UK farmers working together smartly can improve productivity and profitability
In a marketplace where buyers and suppliers are consolidating, farmers need to give serious consideration to improving their productivity and profitability. Collaboration to build economies of scale, access new technology, add value to crops or increase negotiating strength are options that should be on the table.
Machinery depreciation accounts for 20% of the fixed costs of an average arable farm (Defra, Farm Accounts in England 2017/18), and many machines are not used to their full capacity. Significant savings can be achieved by sharing a piece of machinery such as a seed drill with a neighbour; but the success of this depends upon the relationship between the individuals and being prepared to accept it will demand a little planning and communication each season. Sharing doesn’t necessarily have to be with neighbours either: for instance a farm in the north could share a combine harvester with a farm in the south where traditionally the harvest is earlier.
Deeper collaboration can deliver more significant savings. There are successful whole farm sharing agreements and groups of farmers who have formed a joint venture farming company to undertake the field operations on their farms. Planning and structuring these joint ventures is just as important as implementing them.
Farmers can also work together to trial and develop establishment and husbandry practices suited to their soil and conditions for “new” or novel crops. The area of oilseed rape grown in the UK has declined by 19% since 2012 (AHDB Planting Survey), leaving many farmers looking for an alternative break crop. Soya is a possible option, but UK farmers have limited experience growing the crop. Sharing knowledge locally could help farmers maximise its performance quicker and the risks are lower than if each farmer planted a small area of the crop independently.
At a larger scale farmers can join co-operatives or farmer-owned companies, such as buying groups, to benefit from collective negotiation or add value to their produce. While there are over 400 agricultural co-operatives operating in the UK, including some very significant businesses, they have not been embraced to the extent seen elsewhere in Europe. France is home to 2,850 agricultural co-operatives with a collective turnover of £72 billion, compared to £7.7 billion in the UK during 2018. Co-Operatives UK calculates that the UK’s agricultural co-operatives have a 6% market share, compared to 55% in France.
Producer Organisations formed in the horticulture sector work together to add value to their crops, shorten supply chains and crucially strengthen their negotiating position relative to the small number of large buyers for their produce. With the support of the EU Fruit and Vegetables Regime they have successfully boosted productivity through investment in the latest technology and targeted crop breeding on a match funding basis. UK strawberry production is the stand-out success story: strawberry yields increased by 170% over 20 years and self-sufficiency climbed from 49% to 69%. The Government is supportive of the Producer Organisation concept and plans to introduce an improved scheme after the UK leaves the EU. This should create an opportunity for arable farmers to collaborate in a new way, because the Government intends to open up the regime to a much wider range of agricultural products, including cereals, seeds and sugar.
Market share of farming co-ops by country
Source: Co-operatives UK
Sustainable soya beans
- 3.2m tonnes of soya bean equivalent consumed in the UK
- 8k tonnes of soya beans grown in the UK
- 0.25% of our soya bean demand is currently supplied by UK farmers. Growth potential is significant: the UK crop can be guaranteed to be GM free, and its sustainability credentials more easily monitored too. A report for the UK Roundtable on Sustainable Soya calculated that in 2017 just 20-30% of soya meal consumed in the UK was purchased to a certified or verified standard with a “sustainable” or “responsible” claim. The crop offers farmers rotational and weed control advantages too, because it is a break crop with an early harvest and short cropping window.
Read the articles within Delivering Future Arable Performance below.