It will come as no surprise to many that UK agriculture has been hit hard recently by economic uncertainty and volatility, with many farmers feeling the effects. Rising costs of inputs, reduced subsidy payments, and higher interest rates are set to contribute to a sharp drop in farm income this year.
The UK Dairy industry, which was expected to perform relatively well compared to other agri-sectors, is feeling the impact too, with milk prices dropping from heights of over 50p late last year to below 40p, falling below break-even for many farmers.
In turbulent times like these, many farmers turn to industry professionals for financial planning and advisory - and while there does continue to be a steady increase in demand for advisory, the majority of farming businesses are still not producing financial plans.
As Andrew Suddes of Promar International put it recently, “for farmers, planning is like going to the dentist. We know we need to go, but we don’t go as often as we should - maybe we think we’re safe or we aren’t going to like the result at the end of it. But fundamentally, just like any other business, planning is an important part of running a farm”.
We continue with the narrative that “farmers need to be planning”, which is true, but it's important to remember that agricultural planning can be a complex and confusing process, particularly in the current climate. There are a range of factors to consider, which is difficult to do whilst also juggling the many challenges of running a farm - and these can act as a real barrier to farms stepping into planning. Much of the industry messaging around financial planning focuses on specifics - what costs to cut or what figures to include in your plan. This is obviously important, but alongside this we need to consider how farmers feel about the planning process, and what the outcome means for them.
“Investing in managing your businesses finances is the same as investing in a tractor or land - the return might be different, but there is a return. It's the control of your business and the confidence that comes with that. That's where the role of the advisor comes in, it's not only about getting a plan completed, farmers need to feel like it's time well spent, and that comes in those strong advisory conversations based around quality information.”
That feeling is just as important as the plan itself - the farmer is confident they know what they need to do and can see the path forwards. Perhaps, as Andrew said, the message to farmers should be “if you get the right person in to help with your planning, with the right tools and information, you will feel better for doing it. You will see the value of planning and your business will benefit from it, it's as simple as that”.
This is a core part of Figured’s mission, helping bridge that gap between farmers and advisors like Andrew, making it easier to surface the right information and produce quality financial plans.