What are the land rental trends of tillage farmers?

Tillage farmers are losing out on the land rental market once again in 2024, a survey carried out by the Irish Farmers Journal last week has shown.

Seventy-eight farmers took part in the survey and data was limited to tillage only and mixed tillage farms.

Figure 1 shows the breakdown of farm size across survey participants. Fifty-two per cent of farmers in the survey farm 100ha or less with 14% farming 31ha to 50ha, 30% farming 51ha to 100ha, 27% farming 101ha to 200ha, 10% farming 201ha to 300ha, 7% farming over 301ha to 500ha and 4% farming over 500ha.

How much land is rented?

Eighty-two per cent of the farmers who took part rent land. There was a huge variation in the amount of land being rented on farms. Twelve per cent of participants rented less than 10% of their land. The full breakdown can be seen in Figure 2. Nineteen per cent of respondents rent 10% to 20% of their land, while another 12% rent 20% to 30% of their land.

Thirty-six per cent of farmers surveyed rent 50% to 80% of their land. This is actually divided evenly with 12% renting 50% to 60%, 60% to 70% and 70% to 80% each.

What farmers pay for rented land

The majority of farmers in the survey said that they do not pay more than €250/ac for land. Thirty four per cent of respondents to the survey said they pay €150/ac to €200/ac for land, while 41% pay €200/ac to €250/ac.

Eight per cent said they pay less than €150/ac, while just 4% pay €300/ac to €400/ac.

When asked what is the most you are willing to pay for land, 32% of farmers said €150/ac to €200/ac, 44% said €200/ac to €250/ac, 19% said €250/ac to €300/ac, while 5% said they were willing to pay €300/ac to €400/ac.

Five-year lease agreements were in place for 42% of respondents renting land

Twenty-seven per cent of land rented on farms is in conacre, so the lease needs to be agreed from year to year.

Five-year lease agreements were in place for 42% of respondents renting land, while 12% of farmers had seven-year lease agreements.

Twenty per cent of those surveyed said that they have already lost or think they will lose some of their rented land in 2024.

Seventy-nine per cent of farmers who lost land in recent years said that their lease was up and a higher bidder secured the land.

Ten per cent said that the lease was up and the land was no longer being rented out, while 8% said they can no longer afford to pay for rented land with 3% saying the farm was going into solar.

Eighty-two per cent of those surveyed said that the enterprise which they have lost land to is dairy.

Dairy farmers have been pushed to rent more land or reduce stock numbers due to a reduction in the stocking rate limit under nitrates regulations.

Eighty-three per cent of farmers said that a Tillage Incentive Scheme would help them to secure land. However, most agreed that things were not that simple.

Farmers taking part in the survey said that there needs to be a scheme for tillage farmers only with suggestions that this scheme needs to help to maintain land in tillage and help with income, while also encouraging land into tillage.

Respondents to the survey suggest that the scheme needs to be at least five years in length and cannot allow for grass reseeding or arable silage.

It was very clear from comments at the end of the survey that tillage farmers feel they should be rewarded for having a low environmental footprint and stated that this can be done through payment for grain, Government payments and tax incentives on land rented to grow tillage crops.

There were a large number of comments urging the Government to take quick action before it’s too late for the tillage sector.

While many said that a tillage payment is needed, it was clear that tillage farmers feel that their produce carries more value due to its low environmental footprint and that this is not being recognised in prices paid for that produce.

In last week’s paper, we reported figures from the tillage industry that suggested the tillage area could decline in 2024 by at least 20,000ha and as much as 30,000ha.

This figure is not too far off the reported seed shortage, which looks to be disappearing as merchants and co-ops report that orders are down. This is at a time when the Government has a target to increase tillage area by over 50,000ha to 400,000ha.

Very little is being done to meet this target. In fact, rules like the two- and three-crop rule are having a negative impact and need to be removed quickly for this wet season. Farmers are looking at wet land and grain prices €30/t less than last season.

The cut to the nitrates derogation stocking limit is driving dairy farmers to rent land.

Large swaths of tillage land are leaving the sector on a weekly basis.

Farmers commenting on this survey made the point that when that land goes into grass it won’t come back out of grass or it will be very hard to get back to tillage.

A tillage payment is needed to help farmers stay in business and cope with lower grain prices and financial losses due to convergence.

The Department needs to move on paying farmers for tillage schemes.

Many payments are held up where the farmer has done everything right.

Tillage farmers need a boost and the Government needs to act quickly.