Verkauf und Rückpacht von Agrarflächen (Sale and lease back): Analyse und Bewertung aus betriebswirtschaftlicher Sicht

In recent years, many farms in Germany have been confronted with often serious liquidity prob-lems as a result of income loss due to unfavorable product price developments and weather con-ditions. To improve liquidity, farms sometimes capitalize on hidden reserves by selling agricultural land and leasing it back (Sale and lease back – SLB) on a long-term basis. This study examines whether the conditions of recent years including high investor demand for agricultural land has led to the wider use of SLB in agriculture, and/or whether the instrument has also been used for other strategic purposes in the context of generational change, rising land prices and unequal market power on the land market. Furthermore, the study investigates the microstructure of the SLB mar-ket, i.e. who the land buyers are and how the contractual relationships are designed. Barriers and perspectives of SLB use in agriculture are also examined. Results based on expert interviews suggest that SLB have been used by farms for various purposes, especially in the new Federal States – for example, to avoid financial crisis, but also to finance growth and rationalization investments. In particular, the existence of high hidden reserves in con-nection with a sharp increase in the value of agricultural land can have positive effects on the com-pany's development as a result of SLB. Land buyers are mostly private non-agricultural investors, dominated (in terms of area) by private individuals with high financial assets. Such buyers aim at investment security by avoiding production risks, securing stable values and generating moderate returns (approximately 1.5 to 2.0 %). However, the activity of this group is estimated by experts to be slightly declining. In addition to private investors, the various Land Settlement Companies (LSLG) also act as SLB agents with the aim of fulfilling their agricultural-structural mandate from the fed-eral states. Unlike other investors, LSLGs provide a conditioned buyback option for the seller. How-ever, due to the relatively short period within which this option can be used, LSLG's overall SLB market share is small. The Land Transaction Act, which gives pre-emption rights to active farmers over non-farmers in farmland sales, together with the high affinity of farmers towards their own land, are considered to be essential barriers to more SLB. Expert opinions on the future development of SLB are ambiguous. Model calculations show that bank loans are in most cases preferable to SLB given the current favorable interest rates, although multiple aspects have to be taken into account. Mainly the medium- to long-term business strategy and future land prices can have decisive influence on the comparative advantage of each alternative. Experts see SLB as having no significant effects on agricultural structural developments in Germany.