DANISH AGRICULTURE (3)

Politicians are fond of saying that the end of the financial crisis is just around the corner; Danish farmers beg to differ.

New statistics show that land prices continue to fall, and have now dropped 42% since their peak in the summer of 2008. This has wiped kr.286 billion off the sector's value, and made many farmers insolvent. Given farming's contribution to Denmark's export sector, this is a major concern. Economists are saying that the bottom has been reached; but they were saying that a year ago, and it turned out not to be true.

Low land prices should in principle help young people wishing to start out as farmers (a necessary development, given the fact that the average age of farmers in rich countries is quite high). However, the losses incurred in agriculture during the past 4 years have caused the banks to shun the sector, and they are not lending at all. I suspect that land prices have further to fall before there is equilibrium.

Walter Blotscher