The impact of long-term land leases on farm investment: Evidence from the Irish dairy sector

Bradfield, Tracy; Butler, Robert W.; Dillon, Emma; Loughrey, Jason

doi:10.1016/j.landusepol.2023.106553

Cited by 11 publications

(8 citation statements)

References 33 publications

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“…This result is likely due to the greater financial requirements of these systems. Notably, to maintain economic and technical competitiveness, farmers must invest in capital assets such as buildings, livestock, materials, and DTs (e.g., automated milking systems, sensors, GPS-enabled devices) [58][59][60].…”

Section: Trends In Farm Investment Research In Relation To Time Count...mentioning

confidence: 99%

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Farm digital tools: A systematic review of investments and environmental implications

Ben Jaballah,

Ghali,

Ben Arfa

et al. 2024

Resour. Environ. Econ.

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Farm-level investment in digital tools is often viewed as a necessary part of the agroecological transition. However, its actual relevance remains unclear due to currently ambiguous definitions of farm investments in general and equipment investments in particular. We conducted a systematic review of the farm investment literature to characterize the different categories of digital tools investments seen and to determine how often the environment is considered in this field of research. A total of 131 articles met our eligibility criteria and were subject to further analysis. First, we found that research on farm investments has looked at general farm investments, investments in combined factors of production, and investments in specific factors of production. Second, we discovered that there are four main investment categories for farm equipment (including digital tools). Third, we noted that few studies have addressed the environmental implications of investing in digital tools. Our findings emphasize that, to facilitate the agroecological transition, it will be important to promote broader strategies that encourage farmers to invest in digital tools.

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Section: Trends In Farm Investment Research In Relation To Time Count...mentioning

confidence: 99%

“…In crop production, the most common combination of factors includes land, equipment, machinery, buildings, and inputs [33,47]. In arboriculture, the cost of plantations is added to this group [88][89][90]; in animal production systems, the cost of acquiring animals is included [58,67,91].…”

Section: Investments In Combined Factors Of Productionmentioning

confidence: 99%

Farm digital tools: A systematic review of investments and environmental implications

Ben Jaballah,

Ghali,

Ben Arfa

et al. 2024

Resour. Environ. Econ.

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“…Investment subsidies can play a vital role in overcoming the financial constraints faced by farmers while making investment decisions (Fertő et al, 2021). In Ireland, there is some evidence of an association between long-term land leasing and dairy farm investment in buildings and machinery as long-term leasing provides greater certainty to tenants relative to shortterm land rental (Bradfield et al, 2023). Similarly, the expectation is that the adoption of fixed milk price contracts reduces the uncertainty of milk revenue.…”

Section: Farm Investment Decisionsmentioning

confidence: 99%

Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms

Pardeshi,

Loughrey,

O'Connor

2024

GER J AGR ECON

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After the milk quota removal in 2015, the Irish dairy industry has expanded dramatically. Various economic, social and environmental considerations are part of farmer’s choice to invest and to expand. This study evaluates selected factors contributing to recent dairy farmer’s investment decisions and examines the relationship between the adoption of Fixed Milk Price Contracts as a risk management tool and farm investments. This research applies the two-stage residual inclusion approach to address this research question using Teagasc NFS data from 2016 to 2021. This approach is applied to control for potential endogeneity including risk aversion. The results point to the economic relevance of the FMC adoption towards farm investment decisions although the magnitude of the association is limited. Subsidies play an important role in the investment decision although they are a small proportion in the overall specialised dairy farm income and provide a relatively stable source of income in Ireland. We finally conclude that, there is scope to improve the design of these FMCs in terms of protecting farmers from drastic margin volatility and to increase the adoption rate

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“…To encourage landowners to rent out their land, they have to see letting as attractive; the use of income tax incentives is therefore an option that can be explored. Income tax incentives introduced in the Republic of Ireland have resulted in an increase in the number of registered long‐term land leases (Bradfield et al ., 2023). Although, with respect to Northern Ireland, an income tax intervention can only be undertaken at a UK‐wide level; we think that the recent review of the tenanted sector in England by Rock et al .…”

Section: Conclusion and Policy Implicationsmentioning

confidence: 99%

“…Agricultural land sales in Northern Ireland (NI), as in most countries in Europe are limited due to a number of factors including high transaction costs, taxation, difficulties in securing credit, as well as complex legal requirements (Bradfield et al ., 2023; Loughrey, Donnellan and Hanrahan, 2020). For example, the share of agricultural land sold between 2005 and 2015 in some selected EU countries was less than 1 per cent (Loughrey et al ., 2020).…”

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confidence: 99%

Barriers and Enablers of Long‐term Land Leasing: a Case Study of Northern Ireland

Adenuga,

Jack,

McCarry

et al. 2023

EuroChoices

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SummaryLong‐term land leasing offers a viable alternative to land ownership in relation to increasing efficiency of agricultural production, economies of scale, and delivering environmental improvements in terms of land management. However, with no significant tenanted sector in Northern Ireland, access to land via long‐term land leasing is limited. This study analysed the barriers and enablers of long‐term land leasing. To achieve our objective, we employed a mixed methods approach. The results show that the main barriers to long‐term land leasing were environmental concern (around how the land will be managed), inheritance tax implications and the potential effect of long‐term land leasing on future succession plans of the farm business. We also found that as much as 70 per cent of the farmers surveyed believe the inclusion of a ‘break clause’ and the introduction of income tax incentives will encourage the adoption of long‐term land leasing, while 61 per cent of the farmers stated that the environmental management of the land will encourage long‐term land leasing. The study concluded that any model designed to encourage long‐term land leasing in Northern Ireland should include clauses which cover the environmental management of the land and break clauses. Income tax incentives for landowners could also be considered.

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The impact of long-term land leases on farm investment: Evidence from the Irish dairy sector

Cited by 11 publications

References 33 publications

Farm digital tools: A systematic review of investments and environmental implications

Farm digital tools: A systematic review of investments and environmental implications

Farm Investment and Adoption of Fixed Milk Price Contracts on Irish Dairy Farms

Barriers and Enablers of Long‐term Land Leasing: a Case Study of Northern Ireland

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