“Commit to carbon reduction and build in resilience to keep our farms successful and relevant.” This is the end of year message from Brian Richardson Head of Agriculture for Virgin Money.
As we near the end of 2021, we start to look back at what has happened throughout the year, and more importantly, look forward to what the next year might bring.
The focus in 2021 has very much centred around the effects of Covid-19, but beyond the pandemic in agriculture, particularly in England, we have seen new policy start to emerge post Brexit and an emphasis on the environment and journey towards net zero. This is a time of great transformation in the farming sector, and I feel we are now starting to better understand the change that is coming, and the need for farming businesses to quickly understand what will be expected of them in the future.
It has been helpful that farming prices, except for the pig sector, have generally been strong. This has provided a stable base and a good foundation on which to build future plans. How long the present buoyant prices will last is always difficult to predict, but with certain costs increasing at an alarming rate, producers are going to need to receive a realistic price for their products for some time, just to even stand still.
Harold McMillan, when asked what the most difficult thing was about being Prime Minister, said: “Events, my dear boy, Events.” And perhaps it is the same for farmers – we all make great plans based on what we know today, but the unforeseen happens and those plans need to change. We have witnessed in the pig industry how problems in China have caused knock-on effects in Europe. This can dramatically affect the fortunes of UK farmers, particularly when coupled with a shortage of slaughter staff. So, weather, animal health and wider economic circumstances can all tear the best laid plans asunder.
I often describe the farming sector as ‘resilient’, which of course it has to be. It is difficult to think of many other industries that have so many external factors which affect plans and the prosperity of the industry, yet farming continues to demonstrate how it can adapt and displays resilience. It is very much a long-term business which needs looking at over a period of years rather than months.
So, what might 2022 bring?
We saw in November the world turn its eyes to COP26, and the environment will remain an ongoing theme in the coming year. We have the relatively gentle but firm prodding of government, through policy on the environmental agenda but, alongside this, we have a growing number of suppliers putting the net zero agenda further up their own priorities. People are asking more questions, via their suppliers, of what farmers’ carbon outputs are and perhaps more importantly, their plans to reduce emissions.
With this in mind, carbon audits are going to become the norm and it is worth getting one completed sooner rather than later, as this will provide a baseline for your business. Aligning with a creditable consultant is as critical as the report itself; produced by one of the many carbon calculators, this is in fact the easy bit. Using that to create a plan and fully understand how and to what level you will reduce carbon is key, so having the right consultant to support that discussion is important. If you make any new year resolutions, it is worth committing to a carbon audit to stay ahead of the pack when it ultimately becomes a prerequisite.
The carbon audit pilots we have run for customers in 2021 have demonstrated that these are useful tools in improving productivity and identifying cost savings. So do not see them as a cost burden, see them as the opportunity to analyse your business and make it future proof for whatever events may come our way.
While I am afraid I can’t offer any great predictions on prices, I suggest focusing more on the things you can control based on the agenda in front of us, and build in some further resilience to our farms to keep them successful and relevant in the future.
The challenges in our sector are many and we have a lot of change coming in a relatively short period of time. We have a great industry that has shown before it can adapt and chance and we will need to start this journey sooner rather than later. Resilient yes, but let’s also show the sector can be flexible in the future and to do that we will need support from the food industry and consumers to keep the industry successful and continue to be supported by the public over the next decade.