InsightsInsight - Agriculture and Rural - POSTED: January 6 2022
Agriculture and rural business: The hot topics for 2022
What do rural business owners need to consider as we look ahead to 2022?
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As a new year begins, we take a look at the themes that are likely to be the hot topics in the agriculture and rural sector over the next 12 months.
Sustainability and subsidies
The issue of sustainability is not a new one and we have already seen an increased emphasis on the use of natural solutions, such as renewable energy, and natural capital in agriculture. This is likely to continue to gather traction in 2022, particularly as we look to world leaders to deliver the outcomes of the recent COP26 summit. The UK Government has also set out national policy changes to support sustainable farming practices in its Agricultural Transition Plan (ATP), which is now entering its second year. The plan directly links sustainability and subsidies, a framework which will affect all farmers.
Spending on Direct Payments will reduce by 15% this year. To alleviate the financial impact of this, farmers who currently get payments under the Basic Payment Scheme (BPS) may want to take advantage of the Sustainable Farming Incentive, which launches as part of the Environmental Land Management scheme. The scheme will pay farmers to manage their land in an environmentally sustainable way. This is one of a number of funding schemes the government is implementing this year and up until 2027, in its drive towards supporting sustainability. Rural business owners will need to consider the impact of these new payment schemes and use the ATP to inform future business planning and mitigate against the impact of the phase-out of the BPS.
Farming technology and ‘Agriculture 4.0’
With the focus on the sustainability agenda also comes a focus on new technologies and techniques, including an increase in cross-industry initiatives. Techniques such as hydroponics and technologies such as vertical farming have already been successfully adopted by some in the sector and are growing in popularity. It is likely that we will continue to see innovation linked with incentives such as those mentioned above and again this should inform future business planning.
Business owners who embrace the introduction of new technologies will need to consider the wider implications as well; health and safety, data protection and the impact on current or future workforce for example. Whilst there are strong arguments for incorporating AI and automation, there is also a clear argument that introducing new technology without the knowledge to use it to its full capacity is of limited benefit in terms of improving productivity. It is therefore important to recognise that investments in technology also need to be accompanied by investments in the workforce, whether that be through training or external recruitment.
Recruiting for the future
The combination of Brexit and COVID-19 has impacted recruitment across all industries, with few immune to recruitment challenges. Agriculture in particular has felt the pinch this year, with the impact of COVID combined with new immigration requirements post-Brexit resulting in many of the foreign workforce deciding to return to their home countries.
Looking ahead to this year, and beyond, rural business owners need to consider the changing priorities for their workforce. For some time there has been a need for more young people to enter into agricultural jobs. The government is addressing this, to some extent, with financial incentives; this year, as part of the ATP, an exit support scheme will offer payments to older famers looking to retire, to allow younger generations to enter the industry.
Alongside government incentives, agricultural employers need to ensure they understand their workforce demographic. Young people entering the job market have different priorities to older generations, with value placed on more than just their pay packet. There is a need to improve employee wellbeing support across the sector; RABIs ‘Big Farming Survey’ in 2021 found that one-third of the farming community is likely to be possibly or probably depressed, with over half experiencing anxiety as well as poor physical health through pain and discomfort.
Historical challenges also still need addressing; skills gaps and lack of training for example, which are a priority for younger generations, who place more importance on personal development. More emphasis on the growing use of technology in agriculture could be one possible solution, showcasing the potential for more highly skilled employment.
While the points above will be familiar to those in the agriculture sector, it is important that they remain high on the agenda for those who want to ensure the longevity of their rural business. A robust and informed business planning process is key to futureproofing your business against potential challenges and also to taking advantage of the opportunities that are likely to present themselves over the next 12 months and beyond.
This article was first published in the January 2022 edition of South East Farmer.
This content is correct at time of publication
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