BIDDING FOR OPTIMISM AT A FARM MACHINERY SALE

The role of a land agent is nothing if not varied, and one of the most exciting parts of the job is conducting the occasional farm machinery auction.  As reported in these pages last week, our most recent sale was at Manor Farm in Wood Norton, where a very wet and windy Thursday saw more than 250 buyers from as far afield as Nottinghamshire, Lincolnshire and Essex brave the weather to bid for a huge range of agricultural machinery.

The sale was brought about by the retirement of the third generation of the Crowe family which has farmed the land for more than 80 years.  With no one in the next generation able to take on the 350 acre farm, both the land and the machinery are being sold.

Although inheritance is not the driver in this particular case, it is a very good example of the kind of typical family farm which is going to be affected by the changes in inheritance tax announced in last year’s budget. 

Government sources have been quoted as saying that upwards of 75% of family farms won’t be caught by what has come to be known as the ‘family farm tax’, but examples like Manor Farm suggest that that figure is wildly optimistic.

350 acres is certainly not a large holding for a family concern, and yet the sale value of the land and the machinery is around the £5 million mark – five times the £1 million threshold announced by the chancellor last October.  This is the real value of a sale which is in the process of going through, not some ‘guesstimate’ on a Whitehall spreadsheet; it shows just how many similar family businesses could end up being caught by the inheritance tax trap.

With a very uncertain mood in agriculture, will politicians take any notice of this as we head towards this year’s Budget?  Don’t hold your breath.

It’s an ill wind which blows no-one any good, of course, and while dealers in new equipment may be having a thin time of it at the moment, there is a thriving market for second-hand equipment, as the brisk bidding at last week’s auction showed.  Farmers still need the kit to get the job done, and with wafer-thin margins, buying at auctions is proving popular.

On a personal note, the sale marked a milestone for me, when I accepted a bid for a tractor from the fourth generation of a family to which I have sold during my career.  Just as I have worked with the Crowe family for four decades, farming is often about long-term relationships.  So perhaps we just have to be optimistic that farming will get through the current crisis and still be going strong for many more generations.