Category Archive: Agriculture

Knowledge Sharing: are you fulfilling your business objectives?

Simon Britton, Partner at George F. White, explains the importance of knowledge sharing in farming and discusses their upcoming seminar at the National Sheep Associate (NSA) North Sheep event.

It’s becoming increasingly difficult to predict the future impact that our potential exit from the EU will have on the economy. As we’ve discussed before, in order to minimise the impact of a potential reduction in direct subsidy payments and disruption of our free trade agreements; farmers need to review their businesses and endeavour to become a top performing farm business.  There’re a number of characteristics of a top performing farm business, including budgeting, knowledge sharing, benchmarking and most importantly, a clear direction of travel; changing 100 things by 1% rather than one thing by 100%.

Knowledge Sharing

On Wednesday 5th June, the bi-annual NSA North Sheep event will take place at New Hall Farm in Settle, North Yorkshire. Over the years, their seminar programme has become one of the most prestigious in the calendar of summer events; challenging, inspiring and educating the sheep farming community whilst promoting knowledge sharing around, sometimes, more difficult subjects. We’re extremely proud to be sponsoring the seminar programme again this year; in times of uncertainty it’s vital that we take every opportunity to discuss the safeguarding of our farming businesses by improving their performance.

Managing Partner, Robyn Peat, and myself, will be kicking off proceedings at 10am in the Seminar Marquee, discussing Share Farming Agreements (SFA), Contract Farming Agreements (CFA) as well as obtaining a Farm Business Tenancy (FBT).

Over the last two to three years, our dedicated team of 14 farm business consultants have seen a significant increase in opportunities for joint venture agreements and land being let on farms across the north of England. This increase is, in part, due to retiring farmers but also businesses that are scaling down due to a significant increase in machinery costs. Agreements can be structured that’ll allow the farmer to still reside in the farm house, continuing to farm the land, yet not having to employ all the labour and machinery that’s required in modern farming. The uncertainty, namely Brexit, hasn’t helped and we feel that this has accelerated a number of retirements and exits from agriculture; however, this offers opportunity for others. It’s important to give farmers a better understanding of the opportunities open to them through joint venture agreements and structured applications for farm business opportunities.

knowledge sharing

Our talks will give attendees a much better understanding of how and when to use a SFA or CFA and how to get to the top of the list when applying for a FBT.

In order for some farming businesses to expand, their only opportunity could be applying for a FBT. The seminar will give the attendees clear instruction as to how to apply and what to include in the initial application in order to get you to the interview stage. We’ve been incredibly successful in obtaining FBTs for our clients and know what goes into making a credible application.

The attendees will gain valuable knowledge that’ll help them make decisions and assess opportunities that may come their way.  We’ll clearly outline how to best take advantage of these opportunities and make sure that when you submit an application, or for that matter establish a SFA or a CFA, it’s for the right reasons and it’s going to fulfil your business objectives.

In the current market, as a team of farm business consultants, we think that there’ll be a number of opportunities arising in the future and it’s imperative that farmers understand these opportunities and how best to take advantage of them. We know that our industry has to change and farm businesses must consider how much they know about their existing business, how change will affect their business, how they’re preparing for change, and also opportunities that will arise in the future.

As we mentioned, knowledge sharing is imperative, I can guarantee that when you come to NSA North Sheep, and attend one of the seminars, you will learn something new and you’ll and benefit from it.

TOP PERFORMING FARMS: STRIVING FOR SUCCESS

Elliot Taylor looks into the characteristics of top performing farms in the UK, giving advice on how you can improve your business performance and future proof your business.

If I were to ask you what are the characteristics of top performing farms; what would you say? Would it be high yields, the best soils or perhaps the size of the farm, or is it down to selling price, the type of machinery or system?  These factors are without doubt, important, but the management practices you adopt are the key to becoming a top performer. How can two identical farms, with the same size, soil type and systems be so different in terms of profitability?

Top Performing Farms

Characteristics of top performing farms is the first topic on the agenda for our seminar series across the North. Why? Because Brexit is likely to cause the biggest shake up within the agricultural industry for a generation and everyone wants to know how best to weather any potential storm ahead.

Interestingly, The Agriculture and Horticulture Development Board (AHDB) released a report looking at the key characteristics of the top performing 25% of farms in the UK. The report identified several areas that can improve performance; things in your control, and if adopted will make you more likely to be a top performer and help you to future proof your business going forward. My brief thoughts on some of these areas are below.

Cost Control

Focus on minimising overheads, in particular power, machinery and labour. For example, with machinery ask yourself, can I keep machinery for longer? Is my machinery well maintained? Can I share machinery with a neighbouring farm? Also look at how you buy you machinery, should you consider restructuring existing finance.

Aim and Objectives

How often do you really talk about moving your business forward? Make time, sit down and talk about your aims and objectives, but don’t just focus on the business, discuss your personal wish list too.

Prepare Budgets

You’re more likely to be a top performer if you prepare budgets. Budgeting will help you forward plan and understand what effect a price change or a fall in subsidies will have. Budgets will help you understand your future profitability and, most importantly, the cash you have available during the year.

Compare your Business

Whether it be an internal comparison with your own business year on year, or, using external data, the more information you have at your fingertips the more successful you’ll be. Top performing farms benchmark, attend discussion groups and look closely at key performance indicators. My advice is to do the same.

Know your Market

Speak to your buyers, ask them what they want and determine if you can deliver it? Work out the cost to your business if you don’t meet the grade and work out the advantage if you do.

Attention to Detail

It’s impossible to focus on every little thing but try and focus on the things that are important. Making a number of small changes can have a major impact on the bottom line. Identify say ten things that you can change and work through them one by one. Consider the positive cumulative effect these change will have on your business.

Be Prepared to Change

If you identify a problem or see an opportunity be prepared to change. Don’t just prepare budgets or analyse your business, make the changes too.

Innovate

It’s no secret that focusing on technology and productivity will drive you forward. It’s likely that the push to improve farm productivity will continue supported by grant funding, so make use of them. If you innovate you will make your business more sustainable, resilient and productive.

Staff

It goes without saying, look after your team. Explain your aims and objectives; get your staff to buy into what you want to do and train them well. Not all farms have employees but remember to look after family labour as well.

Specialise

The farms that specialise are more likely to be in the top 25%. Focus on what you’re good at and what suits your farm.  You may be more profitable if you have one system but do you want all your eggs in one basket?

As I mentioned, all these are things are practises you can do something about and those looking to be one step ahead of Brexit must consider the depth they know their business, how it will react to change, and finally, be prepared to make the changes necessary to remain profitable.

For further advice, please get in touch with our local team of dedicated Farm Business Consultants.

Northumberland and Borders: Andrew Jamieson
County Durham: Elliot Taylor
Yorkshire: Simon Britton

LEADER: The Solway, Border and Eden LEADER Programme

The Solway, Border and Eden LEADER Programme has re-opened until noon on Wednesday 30 January 2019. It’s only accepting applications under DEFRA Priority 2 – Support for micro and small businesses (non-agricultural) and farm diversification.

LEADER Cumbria

What is LEADER?

LEADER is a European Union initiative that encourages economic prosperity for rural areas and improving the quality of life of the communities. With the Solway, Border and Eden area covering approximately half of Cumbria; one of the main aims of this call is to encourage significant and sustainable economic growth and increased employment, with the full engagement of local people.

DEFRA Priority 2 – Support for Small & Micro Enterprises and Farm Diversification

Priority 2 was introduced to help a fund number of areas, ranging from new businesses with startup costs, improving community and rural services through to farm diversification projects, cost saving and retaining young people in farming. Priority 2 can help with the purchase of certain capital items, as well as help with the development of infrastructure within the business as a whole.

James Oliver, Assistant Farm Business Consultant at George F. White, says: “The LEADER grant is a great opportunity for farmers and small businesses in Cumbria to help make any changes, progress and secure longevity in their business, or even new ventures. It is really important that we take advantage of these opportunities when they arise due to our uncertain political future.”

The Solway, Border and Eden LEADER Programme has been closed for a number of months due to a staggering volume of interest, with this in mind, George F. White urge farmers, landowners and business owners to submit their expression of interest (EOI) in good time to avoid disappointment. The government has guaranteed funding for RDPE LEADER Programme grants if these are agreed and signed before the UK’s departure from the EU (even if the grant agreements continue after we have left the EU) however, they are working to a tight timescale and if your EOI is accepted, a Full Application would then have to be submitted before 12 noon on 3rd April 2019, with a full project completion before the 30th of September 2020.

Get in touch with James today for more information.

The Brexit Effect: deal or NO deal

The last few months and weeks have been particularly fractious in parliament as to whether or not a Brexit deal will be struck or indeed any deal at all. Theresa May has confirmed that Parliament will get to vote on a Brexit Deal in mid-January. Here, Simon Britton considers the effect that Brexit has had on the way we think about our businesses.


Whether or not we are cut adrift from our European friends, Brexit has made farmers stop and think about how exposed and reliant their businesses are to European subsidy and support. As an example, according to the Farm Business Survey, the average farming business in the North East makes £71/ac profit, including £97/ac support from BPS in agri-environmental schemes. This is a stark figure and illustrates that, if indeed we do leave the EU and the current UK Agricultural Bill that is tabled comes to fruition, then there are a significant number of farming businesses that would need to make radical changes within their businesses in order to replace the income lost by the removal of farm subsidy.

For nearly a year, our 10 strong team of dedicated Farm Business Consultants have been working with our clients and contacts in order to give them an understanding of their exposure to the loss of subsidy and to understand how resilient their businesses would be moving forward.

I think that the past 12 months and the introduction of the draft Agricultural Bill, has been a catalyst for a number of farmers to understand the impact of the loss of part, or whole of subsidised support. I do think that all farming businesses that receive subsidy do need to review and fundamentally understand their reliance to different income streams, whether it be subsidy or livestock sales.

We have recommended to many of our clients that they prepare a Present System Budget, which will breakdown the turnover by enterprise and give a better understanding of how their business are structured. We can then carry out sensitivity analyses on income received from each of the enterprises be it livestock/crop sales or occupancy rates for their B&B. This will identify the reliance on each enterprise or income stream and what a shift in policy or price would mean to their turnover.

The UK government are already steering farmers towards this by offering competitive grants to improve efficiency and competitiveness, diversify their income streams, improve animal health and welfare alongside water quality.

As a nation, we wait, with baited breath, for the outcome of the Parliamentary vote and whether or not we exit Europe with a Deal or No Deal, if at all. Whatever the outcome, I hope that this has given farmers food for thought and allowed them the opportunity to understand and examine their farming businesses in more detail and hopefully act upon it.

If you would like to understand your business in more detail please contact Simon Britton.

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