The Future of Farming
The world of farming is changing rapidly. Brexit, the Agricultural Bill, Robotics and Vertical Farming are all playing a huge part in the change of dynamics and culture for the future of farming.
What’s happening to small farms in the UK?
Post WWII the typical small family farm of around 20 hectares or less has begun to vanish. In more recent years, 40, 50 and 60 hectare farms have more than halved also.
The landscape for farming is changing drastically, and farms have two choices to survive.
- Farming smarter – Reducing costs of production, investing in better equipment, and adding value to farm outputs.
- Diversification – Establishing new business ventures on the farm using the land and buildings available.
In more recent years the capital now required for farming far outweighs the production value it can return.
There is also the argument that the big farms keep getting bigger thanks to increased efficiency, which is pushing the smaller farms further and further behind.
Leaving the EU means the UK leaves the EU’s Common Agricultural Policy (CAP). The Agricultural Bill was introduced in January 2020 and passed into UK law 11th November 2020.
The bill provides a framework for replacement agricultural support schemes.
Currently more than 80% of CAP payments that UK farmers receive and ‘direct payments’ is based on how much land they farm, this totals around £3.5billion.
This bill includes:
- Enabling powers for Ministers to develop new farm support approaches in England. This is being phased out over a seven-year period so the direct payments to farmers won’t be based on how much land is farmed and will instead be to paid to farmers for producing ‘public goods’.
- Gives ministers powers to intervene in agricultural markets in exceptional conditions.
- Increase transparency and fairness in the supply chain for farmers and food producers.
- Measures on marketing standards and carcass classification.
- Provisions to enable the UK to meet its obligations under the World Trade Organisation Agreement on Agriculture.
- A requirement for Ministers to encourage the production of food in England.
- Ministers to set out multi-annual plans about how they will use their financial assistance powers.
- Requirement to report on food security at least once every five years.
- Varied measures in a new part 4 on matters relating to farming and the countryside. Measures relating to agricultural tenancies, fertiliser regulation, identification and traceability of animals, and the Red Meat Levy are included.
A report from The Princes Countryside Fund demonstrated that half of all farms no longer make a living from the farmland itself. As a result, 62% of UK farmers are having to diversify according to government figures,.
Farm diversification is where the farm turns buildings or land into another income generating opportunity.
For example, it could be holiday lets, wedding venues, business centres, or even alternative crops, there’s endless opportunities available.
With the outlook for farming, Diversification will be here to stay.
To learn more about planning for Diversification, ideas and key considerations, check out this article by Amy Rogerson who is the Head of Agriculture Finance here at Amplo: https://www.linkedin.com/pulse/what-you-need-know-farm-diversification-amy-rogerson/
From a horse, to a tractor, and now robots. Because of industrialisation, farming has grown in scale and sophistication to never-seen-before technology.
The introduction of auto-steer offered a huge indication as to what was ahead for future of farming.
Now companies and manufacturers are working towards removing humans almost completely from the field.
According to new research by the Global Market Insights, Inc, the autonomous farm equipment market is estimated to surpass USD 180 billion by 2024.
The increase in labour shortage along with the shifting trends towards usage of autonomous equipment are among the key factors which drive the autonomous farm equipment market size.
Over the next several years we will see a lot of changes, from the growth in autonomous farm equipment, to a change in subsidies, and an increase in diversification.
At Amplo we work with farmers, rural business owners and robotic manufacturers to help businesses adapt as needed. Contact our team today.