First published in Irish Executives “Bloggers in Residence” on 19th June 2013
The number one physical resource we have here in Ireland is arable land, 64% of which is used for agriculture. (Ask about Ireland). The question is this, is the current system of “land ownership and use” giving us best bank for our buck.
Our system of private land ownership means that we are dependent on the abilities of the existing landowners (139,829) to use the land to its best advantage on our behalf. The reality is that this land is technically owned by the people of Ireland as a whole and we use private land ownership as a management tool.
Should the 4.3 million non farming part of our population have any say in how efficiently the land is being used and should the Government have a policy of “use it or lose it” to drive land use efficiency on our behalf?,
Right now an elderly farmer, with minimal living needs, can sit on a farm without working it while at the same time we have young enthusiastic potential farmers having difficulty getting access to land.
The ownership of land in Ireland is a very emotive subject and I am certain that anyone reading this with any connection to farm land will be saying “butt out city boy, this is none of your business” I say differently and some of the numbers are interesting.
There are more Irish farmers over 80 years of age than under 35
Over 25% of our farmers are over 65
In 2010, 51.4pc were over 55
Only 7% of farmers in Germany are over 65,
In France the number is 13%.
According to Savills, the estate agents, in France (2007), each field changed hands at least once every 70 years, but in Ireland on average a field changed hands every 555 years!
The land area of Ireland is 6.9million hectares, of which about 4.2million hectares is used for agriculture or about 64% of total land area
80% of agricultural land is devoted to grass (silage, hay and pasture)
11% is in rough grazing
Only 9% is allocated to crop production.
We import 50% of all food consumed in Ireland amounting to about €8bn in retail value (Irish Independent)
The following is from personal observation from travelling around Ireland the UK and Europe, it is not scientific, just my own personal observations while travelling around.
In Ireland you are likely to see some version of the following
In France or Austria you will see some version of the following, with crops growing all the way to the roadside
There are of course issues of habitat and hedgerows but the general feeling I get while travelling in Ireland is one of wild neglect whereas in the UK and Europe there is a sense of a managed landscape
What to do? We obviously cannot just throw people off their land. Some form of incentive and taxation carrot and stick policy should be put in place to move our farmland usage to a more productive and efficient system.
There are currently taxation benefits for people who will lease out their land on long leases. Unfortunately most Irish leases are 11 month Conacre a traditional way of renting land without a tenant ever getting right to that land. The problem with the tax incentive long leases is that they don’t really give the lessee any incentive to improve the land.
What we really need is a land tax, based on the notional earning capacity of a given piece of land. A landowner can then decide to either work the land or sell it on to someone who will.
I can hear the cacophony of protests saying that farmers don’t earn enough money to pay taxes. In 2010 Irish Agricultural output was worth €5.3bn and we know from my last blog that Farmers paid €99m in income taxes in 2009, It seems to me that there is a lot of money in our agriculture system. That €5.3bn does not include the €1.6bn of EU subsidies to Irish farming every year
If farming in Ireland is so unprofitable, how come farm land in Ireland is the most expensive in Europe?
A few examples from a leading property website
Edenderry,Co. Offaly, 16.26 acres (6.58 hectares) €200,000 €12,300 per acre
Newcastle, Tipperary 9 acres (3.76 hectares) €81,000 €9,000 per acre
Ballydavid, Kerry 4.5 acres (1.82 hectares) €60,000 €13,300 per acre
Lisnakeeny, Monaghan, 19 acres (7.69 hectares) €180,000 €9,470 per acre
Tramore, Waterford, 68.55 acres (27.7 hectares) €685,000 €10,000 per acre
What would the positives of such a policy be?
If we could improve usage and productivity by having younger, better educated, farmers combined with good modern business practices, to market and distribute increased output and replace 25% of the current food imports, we could increase agricultural output by €1.25bn. With a multiplier effect of 1.734 that means a €2.16bn increase in output value. (p13. The importance of Agriculture and the Food industry to the Irish Economy)
I have spoken to a number of people who are directly involved in, or close to, the farming industry and as far as I can ascertain, a Masters level of business education would be unheard of in the context of running a farm on a day to day basis and the concept of a five year business plan would not be the norm.
My belief is that if we combined a “Use it or lose it” policy with masters level inputs to the animal husbandry, crop growing and business side of farming , Irish farming could be one of the major drivers for growth in our indigenous economy and, as a USA business colleague commented to me regarding another issue, “You can’t export those Jobs”
Originally written by Brendan Palmer and published in Irish Executives “Bloggers in Residence” on 19th June 2013
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