There has never been a more urgent time for Norfolk farms to formulate a resilience strategy says TOM CORFIELD, partner at Arnolds Keys - Irelands Agricultural.
It’s no secret that farming is facing an unprecedented range of adversity right now, with everything from Covid to Brexit, the phasing out of EU subsidy support payments, a mixed harvest and a wet autumn.
A useful definition of resilience is “the process of adapting well in the face of adversity, trauma, tragedy or even significant sources of stress”, and so developing a robust (resilient) strategy for your business could not be more timely.
Too often farms continue with the same plans year after year, believing that because their business has survived every crisis which has come along so far, the same approach will work in the future.
Without wanting to downplay the challenges that the agricultural sector has faced in the past, this “same-old” approach is unlikely to be adequate to deal with the changes that are coming.
There are a number of things which farmers can be thinking about as they try to pull together a strategy to ensure they are sufficiently resilient.
The first is to review your farm assets: not just the physical things such as land, buildings, machinery and equipment, but also less tangible factors such as location, flora and fauna (your “natural capital”). Are you maximising every business opportunity? Have you explored every possible diversification idea? Are you making the most of every farm building, or are there untapped development opportunities? With the new government support scheme focusing far more on the environment, is your farm making the most of that natural capital?
Land is the most important asset in most farms, so this should be a focus for review. Are you growing the right crops, especially as some agrichemicals stop being available? Do you need to make changes to accommodate climate change? Are there some land parcels which would be better suited to other uses?
READ MORE: How can farms ride out the ‘perfect storm’ of Brexit, climate change and coronavirus?
Having looked at your assets, the next thing to do is reflect on the business itself. A classic SWOT (strengths, weaknesses, opportunities and threats) analysis might be a cliché, but it works, and helps to focus on using your strengths to counter threats, as well as maximise opportunities. It’s important to look at every activity the business undertakes, and be honest about whether a particular facet of the business may have become simply too difficult.
It is very important here to involve the next generation and these can be difficult conversations, but with the coming reduction in subsidy, it is important to build a strategy that factors in their aspirations and ideas.
Coupled to that is the need to review the skills and abilities of the family and team. You may have great ideas to make your business more robust, but can you deliver them? Will your strategy require training and development?
Finally, you need to have an honest and open discussion about the business’s finances. This is particularly timely, because many farm businesses have legacy loans which could be refinanced at today’s historically low rates – freeing up cash to build resilience for whatever the next piece of adversity happens to be or for use in a new project.
None of the above are new ideas but will hopefully provide some suggestions so that your business not only survives but thrives going into the future.
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