Young Farmers series: 1 Capital and Land


In the first in a new series on young farmers we take a look at the difficulties facing young farmers. This week land and capital.

Young Farmers series: 1 Capital and Land

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  • 4 years ago

In the first in a new series on young farmers we take a look at the difficulties facing young farmers. This week land and capital.

Land, money, banks, livestock, machinery these aren’t just the list of things you need for a farm there the obstacles that stand in the way of our young farmers today. Each and every item can be a hurdle that must be overcome, each and every obstacle is a major one when you are just starting out in farming.

A few months ago That’s Farming invited the FBD Young farmer of the year Kevin Moran to speak on the That’s Farming podcast about his road to farming. His story is unique but there are many overlapping factors facing our young farmers.

Kevin’s first roadblock was land and access to it. Kevin’s problem was he didn’t have any. His solution; to rent.

Access to land is probably the most important factor facing our young farmers. Many fresh out of Ag college farmers can’t get a hold on any. It’s something that’s been flagged by Macra Na Feirme’s president Sean Finan whose body have uncovered that;

‘48% of all farmers over the age of 50 have no identified farming successors and that creates a problem because there is no identified person to hand the land over to.’

This lack of clear succession has created a supply and demand problem. Land leasing has proved to be one option for our young farmers with many attractive long term lease options now available.

Loans

Gaining access to loans is another big factor for our young farmers. Taking the example of a young farmer with access to land who wants to get into the beef industry. John Fitzgerald head of Agriculture at the Bank of Ireland talks us through the different options.

‘We would want to look at his own track record, has he got a good current account and financial discipline and we then need to look at what is he is bringing to the deal himself whether its equity or stock or that could form his own equity and that could be used instead of funds.’

John also advises that if it’s an inherited family farm that’s being taken over then;

‘We need to see how that farm has been trading as a farm in recent years and we would like to see how it has performed and we would need to see what the new farmers plans and projections are saying and are they realistic.’

Banks are by their nature cautious and will not take big gambles. Loans in excess of 65,000 will need to have a security such as land attached to them.

For a farmer with no land but who may come from a farming family. An arrangement can be made that borrowings could be made on the strength of the home farm to cover their borrowing.

With only 6% of young farmers under 35 in our industry the need for access to affordable capital and land is a huge issue. Greater access will mean greater numbers of farmers which will ensure our food security and global leadership role in agriculture moving into the future.

It’s something Mairead McGuiness now running for President of The European Parliament has spoken of on many occasions. Let’s hope she remembers it when she is elected.

Coming up next week: Grants and labour.

image [stock via donedeal blog]

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