In article ,
says...
On Sat, 28 Dec 2002 20:12:39 -0000, David P
wrote:

In article ,
says...
On Fri, 27 Dec 2002 21:37:07 -0000, David P
wrote:
Rents are certainly *not* in excess of £100/acre
under AHA's. Rents under FBT's do have a tendency to hover around that
level but those rents are not related to the productive capacity of the
land.

There is only a small number of FBTs in the IPD sample, they
reported average rents of £79 per acre, while rents on traditional
leases were £62 per acre. Seasonal grazing rents averaged £57 per acre
in 2001.

IME FBT's were much higher than £79/acre. AHA's tended to be slightly
lower than the £62 you quote - but not significantly.

OK. I take it that you consider the level you give, ~£100/acre as
currently a more realistic estimate than the $79 given by the IPD.
To be fair, the authors do make clear reservations as regards the
representativeness of their FBT sample.

Umm - are we actually going anywhere with this or have we simply
digressed into an interesting exchange of figures?

Dunno. It seems selfevident to me, that high price of farmland must be
adverse to farm profitability,

I need to be slightly more careful than usual here. It may be said that
the rent under an AHA is a more accurate representation of the
agricultural value of the land. The rent has to have regard to the
productive capacity of the land and its related earning capacity.

In this respect I would suggest that it may be the best guide to where
the value of purely agricultural land should lie. In the UK though there
are many external factors affecting the land values and it is therefore
rare to come across a purely agricultural value. Indeed, I am not sure I
have *ever* seen a pure ag. value.

Yet, if I understand you, the concept of the agricultural value of the
and is not really foreign, e.g. as that which the AHA rent must have
regard to, and as that which you consider AHA rents to be relatively
accurately representing.

The agricultural value of land would then seem to have been about the
same now as it was in 1996, with a minor peak about 1999, judging from
FPDSavills Estate Benchmark survey AHA rent settlements time series:
(£/acre, cvt. read from graph)
1996: 47
1997: 52
1998: 65
1999: 68
2000: 65
2001: 62
2002: 58

Such indication of a relatively constant agricultural value of land
is a surprising result, when other indicators indicate that farm
profitability has dropped like a rock in the same period.

I don't find it at all surprising. In the real world it costs the tenant
to fight for a reduction in the rent he pays. He will have the costs of
an Agent to stand and may also have to bear the whole or part cost of an
Arbitration. This likely cost may mean it is not be worth his while
pursuing an attempt to reduce the rent paid. Note also that the rent
review cycle is 3 yearly - and that 99 - 2000 shows a very significant
drop in rent.
--
David
Visit http://www.farm-direct.co.uk for your local farmgate food supplies.
FAQ's, Glossary, Farming Year and more!

On Sun, 29 Dec 2002 10:29:58 +0000, Tim Lamb
wrote:

In article , Torsten Brinch
writes
The pocket book is modestly priced:-) ISBN 0-9541201-0-8 (2001 edition)

But you said the data was taken from John Nix 2002?

32nd edition (2002) September 2001. Copyright 2001. Take your pick!

OK, I wanted to make sure what edition is the one with the potential
data error. (Perhaps the editor reads this, or you or some other kind
soul will alert him.)

For the present, I suggest we ignore the '90 data point in the data
set you posted, as an outlier, as was my immediate suggestion. This
moots your question, what caused the '90 peak in the data, since there
is no longer a '90 peak. But that is always the risk, when one makes
inquires mainly based on a single data point.

Ignoring the '90 data point, the striking feature we are left with is
the increase of land values in tune with the McSharry reform. Perhaps
we could give that some more attention, what say you?

On Sun, 29 Dec 2002 11:54:53 -0000, David P
wrote:

In article ,
says...
On Sat, 28 Dec 2002 20:12:39 -0000, David P
wrote:
I need to be slightly more careful than usual here. It may be said that
the rent under an AHA is a more accurate representation of the
agricultural value of the land. The rent has to have regard to the
productive capacity of the land and its related earning capacity.

In this respect I would suggest that it may be the best guide to where
the value of purely agricultural land should lie. ..
..
FPDSavills Estate Benchmark survey AHA rent settlements time series:
(£/acre, cvt. read from graph)
1996: 47
1997: 52
1998: 65
1999: 68
2000: 65
2001: 62
2002: 58

Such indication of a relatively constant agricultural value of land
is a surprising result, when other indicators indicate that farm
profitability has dropped like a rock in the same period.

I don't find it at all surprising. In the real world it costs the tenant
to fight for a reduction in the rent he pays. He will have the costs of
an Agent to stand and may also have to bear the whole or part cost of an
Arbitration. This likely cost may mean it is not be worth his while
pursuing an attempt to reduce the rent paid. Note also that the rent
review cycle is 3 yearly - and that 99 - 2000 shows a very significant
drop in rent.

I am not sure you meant to write 2000 there. The drop from the peak in
1999 to 2002 is certainly significant, a 14 % drop relative to the
peak rent in 1999. However, this came assumedly as a response to a
50 % drop of income from farming from 1996 to 1999.

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 would like your opinion on why FBT rents appear to be tracking the
agricultural value of land even more poorly than AHA rents. They
would, if I understand the arrangement. come closer to open market
values and be more frequently subject to renegotiations.

Torsten Brinch wrote in message
...
On Sun, 29 Dec 2002 10:29:58 +0000, Tim Lamb
wrote:

In article , Torsten
Brinch
writes
The pocket book is modestly priced:-) ISBN 0-9541201-0-8 (2001
edition)

But you said the data was taken from John Nix 2002?

32nd edition (2002) September 2001. Copyright 2001. Take your pick!

OK, I wanted to make sure what edition is the one with the potential
data error. (Perhaps the editor reads this, or you or some other kind
soul will alert him.)

For the present, I suggest we ignore the '90 data point in the data
set you posted, as an outlier, as was my immediate suggestion. This
moots your question, what caused the '90 peak in the data, since there
is no longer a '90 peak. But that is always the risk, when one makes
inquires mainly based on a single data point.

Ignoring the '90 data point, the striking feature we are left with is
the increase of land values in tune with the McSharry reform. Perhaps
we could give that some more attention, what say you?

ignoring data that does not fit you preconceptions has a long and
ignoble history, massaging the figures to fit is a traditional political
pastime.
It would be far more sensible to wonder whether land prices and rents,
on a small heavily populated island, actually bear much relationship to
agricultural profitability.

Indeed the only reason for chosing these indirect measures of
profitability is that the direct measures don't give you the answer that
you want.


--
Jim Webster

"The pasture of stupidity is unwholesome to mankind"

'Abd-ar-Rahman b. Muhammad b. Khaldun al-Hadrami'

Torsten Brinch wrote in message
...
On Sun, 29 Dec 2002 07:44:21 +0000 (GMT),
("David G. Bell") wrote:

On Sunday, in article

"Torsten Brinch" wrote:

Such indication of a relatively constant agricultural value of land
is a surprising result, when other indicators indicate that farm
profitability has dropped like a rock in the same period.

Now you know why Savills are referred to by some as the "Mayfair
Mafia".

"Overall investment returns from UK farmland have now out-paced
equity returns over the last three, five and ten years. The annualised
return to let land investments over the last ten years has been 12.6%
per annum. Following three years of negative returns from 1985-87,
which still depress the long term results, returns to farmland
investments have been consistently positive, despite the adverse
conditions for British agriculture. The inflation adjusted ten-year
annualised real return to let land investments has been a remarkable
10.1% a year." (quoted from IPD UK Let Land Index 2002)

which shows that let land investments show no real relationship to farm
profitability.


--
Jim Webster

"The pasture of stupidity is unwholesome to mankind"

'Abd-ar-Rahman b. Muhammad b. Khaldun al-Hadrami'

"Gordon Couger" wrote in message
news:TCwP9.487472$WL3.127241@rwcrnsc54...
We can get along fine with out clerks, barbers, and a great many service
industries but we can't get along with out food. While the direct sales
may
only be less than one precent the industry that that is built on food,
feed
and fiber production one of the largests industrise in the world.

You can't separerate faming from the rest of agri business. It comes as a
set if you break one part it all sufferes.

Exactly the way I see it!

M

Michelle Fulton wrote in message
.com...

"Gordon Couger" wrote in message
news:TCwP9.487472$WL3.127241@rwcrnsc54...
We can get along fine with out clerks, barbers, and a great many
service
industries but we can't get along with out food. While the direct
sales
may
only be less than one precent the industry that that is built on
food,
feed
and fiber production one of the largests industrise in the world.

You can't separerate faming from the rest of agri business. It comes
as a
set if you break one part it all sufferes.

Exactly the way I see it!

ah but that isn't a european perspective.

In Europe at the moment the chattering classes seem to have a problem
with agriculture, our current UK government does seem to have a strong
dislike for the whole sordid business.

There is some discussion as to why they have this attitude, a lot of it
is probably a hang up from the old class war politics, some of it might
be that it is an industry they cannot control because they cannot afford
to police it , and reality always steps in anyway.

Who knows


--
Jim Webster

"The pasture of stupidity is unwholesome to mankind"

'Abd-ar-Rahman b. Muhammad b. Khaldun al-Hadrami'


M

"Jim Webster" wrote in message
...


ah but that isn't a european perspective.

In Europe at the moment the chattering classes seem to have a problem
with agriculture, our current UK government does seem to have a strong
dislike for the whole sordid business.


I suspect that they see it as a very difficult topic. Subsidese, world trade
, environment and health make it a very thorny set of issues. So many
interest groups that it is impossible to resolve and plenty of blame if
anything goes wrong.


There is some discussion as to why they have this attitude, a lot of it
is probably a hang up from the old class war politics, some of it might
be that it is an industry they cannot control because they cannot afford
to police it , and reality always steps in anyway.

I am not sure it is class war, I think a lot of working class folk in coal
mining, motor industry etc are resentful that farming has been treated
differently. At the end people see a pleasant environment and compare with
their inner city conditions. Consider that a villiage near to London has the
very rich and farmers living in it. Farmers live where the very rich choose
to live.
The rest is ignorance, many people do not know much about food production
so their views are stereotypical.
Most buy food and holidays in the same manner. The living standards of
British farmers or Spanish hotel maids are probably of little thought to
them.
When you go out and buy that GPS bolt on goody for your tractor do you
worry that most of the cost is born by the American taxpayer in maintaining
the sattelites or that Chinese near - slave labour is exploited in it
manufacture. I suspect you give it little thought and get on with your own
difficulties and responsibilities.
The rest of us tend to be the same, pop into Tescos and not think of how it
all came to be there.

In article ,
says...
On Sun, 29 Dec 2002 11:54:53 -0000, David P
wrote:

In article ,
says...
On Sat, 28 Dec 2002 20:12:39 -0000, David P
wrote:
I need to be slightly more careful than usual here. It may be said that
the rent under an AHA is a more accurate representation of the
agricultural value of the land. The rent has to have regard to the
productive capacity of the land and its related earning capacity.

In this respect I would suggest that it may be the best guide to where
the value of purely agricultural land should lie. ..
..
FPDSavills Estate Benchmark survey AHA rent settlements time series:
(£/acre, cvt. read from graph)
1996: 47
1997: 52
1998: 65
1999: 68
2000: 65
2001: 62
2002: 58

Such indication of a relatively constant agricultural value of land
is a surprising result, when other indicators indicate that farm
profitability has dropped like a rock in the same period.

I don't find it at all surprising. In the real world it costs the tenant
to fight for a reduction in the rent he pays. He will have the costs of
an Agent to stand and may also have to bear the whole or part cost of an
Arbitration. This likely cost may mean it is not be worth his while
pursuing an attempt to reduce the rent paid. Note also that the rent
review cycle is 3 yearly - and that 99 - 2000 shows a very significant
drop in rent.

I am not sure you meant to write 2000 there.

Yep - typo, should have been 2002

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.

I would like your opinion on why FBT rents appear to be tracking the
agricultural value of land even more poorly than AHA rents. They
would, if I understand the arrangement. come closer to open market
values and be more frequently subject to renegotiations.

The reviews in FBT's can be very wide. The rents may be increased on say
5yrly cycles or whatever other cycle is agreed upon from the outset.
Similarly they may be based, at review, on some totally artificial
mechanism that was, again, agreed at the outset.

It is my experience that the early FBT new lets were showing higher
levels than the more recent FBT new lets.

The is also the 'marginal cost' argument to consider. The adjoing farms
may be on the point of running at less than the two men they currently
have [say i.5 men]. It can be difficult to employ just the 0.5 when he
is needed. Hence, to retain the second full man they take on extra land
over which they can spread the costs of their present labour/machinery.


--
David
Visit http://www.farm-direct.co.uk for your local farmgate food supplies.
FAQ's, Glossary, Farming Year and more!

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"Torsten Brinch" wrote in message
...
On Sat, 28 Dec 2002 17:13:46 -0000, "Michael Saunby"
wrote:

the world would be economically
much stronger if the world's farmers only produced about 30% of the food
that is actually needed - i.e. enough to feed everyone in the west, and
no
more. The only problem that then remains is what to produce, where, and
how it gets distributed without some crazy Robin Hood type trying to
give
it to the poor.

There is no need to reduce farm production, if we just waste more
food. This will for obvious reasons inflate demand relative to supply.
just as good as reducing production.Now, this means less farm subsidy
will be needed, because the farmer is able to sell more of his
product. Farm subsidy comes from your taxes, so this means your taxes
will be less.

UK taxes exist for two purposes, but in many forms. They exist to fund
essential (and some not so essential) services and to redistribute wealth.
We have very many taxes, again for two purposes, one is to make the taxes
fairer - i.e. to punish (e.g. tobacco) those who do bad thing, and reward
those who do good things. Farm subsidy for the most part is provided by
income tax - i.e. it is a tax on the rich. The payments, in the past,
ensured basic food stuffs were available in great quantity at low prices -
i.e. the provided most benefit to the poor. Of course the payments went
via farmers, who took a cut, just as our doctors providing state health
care are also quite wealthy.

The farmers will attempt to produce more to satisfy the
artificially inflated demand. By increasing the production, the
farmers will get lower relative overhead per unit of production. The
lower production costs will reduce the cost of food. The lower food
prices will then allow the poor to afford more food with the same
money. Therefore, wasting food feeds the poor and lowers your taxes.


So who will waste food, and how much will we have to pay them to do this?
I can see a new tax might be needed.

Michael Saunby

Michael Saunby wrote in message
...
So who will waste food, and how much will we have to pay them to do
this?
I can see a new tax might be needed.

obviously this new tax will need more officials to both collect and
monitor them, and will therefore create employment and will doubtless be
"a good thing".


--
Jim Webster

"The pasture of stupidity is unwholesome to mankind"

'Abd-ar-Rahman b. Muhammad b. Khaldun al-Hadrami'


Michael Saunby

On Sunday, in article

"David P" wrote:

The reviews in FBT's can be very wide. The rents may be increased on say
5yrly cycles or whatever other cycle is agreed upon from the outset.
Similarly they may be based, at review, on some totally artificial
mechanism that was, again, agreed at the outset.

It is my experience that the early FBT new lets were showing higher
levels than the more recent FBT new lets.

The is also the 'marginal cost' argument to consider. The adjoing farms
may be on the point of running at less than the two men they currently
have [say i.5 men]. It can be difficult to employ just the 0.5 when he
is needed. Hence, to retain the second full man they take on extra land
over which they can spread the costs of their present labour/machinery.

There is a lot of potential for Special Circumstances. I've heard
indirect reports of more than one case where a small piece of land on an
FBT allowed two parts of a large farm to be connected without use of the
public highway. One instance was a livestock farmer, and the shibboleth
of "biosecurity" was mentioned. The other was arable, and there was
expected to be a saving on vehicle insurance.


--
David G. Bell -- SF Fan, Filker, and Punslinger.

"Let me get this straight. You're the KGB's core AI, but you're afraid
of a copyright infringement lawsuit over your translator semiotics?"
From "Lobsters" by Charles Stross.

"David G. Bell" wrote in message
.. .

There is a lot of potential for Special Circumstances. I've heard
indirect reports of more than one case where a small piece of land on
an
FBT allowed two parts of a large farm to be connected without use of
the
public highway. One instance was a livestock farmer, and the
shibboleth
of "biosecurity" was mentioned. The other was arable, and there was
expected to be a saving on vehicle insurance.

FBTs are supposed to allow for all sorts of things, for example the use
of land for non-agricultural or at least non-traditional uses. I thought
that theory was that such things as Car Boot sales, equestrian centres
etc could be built in as part of the tenancy of the farm, while still
continuing to be a farm and predominantly agricultural operation.
--
Jim Webster

"The pasture of stupidity is unwholesome to mankind"

'Abd-ar-Rahman b. Muhammad b. Khaldun al-Hadrami'

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?

I would like your opinion on why FBT rents appear to be tracking the
agricultural value of land even more poorly than AHA rents...

The reviews in FBT's can be very wide. The rents may be increased on say
5yrly cycles or whatever other cycle is agreed upon from the outset.
Similarly they may be based, at review, on some totally artificial
mechanism that was, again, agreed at the outset.

It is my experience that the early FBT new lets were showing higher
levels than the more recent FBT new lets.

[That is correct. From the data I have seen, it can well be argued
that the FBT rents in the most recent year appear to track the
agricultural value of land no worse than AHA rents.]

The is also the 'marginal cost' argument to consider. The adjoing farms
may be on the point of running at less than the two men they currently
have [say i.5 men]. It can be difficult to employ just the 0.5 when he
is needed. Hence, to retain the second full man they take on extra land
over which they can spread the costs of their present labour/machinery.

Thank you for your comments to the FBT question.

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?

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.


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.
--
David
Visit http://www.farm-direct.co.uk for your local farmgate food supplies.
FAQ's, Glossary, Farming Year and more!