2022, and the tide is going out…
Duncan Rawson, EFFP Partner
“It’s only when the tide goes out, that you learn who’s been swimming naked”.
I love this quote from Warren Buffet. He is making the point that companies with flawed business models can look healthy in good times, but when the economy weakens, they are left exposed.
I think that 2022 is going to be a year when the tide starts to go out for many in agriculture. Our industry is one which has been cosseted in the blanket of subsidies for as long as most of us can remember. A blanket which has, in my opinion, stifled innovation and productivity. It has, perhaps, kept those who are not the best farmers in business.
But this is all going to change. As the tide goes out on subsidies and the pressure increases on farmers and growers to produce more sustainably, we are going to see who has been swimming naked. We are going to see who hasn’t been adapting their business models to face into the future.
Many farmers are still not accepting that change is coming. Some are basking in a world of high prices, unaware that trade deals, the impacts of climate change, and cost inflation to name but a few, are likely to have huge impact across the industry. Unlike anything that has been seen since the repeal of the corn laws in 1846.
I believe with a passion that there is a bright future for agriculture in the UK, but sadly not for everyone. There will be casualties over the next few years. For those with an open mind and a willingness for change however, the opportunities will be considerable. But we cannot just base our strategy on hope, the hope that we are still standing at the end.
We spend our lives working with food companies. Over recent years they have become increasingly focused on the sustainability of their supply chains, driven by the weight of consumer demands. Initially concerned about their own internal processes and procedures, many are now looking along the supply chain, towards the farm gate. Whether we like it not, most of the environmental impact within an agri-food supply chain takes place on farm. Food companies understand this and are exercising their influence.
For the more progressive, this should be viewed as an enormous opportunity, rather than something to fear. Food companies have both the influence (they buy what agriculture produces) and resources (profits) to drive change at farm level and this what they are going to do. For farmers and growers, the key here is to embrace change. To work together with food companies to deliver what end consumers are demanding. Being proactive and engaged, will ensure that the farmers voice is heard. This will ensure that the interventions and requests being asked for by food companies are practical, long-standing, and importantly, add value to farming businesses.
So as and when the tide goes out… will you be one of those swimming naked… or one of those embracing change and making sure you are at the table.
For more information about EFFP and the work we do, please get in touch: email@example.com or 07834 337346.
Photo by Matt Hardy on Unsplash