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From what to buy, to how to manage the asset, James Townshend knows how to maximise investment in farmland. Katie Puckett finds out what his secret is
He may be one of Britain's biggest farmers but James Townshend does not exactly fit the traditional stereotype. The chief executive of farming management company Velcourt is more likely to be found behind a desk than driving a tractor or leaning on a five-bar gate, even though he is responsible for 55,OOOha growing cereals, potatoes, sugar beets, soft fruit and vegetables, not to mention nearly 2,000 cows on his family farm in Dorset
Townshend says: "We would tend to operate in those areas where management is critical to the underlying performance of the asset" he says, explaining how most of the land that Velcourt manages is good-quality arable that can be farmed at scale.
"We expect to be responsible for the delivery of an agreed business plan, so we are accountable for profit generation and we would expect to link our remuneration to bottom-line profit
"My belief is agriculture needs good management expertise, good technology, good control systems and well-trained people in the driving seat."
This detailed understanding of the business of farming does, however, make Townshend a good person to discuss maximising any investment in farmland, from what to buy to howto manage it.
In the past five years, rural land has become the safe haven of choice for major institutions and high-net-worth individuals alike, offering steady if low returns, decent long-term capital growth and a shelter from inheritance tax. The IPD UK Annual Rural Property Index shows land has outperformed commercial and residential property and equities and bonds in the past 10 years, with annual returns of 13.2%. As investors have bought up swathes of British farmland, many have turned to Velcourt to manage it for them.
It has seen a net increase of 2,000ha in land under management since 2008, and advises on a total of 73,OOOha. Established in 1967, Velcourt Group pic is today a J?31.8m-tumover business, with clients ranging from private individuals and farmers to institutional landowners and universities.
Steep increases in land value have pushed farm management up the agenda, highlighting its importance for maximising annual returns.
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