According to Defra, Farm Business Incomes were higher across
most sectors in 2011/12 than in the previous crop year (2010/11)
and significantly better than in 2009/2010 across all sectors
(see Graph 2). This was generally because of increased output (yields and prices) although the results were tempered by increased input costs. In line with these results our survey confirms that the agricultural assets of rural estates continued to perform well.

Average income from all agricultural sources on ’All Estates’ rose by 6.9% in 2012 to £71 per acre (£175 per ha) and represented 35% of gross income. Looking specifically at the let area of the average estate, income from all let agricultural sources in 2012 increased by 4.5% to £82 per acre (£203 per ha).

In hand farm incomes (net income after deduction of property repairs, insurance, third party rents and interest on borrowed working capital) on ’All Estates’ rose by 19% to £132 per acre (£326 per ha) in 2012 and similarly income from contract farming (’All Estates’) enterprises increased by 47% to £179 per acre (£442 per ha). Despite the overall increases noted above and our knowledge of ‘settled’ rent increases in the survey year, growth in the agricultural rental sector in our survey remained muted:

• Agricultural Holdings Act (AHA)rents on ‘All Estates’ strengthened by 0.5% during 2012 to £70 per acre (£173 per ha).

• Farm Business Tenancy (FBT) rents on ‘All Estates’ increased by 1% in 2012 to £92 per acre (£227 per ha). Graph 6 illustrates average rents by farm type.

A closer analysis of our survey data suggests that dynamic and proactive estate management is resulting in tenancy restructuring, which is beneficial to both tenant and landlord. However, this is not being translated into increases in average passing rents across the average estate in the survey. This suggests that reversions to FBTs or taking land or cottages in hand tends to dilute any settled rent increases, resulting in the relatively stable average rental levels recorded in our survey.

This is also reflected in the stable average surplus (after property repairs, share of general estate repairs and other expenditure including management costs) of 54% recorded for let agricultural property on ‘All Estates’ in 2012 compared with 2011.

Taken from
Estate Benchmarking Survey 2012