New farmers face up to hard realities of climate change and pay cuts
PUBLISHED: 11:00 10 November 2019
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The UK's new crop of farmers are ditching sentiment in favour of a much more pragmatic approach as the industry faces up to an enormous set of challenges, East Anglian land agents believe.
Fenn Wright's Beth Speakman says she has detected a noticeable shift in attitudes, as the younger generation confronts the hard reality that farms can't support entire families, and the realisation that simply farming well isn't enough any more.
"In previous generations, it was common for any offspring to remain on the family farm and run the business. This is no longer a financially viable option and the need to diversify into other sectors of agriculture, and beyond has become essential for farming families to survive," says Beth, who is vice chair of Essex Young Farmers.
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The next generation has shed its parents' and grandparents' more sentimental approach to agriculture, with many seeking employment in other sectors and spending holidays helping at home during harvest and busy periods, or pushing towards diversification in an attempt to spread risk and seek new incomes, she says.
For some, this has meant a shift into other business options on the farm, from converting existing buildings for farm shops or commercial lets, or planting trees for carbon sequestration.
She has noticed a greater emphasis on improving the industry's carbon footprint, through finding more efficient ways to farm, using fewer fossil fuels and improving organic matter while minimising chemical and artificial fertiliser use.
In an ever-more volatile climate, younger farmers are looking to new technologies such as drones and artificial intelligence, and are reforming the industry with fresh ideas in areas such as marketing, pushing messages such as cutting food miles and buying British, she says.
"Self-marketing of farming is something that previous generations have struggled with and lacked the same opportunities to exploit, but with the growth of technology, public perceptions of farming have never been more crucial."
The younger generation's ability to connect with the outside world via social media opens doors for UK farming at a time of great uncertainty, she says.
"My advice to younger farmers would be to continue to find ways to add value to your produce and sell yourself. It is no longer enough to simply farm and farm well.
"With the impending loss of environmental grant schemes and subsidies, we must find innovative ways to demonstrate that British agriculture is some of the best in the world."
On the plus side, UK consumers still have a deep rooted loyalty towards British farming, and this is something the sector needs to retain, through schemes such as Red Tractor as through maintaining high animal welfare standards, she argues.
"As we have seen with the horse meat scandal, bad publicity can spread internationally within minutes, tainting the entire industry despite the incredibly high standards that British farmers uphold. There is no harm in reminding people from time to time of the good farmers do to benefit the countryside and environment and in producing good quality food."
Cheffins' Ed Tabner agrees that the new generation is embracing and driving advances in technology in the agricultural industry - as well as finding new income streams.
"There is a real hunger to reduce costs and increase margins. The new generation of farmer is savvy and commercially astute and more likely to adopt commercial practices from other industries," he says.
"Landowners with smaller holdings will be forced to refocus and look for other income streams from their assets in order to remain commercially viable.
"Future support payments are likely to be linked to environmental benefits - these are currently being embraced by many farmers and look likely to remain a key part of future income streams."
Will Barton of Landbridge says some of the younger generation are already making a difference, highlighting the importance of succession planning and allowing younger people into the business early enough so that they can make an impact and gain the necessary skills to advance the business.
"I wouldn't want to give any specific examples, but we have a number of clients where younger people are involved in the family business brought about by either through careful succession planning, change of circumstance, or by bringing something new to the party and in most cases they have already made a positive impact," he says.
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He advises this generation to keep an open mind, be prepared to do something different, and explore new markets, such as environmental land management.
Areas to probe might include exploiting farm assets better, such as by setting up tourism and leisure, wedding venues or offices in old farm buildings, or setting up pig or poultry production on arable farms, he suggests.
Eleanor Havers of Clarke and Simpson says young people bring energy and a fresh way of looking at things which will have a profound effect on the industry - particularly through diversification.
"There are many farming businesses across Suffolk where young people are being given the opportunity to take a key role in making decisions and as a result these businesses are flourishing and thriving," she says.
"I would encourage any young farmer or young professional to not forget to do the mundane well as this often leads to greater responsibility especially if you are enthusiastic and ask for it."
Strutt & Parker's Jason Cantrill says Brexit, climate change and biodiversity losses are forcing farmers and landowners to think closely about how land is managed.
"The new generation of farmers is well aware that change is on the way and many are actively preparing themselves to become more self-reliant and less dependent on subsidies," he says.
"Research suggests that the top 25% of farms will be least affected by a move away from direct payments as they rely less on this money for their profits. They know that increasing efficiency will put them in the best possible position as changes in farm policy are rolled out.
"This mindset is resulting in a greater willingness to engage in farm benchmarking to identify opportunities to improve profitability."
Other trends include more use of technology, a move towards less-intensive cultivation systems and sharing machinery with neighbouring farms to spread costs, as well as seeking to grow revenues from diversification or better environmental management in a bid to spread business risk, he says.
"I always say to young farmers that in times of uncertainty cash is king, so any project that generates regular cash, such as a bed-and-breakfast pig enterprise, off-farm residential let property or contract farming to better utilise existing labour and machinery, should be explored.
"The key to future success is to be as agile as possible - although this, of course, applies to farmers of all ages."
Pig consultant Peter Crichton acknowledges that it is difficult for young entrants to farming to get a foot on the ladder with comparatively high land prices and very expensive machinery running and repair costs.
However, there could be ways of increasing the availability of tenanted land to enable more young farmers to enter the industry, he suggests.
"One way in which this can be done is to consider the reform of land tenancy arrangements," he says.
"There are a number of 1986 Agricultural Holdings Act (AHA) tenancies which effectively can give tenant farmers lifetime occupancy rights and in some cases for the next generation to qualify for succession and to take on the holdings.
"However, the number of these 1986 AHA tenancies is dwindling, and although they have to some extent been replaced by the 1995 Farm Business Tenancies, these are often for a relatively short term between one and three years and do not provide young entrants to farming or, for that matter, experienced farmers with much confidence to invest in new machinery to farm the land with.
"One way in which this could be achieved would be for existing Farm Business Tenancy (FBT) agreements to be granted for longer fixed periods of up to (say) 15 to 20 years and with rents to be linked to the Retail Price Index (RPI) to allow them to keep pace with inflation."
This would provide landlords and tenants with some certainty concerning future arrangements in the medium term, he says.
"The availability of a lease of a reasonable term of years would also give young farmers the confidence to approach their bank to see what funds might be available, because on a very short term basis it is unlikely that funding would be forthcoming other than at a very high cost."