Up on the farm
Sir: Simon Courtauld asserts ('Old money rivals new', 20 October) that 'farmland has fallen fourfold in value over the last decade'. This is nonsense: farm incomes have fallen sharply (the real net income earned by farmers and their spouses fell 60 per cent between 1978 and 1988) but farm land has kept its value. According to the Oxford Institute, the average price of vacant land in 1978 was £1,000 per acre; inflation from 1978 to 1989 was 131 per cent, so this corresponds to £2310 per acre at 1989 prices. Compare this with the latest prices achieved at auction, reported by the RICS and Farmers Weekly in Farmland Market: £2813 per acre for farms and £2505 for 'bare land'.
The explanation of this paradox must lie in the ability of successful farmers to exploit land sold by unsuccessful farmers going out of business without increasing their overheads, demonstrating once again that one man's ruin is another man's business opportunity. The land is worth more to an established farmer than it would be to a new entrant to agriculture.
The moral of this is that rich townies settling in the countryside should be confi- dent that farmland will hold its value. Indeed, with global warming, and world food stocks at a five-year low, Britain's farmers stand to benefit from a better climate and a sharp increase in world prices. Now could be a good time to buy. C. L. Hutton Squire
Holtby Hall, Northallerton, North Yorkshire
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