Is now the time to invest in Agriculture?

With diversification of farmland at an all time high, is now the right time to consider investing in agriculture?

According to Savills research (Jan 2022), change in sentiment saw farmland values growing strongly throughout 2021, while supply continued to remain stubbornly low.

But what is driving this growth in sentiment?

Of course, farm and estate land presents investment potential that is high in ESG rating, an attractive opportunity for investors who see that global regulatory accountability for environmental impacts is shifting. And the focus on decarbonising the economy means the demand on farmland for alternative uses  and diversification is huge.

Environmental concerns are expected to overtake the traditional methods of agricultural income. Renewable energy, tree planting & rewilding schemes will increase the lack of supply of farmland further.

According to government figures, 62 per cent of UK farmers are having to diversify alongside running a traditional working farm.

The rise in Staycations over the last two Covid-19 years has seen increased demand for holiday lets, and working farms are seen as a novel way to holiday in the UK and keep animal loving children occupied.  Tourism and events also provide diversification opportunities for farmers to use redundant buildings and land for non-agricultural purposes.

From luxury glamping, pitches for camping and campervans as holiday accommodation for tourists, to alternative wedding and party venues, farmers are quickly realising that there are alternate oncome streams to subsidise conventional farming.

Farmstay is a not-for-profit, farmer owned consortium, which charges a flat rate for membership according to the size and number of rooms on offer to tourists.  The main objective of Farmstay is to more effectively market the accommodation provided by its members to help increase occupancy rates and incomes, through its website, reinvesting any profits back into the community.

With the Government’s ambitions to create more woodlands, protect UK peatlands and boost biodiversity, and a focus on new measures to increase tree planting in the efforts to reach net zero emissions by 2050, a plethora of funding is available for tree planting.

Under the new target, approximately 7,000 hectares of woodlands will be planted per year by the end of this Parliament (May 2024)

The NFU itself launched the NFU tree strategy in July 2021, setting out the opportunities for the farming industry and their vision for woodland creation, hedgerow planting and management, tree in the wider landscape and afgroforestry.  They believe that farmers play a vital role in tree planting and provide multiple links to government funding available to farmers to support the initiative, as well as urging the government to address existing policy barriers such as tenancy clauses that prevent up to 30% of agricultural land from engaging in tree planting.

Opportunities in agriculture and landed estates are plentiful, and with multiple taxation benefits such as IHT relief on agricultural property relief associated with the Traditum Agricultural Partnership fund, and the ability to roll over capital gains into the investments in UK agriculture, it’s the perfect time to find out more about investing in agricultural funds.

To find out more, contact David Mitchell on 07939 151424,  or email us at hello@traditum.co.uk.

References:

https://www.savills.com/research_articles/255800/323609-0

https://www.nfuonline.com/updates-and-information/tree-planting-schemes-for-farmers/

https://www.farmstay.co.uk