Farmers need to adopt a more ‘corporate’ mindset, and now is the time to ensure they are running a profitable business to survive into the future, according to Roddy McLean, NatWest director of agriculture.
Mr McLean said he often heard farmers say, ‘I am just a farmer; I grow crops and rear cattle or sheep’.
But he suggested there was no such thing as ‘just a farmer’, with farmers the ‘cornerstone’ of the British countryside, looking after the land and the environment, enhancing its value.
He added they underpinned the entire economy.
“Much of the work the farming community does goes unnoticed and often unappreciated by society,” he said.
“Gone are the days when good husbandry of livestock and crops meant the farm was successful, though it is questionable if that was ever really the case.”
Mr McLean also called on farmers to adopt a more ‘corporate’ mindset to cope with impending challenges, assessing all assets and how they can deliver for the business now and over the long-term.
With farm support to change ‘significantly’ in the next five years, he said now was the time to run a detailed internal audit to work out what can be ‘sweated’ to generate the best returns.
“A mantra which often works when we talk to farmers is to remember one thing: run a business that works for you and not one where you work for the business,” he added.
He advised farmers to start with the core farming assets and ask themselves when they last truly challenged what they were doing.
Farmers should look at their farms as though they were bidding for a tenancy, with a blank slate, and decide how they would run the business.
“It is also worth considering how else you might be able to use assets on the farm now and in the future, some of which you may have discounted from a farming perspective,” he said.
He suggested considering whether the farm could deliver ‘multifunctional land management’ and to reconsider options previously written off.
While for many people the right thing to do would be to concentrate on farming, Mr McLean said the key was to have at least questioned what the farm was doing.
“It is not the answer per se that is important, but the process you have undertaken to ensure you have your business set up to be resilient and sustainable now and into the future.”
Options to consider