Region’s farmers less optimistic, says survey
Farmers are feeling less optimistic about the future than they did in 2014, according to a survey conducted in partnership with Moore and Smalley.
The survey, undertaken at the LAMMA 2015 show, is based on interviews with over 100 farmers from across the region.
It was conducted by MHA, a UK-wide group of accountancy and business advisory firms, of which Moore and Smalley is one of nine UK members. Findings of the survey showed:
- There is a continued desire for growth and diversification amongst the farming community, but less optimism than in 2014
- There is an increase in the number of farmers undertaking co-operative farming arrangements
- Succession planning is of great concern for 1 in 10 – noticeably higher than in 2014
The reduced optimism reflects the reduction in cereal prices in recent months, although 59% of respondents (down from 69% in 2014) still predicted overall growth, with 23% expecting moderate to high growth. This year’s survey also saw a 4% reduction to 49% among those hoping to increase acreage over the next 12 months. Concerns remain about the availability of land – and prices continue to be a barrier.
For 2015, diversification is on the agenda for more farmers (up to 55% from 40% last year), including an upsurge in interest in harnessing renewable energy sources. Accountants remain the primary source of guidance and support for the sector.
Liz Cliffe, head of the farming and rural business team at Moore and Smalley, said: “It is good to see there’s still a healthy optimism for growth and the desire to diversify among farmers, however, the survey indicated that 11% of those surveyed felt that succession planning is still ‘of great concern’, which is noticeably higher than in 2014. With such a high concentration of family businesses passed on from one generation to the next and with the current favourable tax rules, succession planning is a vital consideration in securing the future of a farming business.”
Most farmers participating in co-operative farming arrangements are involved in contracting and this year’s survey indicates that 66% of respondents now undertake contracting, a total increase of 10% compared with last year’s results. However, Liz Cliffe warns that careful consideration should be given to any tax implications arising from undertaking these arrangements.
As the agriculture sector is affected by unique and variable factors ranging from the weather to the cost of land, it is important for farmers to seek specialist advice to assist with their growth plans.
Liz added: “It is encouraging to see that 46% of respondents indicated that they would turn to their accountant for financial advice and support on key issues such as succession planning and growth plans.”