6 business areas to focus on for success in transition agriculture

Successful agricultural businesses will need to be lean, efficient and diversified to meet the major challenges ahead, while having built-in resilience and financial astuteness.

Those who survive will be the quickest to adapt and meet the government’s industry targets, leaving a better environment for the next generation, maintaining food production and reducing carbon emissions.

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There are six key areas to focus on when it comes to future management success, believes Grace O’Dwyer, deputy head of agriculture at HSBC Bank, who urges every farming business to take a close look at where it is doing.

“The question we often ask is: when push comes to shove, what are companies doing to help themselves,” she says.

“We know that there will be good and bad years in agriculture and that is why we look at the long term with our customers, but the downside is that nothing stays the same. So what is being done about the emerging risks?”

Success will come if the following areas are addressed, she advises.

1. Climate change

At the farm level, adaptation to climate change is underway as warmer summers and warmer winters bring about changes in management practices.

The predicted 10% increase in winter rainfall over the next thirty years means water management and water use efficiency measures are high on the to-do list, with factors such as drilling date and crop type already being used to help.

As rainfall increases, keeping soil in good condition will help improve water infiltration rates and reduce soil erosion and runoff.

Water efficiency measures – from building a new reservoir to installing rainwater harvesting – will limit drought risk.

Trees and hedges will play a role in providing shade and shelter for livestock, while flood mitigation measures should be considered during extreme rainfall.

“We know that what are currently once-every-five-years events will become every-two-years events, so there are things that can be done to prepare for that eventuality,” said Brendan Freeman of UK Climate Change Committee.

Of course, climate change is not just about threats; there are also opportunities. These range from longer grazing periods and extended production seasons to earlier maturity and new crops.

It is not surprising that the fastest growing crop sector in England is viticulture. It is predicted that by 2032, 7,600 hectares will be planted with vines, compared to the current 4,300 hectares.

2. Supply chain consolidation

Consolidation is taking place and net zero growth is driving that process, while changing market demands are also playing a role, commentators say.

The food industry is planning to make significant changes to ensure supply chains are fit for the future. Farmers who work together with their partners are most likely to unlock synergies, reduce price volatility and help increase security of supply.

“This is about working together,” says Grace O’Dwyer.

“On your own you can be in a more vulnerable position and as a country we need food security.”

There are some good examples – just one of which is the relationship between Baird’s Malt, Fettercairn Distillery and a group of 200 local malting barley growers in the north of Scotland – which ensures a sustainable and local supply of the key raw material required for their production. whiskey.

Growers must be within 50 miles of the distillery and use up to 122 tonnes of malting barley – and a minimum of four loads per year – to be part of the initiative.

The group supplies a total of 22,000 tonnes of malting barley annually, with an emphasis on supporting the local community.

Nationally, ADM Agriculture is rewarding growers for implementing regenerative agriculture practices in wheat and canola milling, while taking steps to ensure the resilience of supply chains.

Payments will be received per hectare using a scorecard concept, with bonuses received on top of the market price.

3. Changes in agricultural policy

Production subsidies have been replaced by payments for the provision of environmental services and public goods, with farms encouraged to do what is good for both the business and the environment.

At individual farmer level, the Sustainable Farming Incentive (SFI) is open for applications, while larger landscape restoration projects are also funded for farmer groups to achieve nature restoration at scale.

Capital grants are also offered, many of which provide much-needed funding for improvements needed for future success.

The SFI – which is suitable for tenants and landowners – can be used to reduce business risk and supplement food production, while also doing something for the environment.

Making it work requires planning and forethought so it fits the farm. In one example, a 980 hectare mixed arable and livestock farm without an existing Countryside Stewardship Agreement will implement the following actions:

That works out to £205/ha, but means the rotation is extended to eight years – with five years of harvesting and three years of herb growing.

Now that there are already sheep on the farm and there is a grass weed problem, some arable land is being taken out of production to put the company on a different footing.

4. Agricultural system

Sustainable, resilient agricultural systems are increasingly specified by the end market, but are also preferred and adopted by farmers.

As incentives for more sustainable practices slowly trickle down the supply chain, there are financial rewards for farms from better soil health, improved water retention and nutrient cycling.

The acceptance of lower resource use, less cultivation, better animal welfare and greater diversity will help, as will options that involve land use changes such as tree planting, rewetting and flood management.

Often described as future-proof: making a business more resilient gives it a buffer against shocks and the ability to recover.

For example, food giant Nestlé views regenerative agriculture as an agricultural system that aims to preserve and restore agricultural land and its associated ecosystem.

The company has committed to net zero emissions by 2050, with a 20% reduction in emissions by 2025 and a 50% reduction by 2030.

As a result, the company aims to co-finance a holistic agricultural approach. That is why it is involved in Landscape Enterprise Networks (Lens).

Lens is a network of people looking for results from the agricultural environment, where farmers who can deliver these results are paid for implementing certain practices.

Measuring, reporting and verifying is important at Lens.

“If you don’t want to share your data, this may not be the right choice for you,” notes Openfield’s Richard Jenner.

5. Data and automation

The application of automation, digitalization and data is another area that agricultural companies need to address.

To achieve that, seamless integration is essential, farmers say, because they have spent far too much time grappling with technology that exists in isolation and limits the choice and potential for integration.

“Plug and play” technology with open standards and full integration is the ideal, according to Kevin Gooding of Diometer, who is developing the Open Digital Farm concept together with 25 industrial partners.

It combines hardware, software and data functions in an open integration strategy, benefiting farmers and technology providers in what he describes as a win-win situation. “It will be designed for everyone,” he says.

“We are working together on a partnership approach that will remove the existing islands of technology.” Built-in data security is a must, he acknowledges.

“Our premise is that if you create data on your farm, it belongs to you.” AI offers enormous opportunities and a project within Open Digital Farm will respond to this, he confirms.

“The idea is that it will enable a step change in AI use on farms. The obvious way to use it is in precision agriculture, but there are also specific tasks that can be achieved through the use of AI.”

6. Labor and skills

Access to labor and skills is essential to the future of any business; it is the people who make a company a success.

There are several considerations to attracting and retaining staff, says Liz Tree, project manager for Morrison’s sustainable farming network, detailing staff facilities, investment in training, shared values ​​and work-life balance.

“There is now more diversity in agriculture,” she emphasizes. “If we want to inspire the next generation, we must recognize that some flexibility is required.

“Every year, more than a third of people working in agriculture leave their jobs.”