Green technology may be a solution to rising land prices

Family farm businesses should consider increasing revenues by investing in anaerobic digestion instead of making “illogical” decisions to take on more land, claim EnviTec Biogas UK.
GWE Biogas, an anaerobic digestion facility based in Driffield.GWE Biogas, an anaerobic digestion facility based in Driffield.
GWE Biogas, an anaerobic digestion facility based in Driffield.

Land is often overpriced and rarely comes up for sale, and can see farmers making unwise purchases, said Mike McLaughlin, managing director of the firm, which builds and services anaerobic digestion biogas plants on farms.

Anaerobic digestion units are fed with sustainable crops such as maize and animal slurry to generate electricity, gas and heat which can be used on the farm and exported under the long-term and fixed Feed in Tariffs and the Renewable Heat Incentive to generate an income.

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Mr McLaughlin said: “There’s often a lot of pride at stake between neighbouring farms, sometimes almost subconsciously that can make one family unwilling to sell to another, which makes land scarce and helps push up prices.”

The result is that some families agree to buy at the inflated price, he said, while others take on land miles away and therefore incur extra costs to transport people, products and equipment, he said.

“Either way, they end up producing more goods that are subject to market volatility or that are low-margin or no-margin because of supermarket buying power.

“I appreciate there’s an element here of ‘he would say that, wouldn’t he?’, but investment in renewable energy from AD would often represent a much better commercial decision.”

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The technology holds particular appeal to farms that produce a lot of waste, such as those with large indoor poultry, pig or dairy operations, said Barney Kay, regional director of the National Farmers’ Union.

But Mr Kay said it was misguided to invest in the technology if crops have to be grown specifically to feed a facility, and while it was a great opportunity to embrace the green agenda, farmers should take into account the costs of employing someone to manage a facility at their farm unless they had a scientific background themselves.

“A farmer is an expert in growing things and looking after livestock so primarily their main aim is to improve that core business so spreading their fixed costs over wider acres may make sense to them in the long-term.

“There are other factors to consider other than land prices.”