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Maximise your assets to boost business

In Mid Wales, Myfanwy Evans is cooking up something a bit different on-farm. She runs a beef and sheep business in Snowdonia in partnership with her husband John, but has branched out to start a cookery school in a converted barn.

Myfanwy Evans at her new cookaway
Myfanwy Evans at her new cookaway
Maximise your assets to boost business

In Mid Wales, Myfanwy Evans is cooking up something a bit different on-farm.

 

She runs a beef and sheep business in Snowdonia in partnership with her husband John, but has branched out to start a cookery school in a converted barn.

 

Myfanwy Evans says: “When I retired as a home economics school teacher, I was not ready to stop. I wanted to do my bit to reconnect town and country and the origins of food which we produce on-farm.”

 

The cookery school, which opened in 2013, is one of a number of diversification projects Mrs Evans has opened, including holiday cottages and caravans. She also started a wool-making course in winter.

 

She says: “It is another bite of the cherry for us. When people come and stay in winter, it gives them things to do on-farm. “I have also given the cottages a Welsh feel with wool we have washed and spun ourselves. People like that.

 

They want experiences nowadays. They want to make memories from where they have been. “I welcome them onto the farm and show them what we do. It is something we in the farming industry have not done enough in the past.

 

We have all these assets under our feet so to speak. It is up to us to utilise them.” Mrs Evan’s courses and holidays show how farm businesses are rethinking how they use their assets, be that land, buildings or other resources, including the skills of family members.

 

Steven Thomson, a senior agricultural economist and policy adviser at Scotland’s Rural College, believes all farms should consider how to use their resources in different ways, not just for farming.

 

While diversification and added value are clearly things which are within the control of the individual farmer, some businesses may be restricted in terms of location, resources and available time, adds Mr Thomson.

 

“These are no risk-free enterprises,” he says, but if done well he expects diversified farm businesses will grow to become significant rural employers.

 

For Mrs Evans, her farm is close to a main road through the Snowdonia National Park, making it accessible for an increasing number of people ‘who just want to come and get out into the countryside’.

 

Huge lift She says: “We are so lucky with our location. Building up these other parts to the farm has given our business and lives a huge lift.

 

“It means we have a set-up we can bring and involve family members in, and leave to them in the future to continue and build on themselves.”

 

NatWest agricultural director Roddy McLean says wanting to ensure you are still involved in farming needs not be an obstacle for thinking about non-food production activities on-farm.

 

He says: “Every farm business should be continuing to look at the assets they have and exploring if they can be used in a different way.

 

There is a growing demand from Government for the farming industry to deliver efficiency and public goods. Farm businesses can get ahead of the curve by rethinking what they do and future-proofing themselves.”

 

Since Defra’s announcement last year of its plans to abolish and replace EU farm subsidies with measures to support farmers enhancing the environment, there has been another strand to discussions about what else to use farm assets for aside from food production; namely public goods.

 

Could farming for the environment become another option for farm businesses to use their assets in different ways?


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Myfanwy's Cookery School
Myfanwy's Cookery School

In the future, Defra says payments made to farmers will not be for food production, but for environmental goods, such as enriching wildlife habits, preventing flooding, improving quality of air and soils and planting trees.

 

Mr Thomson says: “In the world of business, focus generally is on the provision of profit through private goods without breaching regulations such as air and water pollution.

 

“For farming, however, the mix between private good provision [food, energy and fibre] and public good provision [positive externalities, such as clean water and carbon storage] is becoming ever more blurred due to changing justifications for public support payments to agriculture [public goods for public money].”

 

Farmers up and down the country are already capturing carbon and improving biodiversity on-farm, while also producing food.

 

Yet there are no markets as of yet to pay farmers for carbon storage, flood mitigation measures and biodiversity provision.

 

Instead, the Government has intervened to encourage land managers to provide these services through Pillar 2 and some cross-compliance measures.

 

Whether that changes with the UK’s post-Brexit farm policy, and farmers are incentivised to focus solely on public good provision with or without producing food, is still unclear.

 

Resources In the meantime, there is still much which can be done on-farm to use resources and assets more efficiently and effectively in producing food, says Mr Thomson.

 

More efficient livestock systems, for example, can reward the business through increased profits, but also minimise environmental impacts, such as waste and greenhouse gas emissions.

 

Mr Thomson says: “For many farmers, there is scope to do things better. There is no golden bullet; it is about little improvements to increase profitability and reduce environmental impact.

 

“I was flabbergasted with how much diesel farmers [in a trial he was involved in] saved by switching machines off and using a gauge to monitor usage.”

The garden of one of Myfanwy's holiday cottages
The garden of one of Myfanwy's holiday cottages

For more on succession planning, visit natwestbusinesshub.com, or email Roddy McLean at roddy.mclean@natwest.com

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