Latest news with #AnnualAgriculturalLandMarketReviewandOutlook2025
Agriland
30-04-2025
- Business
- Agriland
Land report: Tax incentives boost popularity of long-term leasing
Long-term leasing is emerging as the preferred option for farmers due to tax incentives, increased stability, and supportive policy measures, according to a new report. The Annual Agricultural Land Market Review and Outlook 2025 report, shows that the proportion of land under long-term leases remains at 74%, which is consistent since trend tracking began in 2017. In contrast, conacre letting has experienced further decline, now registering a net decrease of 22% compared to 2023, 'reinforcing its ongoing downward trajectory'. Long-term leasing A total of 45% of Society of Chartered Surveyors Ireland (SCSI) auctioneers and valuers who took part in a survey for the report said that demand for long-term leases has increased. 34%of respondents reported that the level of land leased in 2024 in their region remained the same when compared to the levels reported in 2023. The report, published by SCSI and Teagasc, found that Munster has experienced the most significant year-on-year increase in farmer demand for long-term leases, with 56% of respondents noting a rise, up from 40% in 2023. The proportion of SCSI members reporting a decline has dropped to 19% from 30% last year. 'These findings suggest a continued shift toward secure, multi-year leasing arrangements,' the report stated. Provincial demand for long-term leases. Source: SCSI Research The report noted a decline in the percentage of respondents reporting an increase in lease durations, from 54% in 2023 to 46% in 2024. It stated that this suggests 'a growing stabilisation in the trend toward longer-term agreements'. The report said that the availability of land for leasing is largely influenced by two key groups: retired farmers or those who have lost interest in farming. 90% of respondents noted that this group remains somewhat or very active in leasing activity. Nearly 43% of respondents indicated that a farmer who is continuing to farm but has decided to lease a portion of his farm is rarely or never active. 84% of respondents noted that farmers typically pay more per acre for similar quality land on a long-term basis, compared to short term lets. Long-term leases are now increasingly favoured due to tax incentives and the stability they offer both landowners and tenants. Since January 2024, tax relief earned on leasing farmland only applies to land owned for seven years. Rental values The report found that rental values rose by 6% on average across all farming uses in 2024, driven by the limited supply in the land rental market. One auctioneer in Munster said demand for rented ground was 'very high' in their area, mainly down to the EU Nitrates Regulations. 'The European Commission decision regarding the renewal of the derogation later this year will be a deciding factor of how busier the rented land market will get and how high prices could go,' they said. The recent US tariff announcement and its possible implication on whiskey production was cited by another SCSI member as a significant factor that could impact on the demand for rented tillage land.
Agriland
29-04-2025
- Business
- Agriland
Generational renewal: Policy, incentives and cultural shifts needed
Policy reform, financial incentives and cultural shifts are all needed to address the 'complex challenge' of generational renewal in agricultural, a new report has stated. The Annual Agricultural Land Market Review and Outlook 2025 report, published today (Tuesday, April 29), contains a dedicated section on farm succession and generational renewal. The report from the Society of Chartered Surveyors Ireland (SCSI) and Teagasc noted the challenge is further compounded 'due to an ageing cohort of farmers, who are reluctant to transfer land, and for whom financial concerns persist'. The report also highlighted that the average age of farmers is 59 years and just 4.3% are under 35 years. Generational renewal The SCSI survey of auctioneers and valuers found the main reasons for such low land volumes coming to the market for sale relate to cultural, taxation and succession planning issues. Dr. Frank Harrington chair of the SCSI's Rural Agency Committee, said that 'land mobility continues to remain a significant challenge' Many survey respondents believe the government should review the tax treatment of agricultural land to entice more land to the market to support the younger generations of farmers. 'More land on the market would assist younger farmers enter the market which could also help improve profitability in farming with a scaling up of food production. 'The responses to the survey highlight that in the context of an ageing farming demographic, there is a greater likelihood that their land will be made available for long-term leasing rather than being made available on the sales market,' Harrington said. Research has highlighted that adequate pension provision is key and requires long-term planning. The report stated that addressing pension issues and integrating with other tax reforms and land mobility policies should be considered in the effort to improve farm succession rates. It added that collaborative and structured succession models, such as farm partnerships, show promise in overcoming barriers and are crucial for sustainable farm transitions. The report points to the role of older farmers in knowledge transfer and mentoring. 'Research highlights the need for policies that allow for gradual transitions rather than 'abrupt' retirement, especially given the number of farmers who indicate that they never plan to retire,' Dr Jason Loughrey, Teagasc economist, said. 'While it appears that young farmers have difficulty in competing in land rental markets, insights from the Teagasc National Farm Survey suggest that a large volume of additional land may become available to land rental markets in the medium-term. 'This may support the prospects for younger farmers in some parts of Ireland. However, the availability of medium-sized and large plots of land will remain important for younger farmers in regions where dairy and tillage farming are most prevalent. 'We need to put the structures in place now to facilitate this type of land market activity,' he said. The government-appointed Commission on Generational Renewal in Farming is due to present its report by the end of June. Agricultural outlook Meanwhile, the Annual Agricultural Land Market Review and Outlook 2025 also highlights how the strong improvement in output prices for livestock and milk which emerged in 2024 is continuing into this year. Dr. Jason Loughrey estimated that the average net margin per litre of milk produced increased by 84% to 13.3c/L last year. 'Prices were higher in the first quarter of 2025 compared to the first quarter of 2024. 'This year, beef prices have reached record levels and were approximately 40% above the average for the first quarter of last year. So far this year lamb prices are up 19%,' the economist said. 'However, the introduction of new tariffs on exports to the US is adding uncertainty for both the short and medium term. 'Exports of Irish butter to the US have grown rapidly in recent years and this market may become less lucrative given the imposition of 10% tariffs with the possibility that additional tariffs may be imposed,' he warned. Dr Loughrey noted that aside from the impact of tariffs, the prospect of a trade war is also affecting exchange rates and global economic growth prospects. 'Having been close to parity with the Euro in January 2025, the US dollar has since weakened in value. 'This has negative implications for the euro value of Irish agri-food exports traded in dollars and positive implications for the cost in euro terms of imports of key agricultural inputs such as feed, fertiliser and energy, which are also traded in dollars,' he said.
