Conacre reforms have created a whole new

and positive effect on the land rental business, with a much higher proportion of land now available for longer time frames, of 5-15 years in duration.

From a grower’s perspective, there are many benefits, including a longer window for fertility building and yield improvement. From a landowners’ perspective, the attractions are more obvious.

However, as more and more land gets tied into leases, negative aspects are emerging and if the scheme is to have a long term future, these weaknesses have to be addressed.

The fundamental weakness is that, to date, all benefits of the scheme accrue towards the landowner, with consequentially more risk being allocated to the grower.

This risk is especially exposed when entitlements are part of the equation. The value of the entitlements are often bundled up with the rental value. So the grower leases land and entitlements from the landowner, and the landowner gets the value of the land and all their entitlements tax free, up to the prescribed limits.

This is not a requirement of the scheme, but market forces have dictated that it has become the norm.

I’m not sure the intention of the lease scheme was to allow people receive their Basic Payment tax-free, or that public money could be received without incurring any obligations in terms of cross compliance, but that is how it is turning out.

Another aspect of the scheme, again market led, is the fixed rates being agreed. The volatile nature of the sector is not taken into account, and it appears that lease values agreed are even higher than the conacre fees achieved previously.

A bit like the upward-only rent debacle for commercial property a few years ago, the value of a price of land is predicated on the ability of the land to produce profit by the lessee.

If the land is not making profit, demanding exorbitant leases fees for it is only hastening the inevitable collapse in agreement.

A throwback to the old conacre system that has continued into the lease agreements is the landowner is not given any encouragement to invest in their land, yards or buildings.

Again all costs are accruing to the grower, whose income from the venture is fully taxed. Land drainage has a minimum 10 year payback, fertility-building is also expensive and only makes sense over a much longer than most lease agreements.

Abandoned

The number of abandoned farmyards around the country covered in scrub with sheds falling down bears testament to this dynamic.

It is time for some guidance on how the scheme should be operated and how risk is appor- tioned, before it descends into chaos and disrepute.

But the bias of benefit away from growers and towards landowners is not unique to the land lease scheme.

It is endemic in the whole common agricultural policy (CAP). This stems from the fact that once any payment is available, whether it is the old area aid, suckler cow or beef premium right through to the current basic payment, the most benefit will always accrue to the landowners, as they are the holders of the most finite resource, the land.

That is the way of the world and many hours have been spent deliberating in Brussels to try and ensure that as much public money is channelled towards the grower and risk taker of the produce and away from