Janet Herniman, Rural & Funding Specialist at The Diverse Regeneration Company continues a series of articles looking at forthcoming changes with the new Agricultural Bill and how to incorporate, and embrace these changes to work in your favour.
1.Prepare for Change:
As a consequence of the UK leaving the EU, the new Agriculture Bill going through parliament, will bring about some of the biggest reforms in the farming industry that many of us will have seen in our lifetimes.
With the Basic Payment Scheme (BPS) gradually being phased out over the next seven years, we are encouraging all those in the industry to be aware of the effects that the loss of these direct payments could have on individual farm businesses and their long term financial sustainability.
The BPS is being replaced with new agri-environment funding called the ‘Environmental Land Management Scheme’ (ELMs) or often referred to as ‘Public Money for Public Good’. The scheme might include such things as thriving wildlife or capturing water on your land. This will reward farmers, foresters and land managers for managing their land in a way that will deliver against key 25 year Environment Plan goals. . (Initially ELMs will be in ‘test and trials’ format, which you can get involved with at local level, with many areas already taking applications.)
Workshops are being held in local areas, all across the country, to help understand these changes further, and help farmers deal with the transition. I would urge you to seek these out and sign up for them if possible.
As we all know, some of these proposals may not necessarily be changes we are keen to embrace, but change is coming and it really shouldn’t be ignored!
Taking a good look at our businesses and seeing where we can embrace opportunities, whilst remaining strong and resilient going forward will really help ensure these changes don’t cause too much disruption. A good question to ask is ‘where is my business now?’ Being able to evaluate the present will ensure that you can more easily move on to the future. You will probably be surprised at how much information you already have at your fingertips; financial accounts, stock sheets, yields, gradings, medicine records etc. so now is the time to take a good look at these and try and evaluate what they are telling you. For example, where are the best returns or where are there areas for improvement?
Undertaking some critical analysis of your business at this stage will enable you to understand your current circumstances. Combine this with looking at your forward goals and this can help with the next stages of planning for a stronger future.
2. Business Planning
- From here we can start to look forward and create a plan for the next 5 to 10 years. As with all aspects of life, looking to the future helps create the present so with a longer term plan in mind you will soon start to approach all aspects of your working day, with your longer term goals in mind.
How do you start to form this plan? The best place to start is with the final outcome in mind. Similar to taking a day trip to the beach – if you know where you want to get to it is easy to work out the route to travel there. Work it out in small bite-size manageable chunks spread over realistic periods of time. As the analogy goes; ‘no-one could eat an elephant in one go’! Change is relatively easy (and a lot less scary) if undertaken at a steady achievable pace in bite size chunks.
Communication is key to planning and change making, so make sure you involve everyone who plays a part in your farm business, right from the first planning meeting through to the end goal. Sit down from the beginning and chat ideas through with all members of the team. Everyone has their own strengths and you will be surprised at the ideas that will come from even a small ‘family’ group – different generations will all have different ideas and suggestions, many that may work well together to form a strong and cohesive plan. If all team members are on board with the plan, the outcome will be far more successful.
Be flexible in your planning. Once your plan is in place, don’t feel you have to necessarily stick to it rigidly. A bit like our day trip to the beach, we often come across traffic diversion signs on the way, but we will still get to the beach! This means you will have the scope and flexibility within your plan to make the most of any new opportunities, respond to challenges or changing market forces as they come along.
Most of all when looking at long-term planning, this is your opportunity for both courage and embracing new ideas/opportunities. As New Zealand farmer, Doug Avery suggests, ‘the past is a good teacher but it can shackle the imagination for moving forward, so let go of the things you can’t change and focus on those you can change.’
3. Making A Change
In my previous articles I’ve talked about how to prepare for the changes that will come with the break away from the existing direct payments scheme, how to start planning ahead so these changes work in your favour. Now I will look at how to decide on potential ideas to follow up and how to decide which projects to undertake.
Start by looking at the following:
- What is important to you
- How your business currently operates
- What aspects would benefit from change
- Look at what might help give you a better work/life balance
Some of these may be large changes but often several small changes can make a big difference to your everyday working life and to bottom line profit. On talking with farmers locally there seems to be three main categories that keep coming into our conversations; technology, management and diversification.
Technology: Most new technology is devised with the aim of ‘improvement’ – making life easier, quicker or providing better animal health. Technology changes might come in the form of upgrading equipment and using new technology such as handling systems, EIDs or information collection that will all help drive productivity and can make things easier. However, new technology can be costly so ensure you look at cost versus return. It might be best to look at a number of small improvements over a period of time, and definitely keep an eye out for grant funding schemes that may be able to help.
Management: Have a look at your farm management, looking at each aspect in turn as you go about your daily activities. Ideas could include:
- Calving heifers earlier (if ready)
- Strict breeding stock and cull protocols
- Reviewing and decreasing your costs where possible (such as proactive animal management, focusing on prevention to reduce vet and med costs). However, be careful; choose costs carefully and be mindful of false economies.
- Look at your land use and consider alternatives. Walk your ground with a fresh pair of eyes; can you get more from grazing, are you applying fertilisers according to need, consider regular soil testing, explore Environmental funding schemes.
A whole range of ideas may emerge. Consider each in turn to weigh up overall benefits and costs. Another area to look at is record keeping. Timely information is powerful and can help aid management decisions. Use a system that works for you and check-out mobile Apps that might help speed up the process, or even bring in another member of the farm team who would be happy taking over this role.
Diversification: This is certainly an area to be considered. But how do you know that introducing something else to the business is going to pay dividends?Firstly I would suggest looking at the knowledge and resources you have available; spare labour, spare or underutilised land and buildings, spare time and of course spare money!
Diversification of any sort is the setting up of a second business alongside your main farming business, so ensure you have sufficient resources to ensure it does not adversely affect your core business. Secondly, is there actually a market and a demand for your diversification idea? Make sure you do your homework and research existing competitors/pricing etc. to see if your idea is actually viable. Check that it will give the rewards to offset the time and effort it will require to set up and run.
My last article looked at change. From the positive impacts of small bite size changes to your business, as well as larger longer term changes including the possibilities of diversification, including embracing the new ELM (Environmental Land Management) opportunities. To be able to undertake change and/or diversification, ‘knowledge’ is key. Without fully understanding new opportunities, techniques or the area we want to diversify in to, there will always be a limit to how successful your business will be.
Learn from your own team. This ‘team’ includes yourselves, family members and hired staff but also outside experts you use; vets, bank managers, accountant, nutritionist etc. Are they all aware of the goals you are working towards? Are they delivering and are they on-board with your long-term plans? Also involve the next generation, they have fresh eyes, have often been away to college or be learning from their peers and through sources you might not be accessing. Incorporating knowledge from all these people will give you a strong basis to grow from, but will also help benchmark your business.
Learn from those around you. Listen to feedback and advice from visiting or temporary staff. Often they will have worked in numerous locations and will have a wealth of knowledge on different practices. This may initially be tricky to swallow, but often another outside view may well have merits that will be greatly beneficial. Use farm open days, it is a chance to get offsite and see different systems. Why not host a farm discussion day, it is a great way to get feedback and ideas.
Learn from more official sources: Make sure you are in the know and receiving appropriate and timely updates, so you don’t miss opportunities. Sign up to appropriate e-alerts and social media. It can be useful to get involved in local discussion groups and farm meetings hosted by a variety of organisations from specialist suppliers such as Mole Valley Farmers, accountants, vets and business support specialists, through to farmer led networks, specialist innovation and diversification trade shows as well as formal government support from DEFRA, Natural England and their representative partners. Gathering the most up-to-date advice and guidance as well as information on funding, new technology available, and changes in regulation are all disseminated through routes such as these. Use the technology available, much of which we have become familiar with in recent months to attend webinars, discussions and training. AHDB host some excellent live webinars, also available online afterwards – an easy way to increase knowledge, ask questions and all at your own convenience. Consider booking regular time and building up a relationship with a personal/business mentor, who can help guide and challenge your thinking over the longer term.
However, the main point to take from all of this is that once you have all this knowledge you need to find the time to put it into practice! Without action, however much you know, will result in no change and no progress towards those long-term plans.
5. Funding & Grants
My last article looked at ‘knowledge’ – where to find it and how to use it within your business to greatest effect and most importantly making sure you ‘action’ it in order to progress your business towards those long-term plans and goals.
Those plans may come in all different forms, from large or small diversification projects, investing in new farm infrastructure and equipment or training for yourself and staff. Most plans need investment. So how do you find the money to invest?
This is not always an easy question to answer and sadly a metal detector won’t necessarily reap the rewards we need! But, there can be grant funding help available.
Grant funding will generally not pay for standard agricultural equipment or sheds but there can be lots of opportunities for equipment to improve farm productivity, animal health, environmental improvements and developing diversification enterprises.
Most grant funding options work on a 40% grant basis. (Your business will input 60% of the cost and the grant/funding programme will support with the remaining 40%). However, in some areas grants can be higher, and the Stewardship Scheme for instance is funded on a fixed payment basis per option chosen.
Funding is usually paid in arrears, so any project will need to be temporarily funded by you until the project has been completed and a claim submitted.
Grant funding availability varies, with some programmes being time specific, opening and closing in a relatively short time period, while others have rolling programs. It is important to plan your investment in good time to allow time to identify, apply for and secure grant funding (sometimes it can take months before you hear if you are successful and normally you must not start your project until you have a grant funding agreement). A little bit of time and research can pay huge dividends.
CPSG Round 3 (Countryside Productivity Small Grant) is still planned for this Autumn and there will be new productivity and animal health grants from 2021. As we change from EU to Treasury Agri-funding in 2021 it is even more important to keep alert for opportunities. Watch out for ELM test and trials and pilot programmes. Also keep an eye out for new and existing Covid business recovery support schemes.
It is also worth speaking to your local Rivers or Wildlife Trust to see if there are local environmental initiatives, which can have grant funding opportunities linked to them, as well as expert support.
It is wise to ensure you find out about funding opportunities as soon as they are launched and get cracking with an application. Most funding programmes have tight deadlines and sometimes the application process can be involved – so the more time you can give yourself, the better.
To keep abreast of funding opportunities we recommend you register for :
- DEFRA e-alerts (www.public.govdelivery.com/accounts/UKDEFRA/subscriber)
- Government Rural Economy Grant updates (www.gov.uk/email-signup/?topic=/environment/economic-growth-in-rural-areas)
- Your Local Enterprise Partnership Growth Hub newsletters
- Your local National Park, AONB (Area of Outstanding Natural Beauty) or facilitation group farmer networks
- Your local district council Economic Development team updates
- Diverse Regeneration Company newsletters and social media, which lists a range of current funding and grant programmes. (DR Company – latest funding news)
If it is all too overwhelming, myself and our team of advisors at the DR Company specialise in helping farmers identify and apply for grant funding, so please get in touch.
Janet Herniman: Rural & Funding Specialist – DR Company