A comparison of farmland returns in Australia, Canada, New Zealand and United States

Rural land is still a major property asset class and rural commodity production is an important domestic and export market in all economies. This paper carries out a comprehensive analysis of both rural production and land prices in four major rural production countries. The study compares rural property values in Unites States, Canada, Australia and New Zealand over a period 1990 to 2005 and analyzes and compares the capital return and total return performance for rural land in these four countries. The analysis allows a comparison of farm land returns for both a subsidised and non-subsidised farming policy to determine if levels of farm support result in variations in farm profitability and therefore farm land values.

An Analysis of UK Farmland : 1981-2004

The importance of agriculture in many countries has tended to reduce as their economies move from a resource base to a manufacturing industry base. Although the level of agricultural production in first world countries has increased over the past two decades, this increase has generally been at a less significant rate compared to other sectors of the economies. Despite this increase in secondary and high technology industries, developed countries have continued to encourage and support their agricultural industries. This support has been through both tariffs and price support. Although the average farm production property may require this support to maintain long-term production, the better farms can actually achieve production levels and commodity prices that result in these units being competitive on a free market basis. This paper will analyse the total return performance of UK farmland over the period 1981-2004. This analysis will compare the total return from rural properties in the UK and compare this performance to commercial property returns (total, office, retail, industrial), equities and gilts over this 24-year period. The analysis will be based on the IPD UK let land index and the IPD property index. The portfolio diversification and risk-reduction benefits of UK farmland will be highlighted. The analysis shows that rural property has negative correlations with equities and gilts, as well as insignificant positive correlations with retail, industrial and office property. Rural property also provides portfolio diversification benefits.

The allocation of taxing rights of ship and aircraft leasing profits under Australia's tax treaties

The Australian Federal Commissioner of Taxation recently released Draft Taxation Ruling TR 2008/D3 with the stated purpose of clarifying ‘what profits derived from the leasing of ships or aircraft fall within the ship and aircraft articles of each of Australia’s tax treaties’. In particular, TR 2008/D3 explains the taxing rights over different types of leasing profits, such as a full basis lease in respect of any transport by a ship operated in international traffic and bareboat leases which are ancillary to the lessor transport operations of ships in international traffic. This article outlines the Commissioner’s views on the application of the standard ships and aircraft articles in the tax treaties to which it is a party as well as considering the major variations on the standard adoption. In doing so, guidance is provided as to the allocation of taxing rights of ship and aircraft leasing profits under Australia’s tax treaties.

The taxation of international maritime leasing profits : has the commissioners ship come in?

In light of McDermott Industries (AUST) Pty Ltd v Commissioner of Taxation, and Draft Taxation Ruling TR 2006/D8, this article considers the current Australian taxation position of profits arising from the cross-border leasing of vessels in the maritime industry. It focuses on the tax treaties to which Australia is a party, in particular the application of the business profits provisions of those treaties, and the deemed existence of a permanent establishment where substantial equipment, owned by a fiscal non-resident, is used within Australian waters.

New sale and leasing requirements for owners of swimming pools and their application to strata schemes

This article considers the changes to the Swimming Pools Act 1992 (NSW)(Act) which established a State-wide online register of all private swimming pools in NSW requiring pool owners to register their pools by 19 November 2013. Amendments to the Act introduced changes to the conveyancing and residential tenancy regulations to require vendors and landlords to have a valid Compliance Certificate issued for their swimming pool before offering the property for sale or lease. This article provides a brief overview of the new sale and leasing requirements effective from 29 April 2014, focusing on its application to lot owners within strata and community title schemes and other owners of water front properties with pools on Crown Land Reserves.

Ode to a Skylark: Agricultural intensification and farmland birds in the Baltic region

Intensification of agricultural land-use has been was shown to be the key reason behind declines in wildlife species associated with farmland. Accession to the European Union is regarded as a potential threat to the farmland biota of its new member states. In my thesis I looked at scenarios of agricultural development across the Baltic states of Estonia, Latvia and Lithuania, and the ways they are seen to affect farmed environments as a habitat of farmland bird species. I looked at the effects of major farmed habitats across the region, and assessed the role of spatial organisation of farmed habitats. I also evaluated the direction and magnitude of changes in bird communities following progression of farmland land-use from a relatively less intensive to the most intensive type within each country. Different aspects of the structural complexity of farmland were critical for supporting farmland birds. There was a clear indication that the more intensively farmed areas across the region provided habitat for fewer bird species and individuals, and intensification of field management was reflected in a tangible decrease in farmland bird abundance. The second part of the thesis, based on interviews in Estonia and Finland, is devoted to farmers interest in and knowledge of farmland wildlife, their understanding of the concept of biodiversity, and awareness of causes behind species declines. I examined the relationship between farmers interest and their willingness to undertake practices favouring farmland wildlife. Many farmers viewed biodiversity from a narrow perspective. In Finland farmers expressed higher concern about the decline in common farmland species than in Estonia. In both countries farmers rated intensification of agriculture as the major driving force behind declines. The expressed interest in wildlife positively correlated with willingness to undertake wildlife-friendly measures. Only farmers with agri-environment contracts targeted specifically at biodiversity were more knowledgeable about practical on-farm activities favouring wildlife, and were more willing to employ them that the rest. The results suggest that, by contributing to simplification of the farmland structure, homogenisation of crops, and increase in intensity of field use, EU agricultural policies will have a detrimental effect on farmland bird populations in Eastern Europe. Farmers are on the whole positive to the idea of supporting wildlife on their farms, and are concerned about declines, but they require payments to offset their income loss and extra work. I propose ways of further improving and better targeting of the agri-environment schemes in the region. I argue that with a foreseen tripling of cereal yields across the region, the EU Council s target of halting biodiversity decline in the EU by 2010 may not be realistic unless considerable improvements are made in conservation safeguards within the EU agricultural policy for the region.

Land leasing, land degradation and agricultural productivity in Finland

This study analysed whether the land tenure insecurity problem has led to a decline in long-term land improvements (liming and phosphorus fertilization) under the Common Agricultural Policy (CAP) and Nordic production conditions in European Union (EU) countries such as Finland. The results suggests that under traditional cash lease contracts, which are encouraged by the existing land leasing regulations and agricultural subsidy programs, the land tenure insecurity problem on leased land reduces land improvements that have a long pay-back period. In particular, soil pH was found to be significantly lower on land cultivated under a lease contract compared to land owned by the farmers themselves. The results also indicate that land improvements could not be reversed by land markets, because land owners would otherwise have carried out land improvements even if not farming by themselves. To reveal the causality between land tenure and land improvements, the dynamic optimisation problem was solved by a stochastic dynamic programming routine with known parameters for one-period returns and transition equations. The model parameters represented Finnish soil quality and production conditions. The decision rules were solved for alternative likelihood scenarios over the continuation of the fixed-term lease contract. The results suggest that as the probability of non-renewal of the lease contract increases, farmers quickly reduce investments in irreversible land improvements and, thereafter, yields gradually decline. The simulations highlighted the observed trends of a decline in land improvements on land parcels that are cultivated under lease contracts. Land tenure has resulted in the neglect of land improvement in Finland. This study aimed to analyze whether these challenges could be resolved by a tax policy that encourages land sales. Using Finnish data, real estate tax and a temporal relaxation on the taxation of capital gains showed some potential for the restructuring of land ownership. Potential sellers who could not be revealed by traditional logit models were identified with the latent class approach. Those landowners with an intention to sell even without a policy change were sensitive to temporal relaxation in the taxation of capital gains. In the long term, productivity and especially productivity growth are necessary conditions for the survival of farms and the food industry in Finland. Technical progress was found to drive the increase in productivity. The scale had only a moderate effect and for the whole study period (1976–2006) the effect was close to zero. Total factor productivity (TFP) increased, depending on the model, by 0.6–1.7% per year. The results demonstrated that the increase in productivity was hindered by the policy changes introduced in 1995. It is also evidenced that the increase in land leasing is connected to these policy changes. Land institutions and land tenure questions are essential in agricultural and rural policies on all levels, from local to international. Land ownership and land titles are commonly tied to fundamental political, economic and social questions. A fair resolution calls for innovative and new solutions both on national and international levels. However, this seems to be a problem when considering the application of EU regulations to member states inheriting divergent landownership structures and farming cultures. The contribution of this study is in describing the consequences of fitting EU agricultural policy to Finnish agricultural land tenure conditions and heritage.

Factors affecting farmland prices in Finland

The purpose of the study was to analyse factors affecting the differences in land prices between regions. The key issue was to find out the policy effects on farmland prices. In addition to comprehensive literature review, a theoretical analysis as well as modern panel and spatial econometric techniques were utilized. The study clearly pointed out the importance of taking into account the possible spatial dependence. The data were exceptionally large, comprising more than 6 000 observations. Thus, it allowed a thorough econometric estimation including the possibility to take into account the spatial nature of the data. This study supports the view that there are many other factors that affect farmland prices besides pure agricultural returns. It was also found that the support clearly affects land prices. However, rather than assuming the discount rates for support and market returns to be similar, the rough analysis refers to the discount rate for support being a little lower. If this were true it would indicate that farmers rely more on support income than market returns. The results support the view presented in literature that land values are more responsive to government payments when these payments are perceived to be permanent. An important result of this study is that the structural differences between regions and the structural change in agriculture seemed to have a considerable role in affecting land prices. Firstly, the present structure affects the competition in the land market: the more dense farms are in the region the more there are potential buyers, and the land price increases. Secondly, the change in farm structure (especially in animal husbandry) connected to the policy changes that increase area-based support affects land prices. The effect comes from two sources. Growing farms need more land for the manure, and the proportion of retiring farmers may be lower. The introduction of the manure density variable proved to be an efficient way to aggregate the otherwise very difficult task of taking into account the environmental pressure caused by structural change in animal husbandry. Finally, infrastructure also has a very important role in determining the price level of agricultural land. If other industries are prospering in the surrounding area, agricultural viability also seems to improve. The non-farm opportunities offered to farm families make continuing and developing farming more tempting.

Conditions and terms of leasing seats

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Spatial and temporal determinants of Finnish farmland bird populations

During the past decades agricultural intensification has caused dramatic population declines in a wide range of taxa related to farmland habitats, including farmland birds. In this thesis, I studied how boreal farmland landscape characteristics and agricultural land use affect the abundance and diversity of farmland birds using extensive field data collected by territory mapping of breeding farmland birds in various parts of Finland. My results show that the area and openness of agricultural areas are key determinants of farmland bird abundance and distribution. A landscape composition with enough open farmland combined with key habitats such as farmyards and wetland is likely to provide essential prerequisites for the occurrence of a rich farmland avifauna. In Finland, the majority of large areas suitable for open habitat specialists are located in southern and western parts of the country. However, the diversity of the species with an unfavourable conservation status in Europe (SPECs) had notable hotspot areas in northern and north-western agricultural areas. I found that in boreal agroecosystems farmland birds favour fields with springtime vegetative cover, especially agricultural grasslands and set-asides. Hence, in the spring cereal dominated Finnish agroecosystems it is the absence of field vegetation that may limit populations of many farmland bird species. It is likely that the decrease of crops providing vegetative cover in the spring, such as permanent grasslands, cultivated grass, and autumn-sown cereals, has greatly contributed to the declines of Finnish farmland birds. Grass crops have persistently declined in Finland as a consequence of specialization in crop production and the large-scale decline in livestock husbandry. Small-scale non-crop habitats, especially ditches and ditch margins, are also important for many bird species in the Finnish agroecosystems, but have dramatically declined during the last decades. A major problem for farmland bird conservation in Finland is the conflict between landscape structure and agricultural management. Areas with mixed and cattle farming are virtually absent from the large agricultural plains of southern and south-western Finland, where the landscape structure is more likely to be favourable for rich farmland bird assemblages. On the other hand, mixed and cattle farming is still rather frequent in northern and central parts of the country, where the landscape structure is not suitable for many farmland specialist birds requiring open landscapes. My results provide useful guidelines for farmland bird conservation, and imply that considerable attention needs to be paid to landscape factors when selecting areas for various conservational management actions, such as agri-environment schemes. Actions promoting the abundance of set-asides, grass crops, and ditches would markedly benefit Finnish farmland bird populations. Organic farming may benefit farmland birds, but it is not clear how general its beneficial effect is in boreal agroecosystems. The most urgent action aiming to preserve farmland biodiversity would be to support re-introducing and sustaining cattle farming by environmental subsidies. This would be especially beneficial in the southern parts of Finland, where the landscape characteristics and abundance of agricultural areas are most suitable for farmland birds and where cattle farming is currently rare.

Effects of management and landscape structure on biodiversity in boreal agricultural farmland

Intensified agricultural practises introduced after the Second World War are identified as a major cause of global biodiversity declines. In several European countries agri-environment support schemes have been introduced to counteract the ongoing biodiversity declines. Farmers participating in agri-environment schemes are financially compensated for decreasing the intensity of farming practises leading to smaller yields and lower income. The Finnish agri-environment support scheme is composed of a set of measures, such as widened field margins along main ditches (obligatory measure), management of features increasing landscape diversity, management of semi-natural grasslands, and organic farming (special agreement measures). The magnitude of the benefits for biodiversity depends on landscape context and the properties of individual schemes. In this thesis I studied whether one agri-environment scheme, organic farming, is beneficial for species diversity and abundance of diurnal lepidopterans, bumblebees, carabid beetles and arable weeds. I found that organic farming did not enhance species richness of selected insect taxa, although bumblebee species richness tended to be higher in organic farms. Abundance of lepidopterans and bumblebees was not enhanced by organic farming, but carabid beetle abundance was higher in mixed farms with both cereal crop production and animal husbandry. Both species richness and abundance of arable weeds were higher in organic farms. My second objective was to study how landscape structure shapes farmland butterfly communities. I found that the percentage of habitat specialists and species with poor dispersal abilities in butterfly assemblages decreased with increasing arable field cover, leading to a dramatic decrease in butterfly beta diversity. In field boundaries local species richness of butterflies was linearly related to landscape species richness in geographic regions with high arable field cover, indicating that butterfly species richness in field boundaries is more limited by landscape factors than local habitat factors. In study landscapes containing semi-natural grasslands the relationship decelerated at high landscape species richness, suggesting that local species richness of butterflies in field boundaries is limited by habitat factors (demanding habitat specialists that occurred in semi-natural grasslands were absent in field margins). My results suggest that management options in field margins will affect mainly generalists, and species with good dispersal abilities, in landscapes with high arable field cover. Habitat specialists and species with poor dispersal abilities may benefit of management options if these are applied in the vicinity of source populations.

Farmland birds and habitat heterogeneity in intensively cultivated boreal agricultural landscapes

The biodiversity of farmland ecosystems has decreased remarkably during the latter half of the 20th century, and this development is due to intensive farming with its various environmental effects. In the countries of the EU the Common Agricultural Policy (CAP) is the main determinant affecting farmland biodiversity, since the agricultural policy defines guidelines of agricultural practices. In addition to policies promoting intensive farming, CAP also includes national agri-environment schemes (AES), in which a part of subsidies paid to farmers is directed to acts that are presumed to promote environmental protection and biodiversity. In order to shape AES into relevant and powerful tools for biodiversity protection, detailed studies on the effects of agriculture on species and species assemblages are needed. In my thesis I investigated the importance of habitat heterogeneity and effects of different habitat and landscape characteristics on farmland bird abundance and diversity in typical cereal cultivation-dominated southern Finnish agricultural environments. The extensive data used were collected by territory mapping. My two main study species were the drastically declined ortolan bunting (Emberiza hortulana) and the phenomenally increased tree sparrow (Passer montanus); in addition I studied assemblages of 20 species breeding in open arable and edge/bush habitats. In light of my results I discuss whether the Finnish AES take into account the habitat needs of farmland birds, and I provide suggestions for improvement of the future AES. My results show that heterogeneity of both uncultivated and cultivated habitats increases abundance and species richness among farmland birds, but in this respect the amount and diversity of uncultivated habitats are essential. Ditches in particular are a keystone structure for farmland birds in boreal landscapes. Ditches lined by trees or bushes increased ortolan bunting abundance. Loss of that kind of ditches (and clearance of forest and bush patches), reduced breeding ortolan buntings, mainly by decreasing availability of song-posts that are important for the breeding groups of the species. Heterogeneity of uncultivated habitats, most importantly open ditches and the habitat patch richness, increased densities and species richnesses of species assemblages of open arable and edge/bush habitats. Human impact (winter-feeding, nest-boxes) affected favourably the tree sparrow s rapid range expansion in southern Finland, but any habitat types had no significant effects. At the moment the Finnish agri-environmental policy does not conserve farmland ditches as a habitat type. Instead, sub-surface drainage is financially promoted. This is a fatal mistake as far as farmland biodiversity is concerned. In addition to the maintenance of ditches, at least the following aspects should be included more than is done previously in the measures of the future AES: 1) promotion of diverse crop rotation (especially by promoting animal husbandry), 2) maintenance of tree and bush vegetation in islets and along ditches, 3) promotion of organic farming.