In article ,
says...
On Mon, 30 Dec 2002 20:36:29 -0000, David P
wrote:

In article ,
says...
On Sun, 29 Dec 2002 16:57:56 -0000, David P
wrote:

In article ,
says...
From what I have seen so far, I am unconvinced, that the AHA rents
track the agricultural value significantly more accurately than land
sales values. The response in either case seems to be biased, slow,
and incomplete, and you point to some of the reasons this is so.

I also omitted to point out that the AHA rent is based on the productive
capacity of the *land*. Most farms will have a dwelling on them.

Sorry, please can you rephrase/expound?

Elementary my dear Watson. A farm comprises, in the main, land and
dwellings. The rent has regard to both the dwelling and the land. The
land value is 'restricted' by having regard to its productive capacity.
There is no such restriction imposed when considering the value of the
dwelling.
Residential values have been rising quite dramatically in the UK.

So, if I understand you, if the agricultural value of the land drops
like a rock, while the residential value rises dramatically, the
combined effect may be that AHA rents stays the same.

That is correct.

The increasing
part of AHA rent which represent rent of dwellings would not be
included in the farm account, its increase would therefore not affect
farm income.

I am not an accountant nor a farmer so couldn't possibly comment.

To get back to our line of inquiry, might it have had an adverse
effect on UK farm profitability to 2002, that land rents have been
kept at or close to historic high levels, while farm income fortunes
dropped to scraping the bottom?

Yes. If we are talking of tenanted farms/land.
No. If we are talking of freehold farms/land as they have no rent burden
to carry.

What, are we not talking about UK farm profitability in terms of
Net Farm income?

If I owned a farm outright I would be able to calculate my profitability
quite easily - why would I need to deduct a rent that I don't pay?
--
David
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