Reported on Mon, 13 Feb 2006

Entrepreneurs looking to move into or expand their farming businesses should take out a business loan to combat changes to the EU's Common Agricultural Policy (CAP).

Under new CAP reforms, farming rights to EU subsidies, Single Payment Entitlements, have been detached from the land, meaning that for the first time they can be traded as individual assets.

The Royal Institution of Chartered Surveyors' (RICS) quarterly survey for the end of 2005 reported that farmland prices had fallen by five per cent.

Despite this, the market for land with property and planning permission approved has continued to be healthy.

The survey reveals that the number of non-farming buyers on farmland now outweighs farmers and agri-businesses for the first time.

Sue Steer, a spokesperson for RICS, said: "A large proportion of buyers in the market seem to be families escaping to rural life. Land prices are starting to reflect the general financial pressures of farming, the returns from which have been steadily declining.

"The rising costs of energy are now contributing to this squeeze on incomes especially for dairy farms, who use the most."

A specialist low-rate business loan is a simple and straightforward way to combat new CAP reforms and rising energy prices, while at the same time increasing business productivity via new investments.

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