Business Models to unlock future farming potential

The CLA has been instrumental in the delivery of a new free resource on farming business models that has been published this week. The handbook provides up-to-date, practical advice on business models that could improve productivity and profitability. It will be a valuable resource for those considering next steps for their business. It provides independent information and analysis to inspire and inform options for a full range of business situations, including:

• Established businesses looking to drive efficiencies, expansion or diversification;
• New entrants and ‘farming entrepreneurs’ looking for land or premises, and,
• Those who wish to leave the industry.

The handbook has been published with the support of the Agricultural Productivity Task Force (APTF), a collaboration between the agricultural industry and UK Government to bolster the productivity of farming and growing. The CLA chaired the Rural Infrastructure working group, producing summaries of the case for government intervention to support rural connectivity, electric grid connections and supportive tax regimes, that are being used by APTF members for lobbying, and the Business Models Handbook.

The handbook is published at a time when many businesses are considering their future. With new agricultural policies, changing global trade flows, need for greater environmental responsibility and climate action, and most recently extreme volatility in input costs, few businesses can stay the same. However, the farming industry has a history of adaptation and innovation in the face of change and challenge.

The actions taken by faming businesses in response to these changes will be very individual. For established businesses it may be a case of reducing risks, so focusing on the core business and doing it well, but it might also be a trigger for change. For many this will be about modifying farming systems, updating equipment, and investing in new technologies and infrastructure or investigating new market opportunities. However, it is also important to consider business structure changes such as taking on or letting go of land or collaboration with others on machinery and labour, for example. It might also be the right time to bring in new skills to the business through joint ventures, allowing a step back from the day to day farming, or indeed letting the land.

There is no shortage of people wishing to make a start in running their own farming business and the information and advice in the handbook is equally relevant for those seeking land or premises. Many new entrants come with a strong business plan, and can bring a fresh perspective, taking many of the industry challenges in their stride. Often, all they need is that first opportunity to get started. This could be a straightforward land letting agreement or something more innovative in the form of a joint venture that can be of value to both parties.

The handbook provides a summary of the main options available, with analysis of their pros and cons, helping people to make an assessment of their own situation and preferences. In most situations further legal and tax advice will be required when setting up an agreement. Remember that CLA members have access to free specialist advice from the national or regional teams.