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Farm fears as investors buy land
Credit: By Victoria Allen | Scottish Daily Mail | 23 August 2013 | ~~
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Scots farmers are being priced out of the market for land as hedge funds and wind farm developers snap up agricultural areas, it has been claimed.
A report from the Royal Institution of Chartered Surveyors (RICS) shows that the price of farmland is at a record high, almost trebling in the past decade.
In the first six months of this year, prices soared to £4,438 an acre, driven up by the investment of non-farmers.
While Scottish house prices have slumped, farm land has kept its value, making it a lucrative asset for hedge fund owners and pension funds.
Meanwhile, high subsidies available for wind turbines tempt many farmers to buy new land or lease existing fields to developers. There are fears that grocery prices could spiral as land is no longer used for food production.
The RICS figures show 11 per cent of farmland sold in the first six months of the year went to purchasers outwith farming and agribusiness, compared to only 1 per cent in the same period last year.
A National Farmers Union of Scotland spokesman said yesterday: ‘There is always going to be a natural tension between farming and land being used for renewables, carbon offsetting and development.
‘There is a shortage of land for young farmers wanting to get a foothold in agriculture. Our worry is that the farming i ndustry can continue as a going concern.’
Hedge funds and pension funds are snapping up farmland for their portfolios as a ‘safe haven’ asset to sell later.
Lifestyle farmers are also buying up smallholdings and families are purchasing land to build their own homes, according to RICS.
Sarah Speirs, director of RICS Scotland, said: ‘The growth in farmland prices in recent times has been nothing short of staggering.
‘In less than ten years we’ve seen the cost of a square acre of farmland grow to such an extent that investors – not just farmers – are entering the market.’
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