Working together to meet farming's challenges
There are an array of uncertainties facing our industry in the not-so-distant future – Brexit, Michael Gove’s emerging agricultural policy, the new regime for farm payments and the threat of climate change.
Collaboration has never been more important. Collaboration takes many forms. In its simplest form it may include sharing equipment or it can be through merging and pooling machine and labour resources into one company.
There is scope for collaborations between landlords and tenants too, for example, in accessing opportunities for development grants for capital investment in storage or water resources. This cooperation between farmers can also maximise the landscape and environmental benefits through offsetting one farms production against delivering better environmental value.
The arable sector does pose extra difficulties for collaboration as supply chain arrangements tend to produce the greatest gains for those who are more closely linked with the consumer, for example, pork, lamb or beef rather than feed wheat. However, there are still opportunities. Warburton’s and Heygates, for instance, have aligned wheat supplies from farmers who are able to commit to longer-term contracts.
A fundamental point is not to collaborate for collaboration’s sake – there has to be a strong business case. Both parties need to have similar objectives and aspirations otherwise it will simply not work.
Admittedly, similar attitudes help, nevertheless collaborations which bring together different but complementary skill sets are also as strong. Regular discussions between partners are key. Our role at Strutt & Parker can often involve acting as mediator or interpreter between two farmers, or the suppliers and customer. Whatever the position, farmers and landowners should ask themselves if they can reduce costs and improve efficiency through collaboration.
Deal or no deal – Brexit is happening. The government’s primary focus still remains on negotiating a good deal for Britain and the NFU have stressed the importance for a free and frictionless trade with the EU for the agricultural industry. A recent parliamentary guidance paper has approached what happens if the UK leaves the EU with no deal, ultimately outlining what may happen.
It explains how the support for UK farmers will remain at the same cash total until the end of this parliament which is expected until 2022. This includes the funding under Pillar 1 and Pillar 2, although this is caveated by the current level of funding for Pillar 1 being guaranteed until 2020. The paper suggest that farmers will have to comply with the same standards as they do currently, including inspections, until new British agricultural policies are introduced.
George Dickin, Farming Assistant (Shrewsbury), Strutt & Parker
