Farming’s D-Day

In military terms the “D” in D-Day stands for “day” and is the day on which a combat attack or operation is to be initiated. The most famous D-Day took place on 6 June 1944 and was one of the most complex military operations ever undertaken, with 160,000 troops crossing the Channel on a single day, accompanied by hundreds of warships and aircraft. But a handwritten note believed to have been drafted a month or two before the D-Day Landings shows that Gen Bernard Montgomery’s battle plan boiled down to a single piece of paper. The pencil plan is headed “Most Secret”, and breaks down the armed forces into separate sections, lists the special armoured vehicles to be used by the first units ashore and notes that “The key note of everything to be SIMPLICITY”.

29 March 2017 is our current D-Day and initiates one of the most complex negotiating operations ever undertaken around trade and agriculture. I trust that those responsible have more of a plan than Monty had – but they do seem to have the same heading as Monty and are keeping it secret, as we have yet to see any evidence of it at farm level.

From a farm business perspective, the timetable of Brexit leaves little wriggle room to prepare for the significant change that’s likely to come over the next few years. I don’t know what these changes might be, but I would assume 2 things – support payments will be reduced (they would have been anyway without Brexit), and whenever there is change, there will be opportunities. Those who have made the effort to plan and prepare for change will be in the best place to capitalise from these opportunities and have the potential to make significant improvements to their business viability and success.

I focussed on the importance of knowledge in my last blog, and the lack of knowledge or information around life after Brexit makes planning and preparation a challenge, so farmers are going to have to start making assumptions about what may happen and how it might impact on your business. I attended a seminar from Andersons recently and they are one of the few organisations I’ve come across who have raised their head above the parapet and speculated about what support payments may look like by 2025. The key number is that they are speculating that there will be a 50 per cent reduction in available support funds from the current level, although they are also suggesting that the devolved government in Scotland will allocate some additional funds to peg the reduction at 40 per cent.

Irrespective of which number it is, it leaves a significant funding gap in most farm businesses. On presenting this scenario to farmers recently, a number of the audience suggested that farm-gate prices would have to rise to compensate – unfortunately farm-gate prices are linked to supply and demand, rather than levels of support, so the reality is that savings are going to have to come from a combination of increased productivity and managed costs.

Benchmarking results from the Arable Business Groups would indicate that there is room for movement in these areas, but will require careful planning, hard work and a change in mind-set or approach to your management.

Farmbench is a new whole-farm benchmarking tool being developed by AHDB and is ideal for initiating the above process. It is one of the most useful, pro-active management tools that I’ve come across in a very long time, giving a live Cost of Production figure at individual enterprise level, as well as illustrating the contribution each enterprise is making to your overall business. Many benchmarking exercises are done in the past tense using audited accounts – Farmbench allows the use of live data to give a picture of your business today, providing up to date knowledge, resulting in an informed decision making process – vital if you want to have a viable business that is able to grasp opportunities in the fast changing business environment we now have to operate in.

So as drills are now operating across the country and auto-steer allows hands-free operation, put some thought in to where your business is now, where it is going, what it might need to be viable with reduced support and what sort of opportunities would make it more profitable.

Gavin Dick - Scotland

Gavin Dick - Scotland

AHDB Cereals & Oilseeds Manager (Scotland). Previously a business specialist with SAC, working to broaden farmers’ business management skills.

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