Whatever happens with the Government’s Brexit vote, it’s vital that farmers take the current opportunity to secure their businesses during the transitional period.
According to the Central Association of Agricultural Valuers (CAAV), the removal of area payments will drive change. Speaking at the organisation’s autumn conference, Jeremy Moody, secretary and adviser to the CAAV, said that farmers running good businesses and willing to embrace technology and push innovation boundaries would be the ones that survive Brexit and help the industry to grow. “Brexit is a process with phased agricultural transition and a six-year time window for change.”
The industry is on the edge of a technological revolution, with Harper Adam’s Hand’s Free Hectare, big data, optical recognition technology and automation. “Everything coming down the tracks is both a challenge and an opportunity. If we don’t make use of it, our competitors will.”
Unless the UK ends up remaining in or re-joining the EU, it will be out of the CAP from the beginning of 2021. “Michael Gove has pointed out that the UK would maintain the same environmental standards as the EU but not the rules, so there are levels of flexibility,” pointed out Mr Moody. “But this flexibility still depends on how much we are a rule-taker from the EU.”
Regardless of the outcome, farmers need to focus on profitability, he stressed. “Though traditionally driven by cashflow, farmers need to win and hold financial margin – profit.” The prospect of life without area payments may be daunting, but traditionally it’s been the unsupported sectors that have made the best profits. “We are to be given a time window to manage that change.”
Shifting focus away from output and towards efficient use of resources will be key, as only 5% of factors are outside of farmers’ control, said Mr Moody. “Success does not turn on size; it’s down to how a business is managed. You can’t control trade but you can control what is on your farm.” This could be a case of segmenting markets, adding value, using niches or targeting specific supply chains. “So, it’ll be down to the individual business and how they make a better fist of it.”
The Brexit time window allows farmers to consider their position, take advice, start planning, manage change and implement decisions, said Mr Moody. “They can take advantage of the pace of transition. This allows for considered reaction and I would urge people to manage change, rather than being managed by it – and start that now to make the best of the time available.”