Rural businesses will need to embrace change if they are to thrive post-Brexit, a land expert has warned.
James Farrell, head of estate and land management at estate agents Strutt & Parker says improving farm management through marginal gains and a willingness to invest and diversify will be key to farms preparing themselves for the brave new world.
“That will mean understanding new areas of opportunity, such as natural capital, which has the potential to create valuable new revenue streams for some,” he said. “Investing in natural capital will involve landowners entering into long-term contracts where they are paid to produce environmental outcomes, such as improved water quality or a reduced flood risk. We are also on the cusp of a new agricultural revolution, driven by technological advances in which progressive farmers can invest to become more profitable.”
Smaller farms, which may be undercapitalised and may not have that opportunity to invest, need to think about what they are going to do. Joint ventures and new collaborative arrangements will be the key to survival for some, he added.
While estates must consider how they can diversify to fill the void left by an anticipated fall in agricultural income, they shouldn’t ignore the basics of good business management and investment in the core estate.
“This could mean investing in residential properties to ensure that they can thrive in a changing private rental market,” he said. Will Gemmill, head of farming at Strutt & Parker, said the industry can only speculate on what agricultural and environmental policy will look like post-Brexit, but it is highly unlikely that farmers will receive similar direct payments to now.
“Perhaps the key question is whether the government will continue to protect farmers or liberalise a sector, which is perceived by many as inefficient,” he said.
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