OPINION – The Tale of Three Quotes – Duncan Howie

Much is being written about the perilous state of UK agriculture. On the standard UK farm, outputs are not enough and inputs are too high to make a profit. This gap that was historically cushioned by subsidies has been fully removed. Seismic enough on its own, it is dwarfed by the soon to be ‘Family Farm Tax’. Upon death, the farm will soon be taxed handsomely, and will now include silage in the clamp, grain in the shed and machines in the yard. It is a double whammy of loss of subsidies and a tax raid.

Being starved of cash and with the metaphorical tax bandits on the horizon, it is a circling of the wagons moment and there will be some casualties! To brood on these changes I draw on three quotes as a way of considering the changes ahead.

Quote one

‘The crops realised thirty-six pounds an acre, which was at least three times the freehold value of the land’ – This is from Farmers Glory by A G Street (published 1932) but the quote recounts the sale of vetch in 1918.

We need to consider that it has only been since 2008 that we have had a massive spike in land prices. I’m not saying they will drop but to compare the above quote to today’s prices, it would mean wheat would be circa £7500/t. The point to consider is that things change and how many factors are holding land up at the post 2008 values

Quote Two

‘Holland produces a Gross Value Added from agriculture roughly equivalent to the UK from a tenth of our farming area. It is the world’s second largest food and drink exporter after the USA. It is also one of the most urbanised nations with a much lower proportion of rural land than the UK. Yet, Dutch farming’s 1.6 per cent of GDP is three times that of the UK’ – Jeremy Moody. Secretary of the CAAV blog 30th May 2025.

The point to ponder is, can total output really be pushed by driving arable yields? What else could we do with the land? Are we able to lift output from farm (and in this context let’s not just consider food stuffs) and if we, the owner/occupier are unable to, can others with specialist skills and access to capital utilise the land to a greater extent. I’m not saying sell up, but what other higher value activities can be yielded from the current farm asset and who is best to do it? This could be specialist poultry, glamping, renewables, or commercial tenants.

Quote Three

‘Be cautious when others are greedy and be greedy when others are cautious’ is the famous quote attributed to Warren Buffet.

At Howie, Kent & Co we are uniquely placed to help farmers, to be the bridge to developers and tenants who want to get to land and buildings. Now is the time to make the bold moves and do what needs to be done to keep the farming business alive. If you have something that’s profitable (or just about profitable) then double down on it as there are cautious waters ahead.

This sadly is my rather gloomy end of year reflection, but hopefully a couple of thoughts to contemplate!

Merry Christmas all.

Duncan Howie