Spotlight on the Queen’s Jubilee: seven decades of change in agriculture

0

When Queen Elizabeth II came to the throne in 1952 at the age of 25, Britons were still subject to rationing and the value of farmland stood at £78 per acre, then equivalent to £1,700 per acre in real terms . Today, 70 years later, the average value in Scotland is £5900 per acre, but we are facing another tumultuous period following the war in Europe.

As the Queen celebrates her Platinum Jubilee, the Savills Rural Research team took a look back at seven decades of change in agricultural landscapes:

1950s

Wartime agriculture produced innovations in mechanization and productivity, as well as medicines that contributed to a dramatic increase in the world’s population. Land was still frequently traded. In 1950 675,000 acres were bought and sold in England, while 1952-1958 saw stable vacant property prices of around £80 per acre, but our self-sufficiency was at its lowest with active free trade allowing many imports.

1960s

During the 1960s land values ​​rose steadily to just over £200 per acre and thus began a 30 year period of steady growth in value.

1970s

This rapid growth was checked in 1973/74 when inflation exceeded 24% and interest rates reached 12%. The price of wheat quadrupled during the 1970s, from £27 per tonne in 1970 to £105 per tonne in 1980. The UK joined the EU in 1973.

1980s

Wheat prices remained above £100 a tonne and average farmland values ​​remained relatively stable. Milk quotas and environmentally sensitive area programs were introduced during this period.

1990s

Average values ​​in Scotland soared in the early 1990s, even as interest rates hit 15%. Values ​​peaked at £1,600 per acre in 1997, the year the Queen celebrated her Silver Jubilee. Profitability has increased due to high wheat prices.

During this period, the real estate market has been buoyant and prime country houses have increased by around 10% per year. Farming fortunes plummeted in the following years when wheat prices fell below £60 a tonne.

2000s

In 2001, the industry was hit by foot-and-mouth disease and revenues continued their downward trend. In 2003, non-farm (lifestyle) buyers peaked at 45% of all buyers, marking the beginning of a weakening of the relationship between values ​​and productivity as demand diversified.

In 2005 the CAP reforms introduced the single farm payment and in 2008 we witnessed the ‘credit crunch’. Wheat hit £180 a tonne and the credit crunch-induced recession continued the upward trend in values ​​as investors looked to farmland as a safe haven. And in 2009, the BoE cut base interest rates to 0.5%, the lowest level in 135 years.

2010s

The 2010 Arab Spring saw oil prices peak at over $110 a barrel. Gold peaked at over $1660 an ounce. In 2012 wheat prices were above £200 a tonne.

At 89,000 acres, the amount of land publicly marketed across England in 2012 was the smallest since records began in 1995. In Scotland, 39,700 acres were marketed, which was above the decade average . Wheat prices fell below £120 a tonne in 2015, leading to the first signs of pressure on values ​​for 13 years.

The country’s decision to leave the EU in 2016 triggered the most significant changes in British agricultural policy during the Queen’s reign.

2020s

Market activity continued to shrink in response to uncertainty as British nations developed their future agricultural policies and post-Brexit trade relations were agreed.

England has announced an agricultural transition between 2021 and 2027 while Scotland and Wales have favored a period of stability before introducing new policies. The supply of farmland fell to record lows, totaling just 114,000 acres in Britain in 2020 and 17,500 in Scotland in 2020. In 2021, market activity was higher, with 27,300 acres marketed in Scotland.

The diversity of buyers in the farmland market has increased due to growing appreciation of the role land can play in helping the UK achieve its goal of net zero greenhouse gas emissions by 2050 through reducing emissions and offsetting carbon emissions.

The supply chain impacts of the Covid-19 pandemic and the war in Ukraine led to inflation and rising commodity prices in the UK; ammonium nitrate fertilizers peaked at £1,000 a tonne and wheat prices topped £300 a tonne.

Looking forward

Emily Norton, head of rural research at Savills, commented: “The years to 2030 promise to be transformational for UK agriculture. The shift in policy focus towards environmental outcomes also signals the arrival of new funds in the sector. The upheaval of the agricultural transition is tempered by the enormous enthusiasm of current and future farmers who see the opportunity before them”.

Luke French, from his Rural Agency business, added: “The Scottish farmland sector is going through a period of uncertainty and further change, but we expect land values ​​to rise as competition increases for all the services that the earth can provide.

Share.

Comments are closed.