From extreme weather patterns and rising input costs to low commodity prices and shifting policy, farmers across the UK continue to face increasing pressure to deliver more with less. In this latest article, our agribusiness director Charlotte Gore explores the factors within farmers’ control that can help build more resilient and high-performing businesses. 

Many of these external factors impacting the industry cannot be controlled at farm level. Whilst their effects must not be underestimated, several studies over recent years show that many of the common features of high performing farms are a direct result of the management of that business.  

In other words, it is the behaviour, character and expertise of the farmer or manager that really counts. The economic difference between the top and bottom performing farms is stark, leaving plenty of room for aspiration and improvement at farm level. However, crucially there needs to be a willingness to learn and an openness to the inevitable changes required.  

The removal of direct subsidies continues to shift the spotlight onto farm performance; proficiency is key, and farm businesses can no longer afford to be average. For some farms, a few tweaks in key areas of focus can cumulatively raise performance to the top quartile, think the concept of ‘marginal gains’. Others will have to explore and implement more dramatic changes to strategy, but this can be a staged process over a longer timeframe. Having clear objectives and the key personnel involved remain critical for success.  

Diversification is widely encouraged and can increase overall business resilience by spreading risk and generating steadier income flow. However, it is essential that it complements rather than distracts from core farming and doesn’t just subsidise an otherwise unproductive farm business. 

There is no ‘one-size fits all’ easy solution to improving farm profits, but the common starting point must be accurate measurement and appraisal of both physical and financial performance. This relies on honesty, openness and sharing of robust performance data, and showcasing best practice within the sector. 

Collaboration is key, whether with local farmers, supply chain partners or trusted advisors, and presents huge opportunities for focusing on expertise and economies of scale.  

It is encouraging to see the formation of more local cluster and discussion groups across the UK. These are an invaluable format for knowledge sharing as well as providing collective strength and potential exposure to markets or revenue streams that may otherwise not be accessible for individual farmers.  

In the current challenging circumstances and distracted by the day-to-day pressures of running a business, it can be difficult to find the mindset for change. For this reason, the ‘group therapy’ support benefits of discussion groups should also not be undervalued. 

As an industry, we need to encourage farmers and landowners to look positively at the different opportunities for joint ventures and tenancy models, to combine access to land with expertise and ambition. This could range from simply pooling a key piece of machinery with a neighbour, to letting a whole unit on a Farm Business Tenancy. They can also be an excellent stepping stone to reducing active daily involvement in farming but maintaining some of the lifestyle benefits. 

Working capital requirements, particularly of arable enterprises, have increased significantly in recent years. Joint venture arrangements maximise the efficiency of labour and machinery costs and help to release resources so they can be better utilised elsewhere in a business. There are some excellent examples of cooperative farmers justifying investment in new technology or emerging techniques across a larger farmed area.  

There is no doubt that an urgent shift in government policy and market access remains crucial, but in the meantime farm businesses must also be proactive and all take responsibility to optimise their own performance and resilience. 

Discover how Newton LDP can help your rural business grow and adapt for the future. https://newtonldp.com/contact.aspx