August 8, 2007

Madness behind the Irish plantation of England

Posted in Celtic Tiger · 8 comments ·

The Irish plantation of the English countryside is in full swing. It is hard to know what Elizabeth the first — the instigator of the plantation of Ireland — would make of it.

Today, Irish Catholic farmers — descendants of those dispossessed in the Tudor conquest of Ireland — are the largest foreign buyers of English farmland. According to Frank Knight, the British estate agents, 7.3pc of agricultural land bought in England last year was snapped up by Irish buyers.

This is an extraordinary statistic.

The Catholic Gael invasion is turning history on its head. Our story centres on land and religion: the Protestant English took it and the Catholic Irish lost it.

At least this time around, the Catholics have the decency to pay for the land they are taking. English farmland is selling for £3,800 an acre — up 27pc on last year.

But this is still a fraction of the cost of Irish farmland, which is trading at €24,300 an acre. Taking exchange rates into account, Irish farmland is over four times more expensive than its equivalent across the water.

As a result, farmers are selling up here and, with the swag, buying much larger tracts in England.

The EU farm policies work more or less the same in every country, so the Irish farmers are simply transferring production to England and using the much larger farms to engineer economies of scale.

This is a great example of how the EU could work, and mirrors developments in the US more than in the rest of Europe.

Typically in Europe, farming is cultural and farm mobility is non-existent. Irish farmers are also the biggest investors in Scotland, which is ironic when you think that the last great land-grab in these islands was by lowland Scottish farmers who led the plantations of Catholic Ulster in the 16th and 17th century. History aside, why are we seeing the Irish invasion of rural Britain?

Why might Irish land be so much more expensive than English land, rendering the investment decision of Irish farmers a “no brainer”?

Ireland is considerably less populated than England, suggesting that Irish land should be cheaper. Yet Irish land is four times dearer.

Could it be that the productivity of Irish farms is so much higher that we are getting four times more out of each acre of land here than the slovenly English yeomen who till the green pastures of Herefordshire?

There is no evidence of this. So how can land be more expensive in Ireland than in England without any significant differences in yields from farming? Irish farming uses the same technology and is governed by the same EU price systems. Irish wages are higher than English wages, so costs here must be higher, depressing yields further. What explains the price disparity?

The issue again is the ludicrous price of land in Ireland that is driving Irish farmers off the land, leading to the redundancy of the countryside. The reason is as much psychological as economic. We are trapped in a land frenzy. Even now, with house prices coming off the boil, the boom of the last few year’s has been so distorting that everything is out of kilter. Behind the frenzy, is planning.

The €23,800 per acre price tag owes a lot to the porous nature of our planning laws. Farmers have turned into developers, hoping to sell sites rather than work the land. Everyone who owns a piece of the countryside is praying that one day the land will be rezoned and be worth a fortune. This collective hope is putting upward pressure on agricultural land even when the yield from farming is falling.

This carry-on implies that the Irish planning system is so unclear that everyone with a bit of land is holding out for a windfall. Obviously, the opposite is the case in England, where agricultural land is farmland, full stop.

English zoning is so exacting that there is no hope that land will be revalued upwards at the stroke of a local bureaucrat’s pen. Taken together, the mania and the lax planning procedures are turning the Irish countryside into one large potential building site. Those Irish farmers who actually want to farm are emigrating, or at least taking their business off shore.

To use a popular business expression, Irish farming is being “outsourced”. How nonsensical is that? The Irish farmers in England are also using foreign labour to keep costs down. Like the situation in Ireland, farm labour in England is now largely Polish, Ukrainian or Lithuanian.

Farming in this part of the world has been given a shot in the arm by the mass influx of cheap labour from the East. However, the entry of the accession states is a doubleedged sword for agriculture. In the short-term, these workers bring down costs. But longer-term, the opening up of eastern Europe — by making more agricultural land available — must bring down the price of land.

In addition, the subsidies that the CAP afforded now have to be shared with farmers from the East. Therefore, in the next few years, the only way that Irish agricultural land prices can remain so expensive is if we abandon any vestige of zoning and build wherever and whenever we want. This can’t be what a country hoping to expand its tourist industry to high-end tourism really wants.

Meanwhile, across the water, Irish farmers will keep buying large tracts of the English countryside because that is the compelling logic of the Irish land mania. The Irish plantation of England will continue apace, but such agricultural imperialism is not a reflection of the strength of Ireland, rather a reminder of ludicrous state we find ourselves in.

  1. ronnie

    As a young man in mid twenties recently out of university I feel the older generation have screwed me and my peers. Land and housing is ridiculously overpriced by all metrics and the sooner this crash is over and sane prices return to market th ebetter for the nation and economy as a whole. You can’t export physical land/houses (oh wait the Swedes and Germans export prefabricated ones here) and our economy needs to get off its constrution/consumption binge and focus on exports/competitivness/efficiency in public sector and other economic fundamentals.

  2. john

    “Farming in this part of the world has been given a shot in the arm by the mass influx of cheap labour from the East. However, the entry of the accession states is a doubleedged sword for agriculture. In the short-term, these workers bring down costs. But longer-term, the opening up of eastern Europe — by making more agricultural land available — must bring down the price of land.”

    I don’t think this is necessarily true. One of the reasons for this is the restrictions on foreigners buying farmland there. In poland the authorities are more than happy with foreigners buying houses and apartments there but they will not allow foreigners buy farmland. In fact in many countries there are restrictions on farmland buying, in france only trained farmers are allowed buy farmland which explains the low prices there. In ireland of course it is a free for all, as you have pointed out, the lack of planning and controls has done alot of damage to irelands agriculture industry. I agree that irish farmland values are bonkers but worldwide farmland values will continue to rise. The original thinking was that eastern europe would decrease food prices due to the increased production and this did happen to a limited extent. However now food prices are on there way back up and this will push up farmland values wordwide just as they did in the 1970s (of course ireland is now outside this cycle so irish farmland will drop in price along with residential property)

  3. SpinstaSista

    I was at school with people who sold their farms in Laois, Kildare, Carlow and Wexford for unprecedented sums. They upped sticks and went to places like France and Canada because their farms in Ireland were worth a lot of money, but their farming profit margins in Ireland weren’t worth the effort.

    It seems that Irish land will either be built on by developers or taken over by factory farms while Irish farming folk sell up and move abroad to more farmer-friendly countries. I hope Ireland doesn’t become like parts of the UK where celebrities are buying up farms and country houses as lifestyle accessories. We should bear in mind that farming is not supposed to be a lifestyle, but a livelihood.

  4. Padraig Healy

    “I hope Ireland doesn’t become like parts of the UK where celebrities are buying up farms and country houses as lifestyle accessories.”

    Replace celebrities above with property developers who stock the farm with pedigree cattle which in some cases are badly mistreated due to absence of said property developer. The flipside of this is that the Artifical Insemination business for pedigree cattle is booming, if you’re into that kind of thing !

  5. Neil

    I lived in the american midwest for a couple of years after uni. It was quality because you could rent a huge a house (think Waltons) for $500 pcm in 2002. We had a blast, earned as much as we did in Ireland and all that.

    Cleveland had incredible housing stock some of which dated from a time when due to the heavy industry on the cuyahoga and Lake Erie, real estate there was once some of the most expensive in the world.

    Years later, with generations of brain/entrepreneur drain to the coasts there was a charm to the place but no buzz.It felt and feels like the party has been and gone.

    Is this the future for Ireland?

    If the farmers can just sell up and move on it won’t be much of a wrench from a box in Dublin.

  6. Declan

    There are many cause factors here. And to be honest David, I think you should have brought your notebook down to the Blessington or Kilkenny Mart and discussed this with the farmers. First farming in England has literally been castrated by the UK government, because they are obsessed with keeping food price inflation low. This enables the Bank of England to facilitate residential property mania. This has driven down the price of farmland, and there is the feeling amongst Irish farmers that agriculture in Britain has to be at the bottom of the curve, and ‘could only get better’. Second, environmental controls are obsessively nutty in Ireland, with the Irish officialdom going much further than EU legislation requires. Irish agricultural policy has become infleunced by ridiculous concerns like the creation of jobs for numerous inspectors, testers, officials etc, whose main achievement in life is membership of the same golf club that most of the local Cumman of Fianna Fail use. Basically Irish farmers have had enough of Irish bureacracy, and have chosen French, British and Canadian Bureacracy instead.
    Third, England has better land. And England has a serious dearth of young people who are willing to work the land.
    Lastly, the people buying land in Ireland are well heeled property developers, who literally have too much money. They do not know anything about farming. They rent it to farmers, and build a McMansion in the middle of it. If you drive around the Midlands, you will see this. The local politicians allow this. It is reckless. In most EU countries agricultural land can only be purchased by people trained to grow food on it. In Ireland cairde Fianna Fail, and the other parties as well, have made sure that this type of idea is dropped.
    Irish farmers are used of dealing with UK business, and are not one bit timid when it comes to going to England and buying machinery and cattle. Many Irish farmers have relatives in England, and some of them even worked there when younger, to accumulate cash for hard times before 1972. It’s not like as if they don’t know what they are doing.
    In a decade, Ireland will see Polish people buy it’s land, and farm it. And in some rural areas, farmers are already marrying Polish women because they are more patient with the hard life, that Irish girls are no longer willing to tolerate. What is utterly amazing is the tolerance of English people, of foreigners buying their best agricultural land, when no other country in Europe would allows this. But for the moment, in the light of so much hunger in our world, somebody has got to ask questions about the settlement pattern in our fertile lowlands, and land use patterns.

  7. Dan Hayes

    David & Co.:

    Fascinating stuff. And I had thought the lunacy was only in America with the ethanol scam!

  8. SpinstaSista

    “And in some rural areas, farmers are already marrying Polish women because they are more patient with the hard life, that Irish girls are no longer willing to tolerate.”

    Irish women in the 20-40 age group who grew up on farms are not willing to put up with the thankless hardship some of their mothers endured. For years Irish farmers’ wives were an unaccounted for labour unit on the farm, and made a huge but unrewarded economic contribution to Irish agriculture. Some of these women don’t even have an old age pension in their own name. Instead their husband claims it for them and doles out money as he sees (or doesn’t see) fit.

    Once Irish farmers wives started working full time (and I don’t mean farm-friendly jobs such as teacher or milk recorder) their husbands started to feel the pinch. They would have had to pay somebody to do the work their wives previously did for nothing. Even though farm wives ploughed their salary back into the household, the returns from the land weren’t so high.

    I forgot to mention that nurses were always popular with farmers. One reason for this was that they had the skills to care for ageing parents. Nurse or not, the task of caring for ageing parents fell on the shoulders of the already busy farmers wife.

    Is it any wonder that Irish farmers daughters, seeing their overworked and unappreciated mothers, decided that they wanted better for themselves? Some have actively chosen the single life over their mothers’ lifetimes of drudgery. These unsung heroines of the land married for better and for worse at a time when divorce did not exist. Nowadays if the patient, hardworking Polish girl decides that her Irish farmer husband isn’t treating her properly, she can quite rightly ask for a divorce, and walk off with 50% of his assets in the process. Thankfully today’s farmers’ wives, Irish or not, have a way out if the going gets too hard, unlike their mostly Irish counterparts from the previous generation.

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