £millions of development land worth squillions takes it! Anyone would!

Farmers don’t think with a hive mind. I will repeat that farmers voted for Brexit in the same proportion as the rest of the country.

What kind of a question is this??

Ever heard of the landed gentry?

My life