With ongoing Brexit certainty and a tough year financially across all farming sectors, demand for conacre in NI has weakened.

The largest public land letting in NI was held near Eglinton last week and prices for the same land were up to £30/acre lower than last year.

The annual letting of 650 acres of grassland for the Earl Castle Stewart saw almost all lots return to the same tenants as last year, but at lower prices. Prices started from £100/acre and most lots were agreed between £140/acre to £160/acre.

Two fields of newly reseeded grassland that were both 20 acres in size, went for £210/acre and £200/acre, down from a top price of £370/acre for new grass in 2018.

Meanwhile, reports from other public land lettings across NI indicate that conacre prices are at best, unchanged or lower than last year’s levels.

Most dairy, beef, sheep and arable farmers who took on rented land in 2019 farmed it at a loss this year.

It means that tenants who are trying to negotiate lower conacre prices with landowners have more confidence that other farmers are less likely to step in and offer higher rents.

Guarantee

There is also no guarantee around funding for support payments to UK farmers next year.

The UK government previously committed to maintain funding at current levels until the end of parliament, which was originally expected in 2022.

However, with parliament dissolved ahead of the upcoming general election, that commitment has gone.

With the UK due to leave the EU at the end of January, farm support payments from 2020 onwards will come from the British Treasury, and the total level of funding will be a decision for the next UK government.

Although a radical change in farm payments from next year remains unlikely, the uncertainty is still influencing discussions on land leasing.

Many farmers entered five-year rental agreements with non-farming landowners in 2015 when Basic Payment Scheme (BPS) entitlements had to be transferred to active farmers to be claimed.

With those agreements expiring at the end of 2019, most farmers are choosing to negotiate shorter term leases until clarity emerges on Brexit and future support payments.

Values

But assuming the system is retained in 2020, the other major issue to be resolved is whether NI freezes BPS entitlements at 2019 levels or continues to move to a flat rate by 2021. The legal default is for values to be frozen at 2019 rates.

However, that decision is for a future agriculture minister to decide, but the longer Stormont remains in deadlock, the more likely that default option becomes.

Ends

Read more

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11% increase in conacre costs