by Sebastian Parsons
Buying the farm
October 17, 2013 3:33 pm
Land, across the globe, is a hot commodity. It’s expensive to purchase because investors regard it as a safe haven for their money. Land is finite, and because of this, investors calculate that its value will never drop. In the face of this thinking, investors abandon normal business logic and pay prices for land they would not dream of paying for company shares or a commercial property. Throughout the recession of the last five years, the price of land has steadily risen as investors have sought to protect their fortunes by buying land.
Even before the recession, would-be farm owners struggled to get a foothold. It is often impossible for a farm to make enough money to afford to purchase its own land. Almost all farms, whether sustainable or intensive, make insufficient profit to pay the interest and capital on any mortgage they might take out on the piece of land they wish to work – even a mortgage that might cover as little as 20% of the land’s value would be likely unaffordable. The return on farmland is 1%, so if the land were valued ‘commercially’, it would probably cost ten times less: £500 per acre rather than the £5,000 it currently commands. This means that, with land costing from £5,000 per acre, taking up farming requires significant financial assets.
Somehow, the barrier of affordable land must be overcome; if not, then what is the future for sustainable farming? When farms disappear, our reliance on food imports increases and food security is threatened. In addition, according to the World Agriculture Report (IASSTD report) sustainable farming addresses “soaring food prices, hunger, social inequities and environmental disasters.” It is a critical issue to resolve in enabling the spread of sustainable food systems.
Farmland is precious, so we must safeguard what little we have. But what happens to farmland when the farmer grows too old to farm, or dies? There is no guarantee that the farm will survive, especially when such a large profit can be gained from selling land to investors, most of whom are unlikely to farm the land.
My family is acutely aware of the problems with succession. When I was a teenager in the 1980s, my grandfather, David Clement, sold his biodynamic holding, Broome Farm. The loss of the family farm was a great sadness, and it came about because of difficulties with the family members agreeing what to do when my grandpa retired. For over 50 years, the family farm had served as the headquarters of the Biodynamic Association, researching farming methods informed by philosopher Rudolph Steiner’s thinking on the restoration of soil fertility destroyed by modern agriculture. When my grandfather’s farm was sold, it ceased to be farmed biodynamically, and this successful sustainable approach was lost on that piece of land.
At the time, my two siblings, Tabitha and Sophie, and I resolved one day to buy it back. We never did get Broome Farm back. But in 2005, we purchased the freehold ownership of Rush Farm, set in a hamlet in Worcestershire, the heart of rural England.
Rush Farm is farmed by our parents, Anne and Adrian Parsons, and the 150-acre farm has thrived under the wise farming methods that my grandfather helped pioneer. Biodynamic preparations, special manures and composts stimulate soil life and have revitalised the heavy clay soils. The farm’s ancient woodland, restored wetland and grassland are a wildlife haven for rare insects, bees and birds. Rush Farm is a source of study for the Royal Society for the Protection of Birds, and is working to encourage lapwings and curlews. Certified by both Demeter as biodynamic and the Soil Association as organic, the farm produces 30 acres of cereals, and its traditional Hereford cattle and Lleyn sheep graze on the farm’s herb-rich pastures.
In 2011, I helped co-found the Biodynamic Land Trust with a number of people, including Martin Large, author of Common Wealth – for a Free, Equal, Mutual and Sustainable Society. The Biodynamic Land Trust was created in order to ensure a reliable and trustworthy landlord for farmers seeking to secure land. Land is obtained through donations from landowners, and is held in trust to be farmed biodynamically in perpetuity. Being involved with the farm trust brought to our attention alternative models of land ownership such as Fordhall Farm, saved from being sold to investors thanks to community shares being sold to 8,000 landlords. A new way to break the “land-as-investment” deadlock began to emerge. We began to think seriously about a new future for Rush Farm.
At some point, our parents, now in their 70s, will retire so we were well aware we had a succession issue to resolve in the near future. In addition, we knew from our family history the problems that succession can bring. We did not want to argue about Rush Farm and we did not want our children to have that burden either. In addition, we also have a great deal of money tied up in the land, earning an incredibly low return. It is, in a real way, a burden to care about the land and, as freehold owners, be responsible for it. We knew we could not afford to gift the farm into a trust, but we knew that we wanted it to be protected. We all agreed that the farm must remain biodynamic forever. A farm trust offering community ownership was the answer.
In 2012, we founded the Stockwood Community Benefit Society to offer co-ownership of our farm. Thanks to a mixture of loans and the sale of community shares, the trust can purchase the farm and its rural hub, becoming its new owner and manager. By legally enshrining our ethical values, the trust ensures the farm and its business park (of which more later) will be managed sustainably in perpetuity.
Rush Farm is a farm that anyone can invest in, from as little as £100. Unlike ordinary shares, community shares are not designed primarily to produce maximum profit for shareholders. Instead shareholders derive additional satisfaction from supporting and being part of an ethical enterprise. Investors in our co-owned farm become (one member, one vote) member shareholders; they also become a part of something bigger by helping to safeguard a traditional farm.
Future owners of Rush Farm will also be part of a unique slice of British farming history. Rush Farm (its farmhouse dates from the 16th century) was the original inspiration for farming drama, The Archers. Early episodes of the world’s longest-running radio soap-opera were written and recorded at our farm, and its snug featured as the Archers’ fireplace on a 1951 Radio Times cover.
Rush Farm has an additional special feature, the on-farm Stockwood Business Park with 27 offices and light industrial rental units, nestled in the south west corner of the farm. The British countryside may be green and pleasant but its economic health is ever-under threat. Our business park is a visionary model for farms because it brings community back to the countryside. Currently, Stockwood Business Park employs over 100 local people and generates £12 million a year, making it viable for locals to stay in the area. As well as providing a sustainably-managed business park with, for instance, shared recycling facilities; it also offers a Steiner Waldorf kindergarten.
In a virtuous circle, the business park brings a ready-made community to Rush Farm while its rental provides a regular income, which helps Rush Farm comfortably maintain its high environmental standards. Its annual rental has additional significance to co-own Rush Farm investors who can expect a 5% return, unusual for just-for-the-love-of-it community shares.
The loss of our grandfather’s farm taught us that ownership is no guarantee of a farm’s future. We sympathise with the Native American idea that land is not owned, but looked after by each generation to be handed to the next. A farm is a living ecological system, an organism in its own right, comprised of the complex interplay of soil, plants, animals, and human beings. A farm is more than a line on a balance sheet.
Share offer ends 31 October 2013. Find out more about Rush Farm and how to invest by visiting http://stockwoodcbs.org/
Photographs from top to bottom: Tabitha (on gate), Sophie and Sebastian Parsons, soil at Rush Farm, native Hereford cattle, Radio Times 1951 cover