Home Truths

Second farms abroad may be the latest craze, says Edel Morgan

WITH THE Irish property market slow maybe Farm Hunters in the Sun would be a good idea for a new property TV series. If a press release I received from a company called Provence Invest is to be believed more Irish farmers are considering either abandoning the old sod and relocating or investing in second farms abroad.

Some farmers are already delving into the Argentinian and Bulgarian markets but according to Provence Invest (www.provenceinvest.com), more are looking at France because it supplies 23 per cent of agricultural produce in the EU and has land prices ranging from €3,000 to €7,000 per hectare compared to an average of around €16,200 per hectare in Ireland, according to 2004 CSO figures - Irish prices are now estimated to have risen to over €20,000 per hectare.

France also receives almost twice the direct farming subsidies of any other EU member state, although the lion's share goes to larger farms. Tess Sheeran of Provence Direct says she had a stand in the property tent at the National Ploughing Championships in Tullamore last year and was inundated with queries from farmers about French landholdings - even though farms were a small part of her business at the time.

She has since made it a substantial part of the business and, as well as finding suitable farms, the firm guides clients through the legal process of buying. Only bone-fide farmers need apply however. Burnt-out city types with visions of being a village squire will be politely told to dégage (beat it) by Safer, a group of non-profit making limited companies throughout France which controls the sale of land and was set up by the government to combat land speculation and prevent the break up of viable farms.

Sheeran says their Irish clients are generally looking holdings in the €300,000-€1m range with some planning to travel between their farms in Ireland and France - more feasible with tillage and crop farms than dairy - and others intending to rent the land for a period. Other clients include horse breeders and trainers, or farmers looking for land further south with gîtes so they can branch into tourism.

There are 1,200 farms on the market in France but landholdings tend to be small. Most of the larger holdings are in the north where land prices are highest at over €5,000 per hectare. Tillage and cereal crop farms in sunny Gers near Toulouse in the south are popular with Irish farmers with prices from around €3,500 per hectare but holdings of over 200 hectares are hard to find.

And finding a farm doesn't mean you can buy it. Safer has to approve your "project" and will give priority to a local farmer who wants the land. If you get approval and buy, Safer's intervention fee and stamp duty come to around 10-12 per cent, from which Provence Invest take a percentage.

But what of the drawbacks? Provence Invest contends there are none if a farmer goes about things properly. But, according to website indigoguide.com, there can be "a low success rate" for foreign buyers "mainly due to under-capitalisation and the hostility of the locals towards strangers, particularly in the most remote areas". It's easier for non-farmers to buy vineyards, but they will need to hire experienced staff and be prepared to battle against the elements for a successful crop.

It can be difficult to get a loan from French banks for land so many buy the farm building and rent the land and anyone looking to make big short to medium term capital gains will be disappointed. But for the right people there are incentives to buy farms, particularly if you are under 35.

Niall Madigan of the IFA says he has heard of farmers relocating abroad "but not necessarily in great numbers. People are investing abroad but not necessarily selling up here, they are putting a farm manager in, and sometimes they invest in groups."