DEFRA 2019 Farm Practices Survey
Key points from UK farms
On the 4th April, the DEFRA 2019 Farm Practices Survey for England was released. This covers data from a sample of about 2,800 farms which was gathered in October 2018. Given the changes in prospect for the industry, the picture which the survey paints is by no means wholly encouraging.
Speed of innovation within the UK Agriculture Sector
Certainly, there is some evidence that businesses are looking at ways of improving profitability by innovation. 54% of those sampled had taken steps in this direction within the last 12 months. A further 33% were intending to introduce significant change within the next year. Larger farms and dairy farms were marginally the most likely to innovate, and general grazing units the least likely.
There was also encouraging news on business management, with 75% of farms using market data to help in their pricing decisions and 88% managing risk to some extent (although 40% felt they needed better tools in this respect).
Farmers missing out on the benefits of collaboration
In other ways the survey findings were less optimistic. When looking at collaboration with others in the industry, only 29% of the sample were in buying groups, 19% were sharing machinery and 12% sharing labour. On the livestock side, 22% were keeping livestock for other farmers and 12% were contract rearing. As the withdrawal of direct subsidies moves closer, this must be one area where asset usage can be optimised and costs reduced relatively easily. It is disappointing that these practices seem to be falling in popularity.
Making Tax Digital roll-out in farms
Given that Making Tax Digital for VAT started on 1st April, the usage of accounting software should give rise to concern. Only 38% of those surveyed are using accounting software. This is exactly the same figure as that found in MHA survey carried out in January 2019.
“There is some good news on innovation in this survey. However it is worrying that cooperative working seems to be becoming less popular – it can be a ‘quick win’ for those looking to cut costs. The software findings confirm our own survey taken at LAMMA. Perhaps there has been a massive take-up of software in the last few weeks – or maybe many of the smaller units will adopt the traditional ‘put it in a bag and let the accountant sort it out’ approach. We will find out over the next few months but ultimately there will be penalties for those who do not comply with the new rules.”
Contact our Agriculture team on 01903 234094 to find out how we can help your rural business.