Farm businesses' Covid response shows 'agility and resilience'
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The response to Covid-19 by many farm businesses has demonstrated the "agility and resilience" of the sector, according to an agricultural finance specialist.
Brian Richardson, Virgin Money’s head of agriculture, said farmers had "focused on the challenges ahead" despite the uncertainty caused by the pandemic, with "an impressive number" diversifying their enterprises.
He was commenting on the results of a survey of almost 300 farmers carried out in December 2020 by Virgin Money brands Clydesdale and Yorkshire Bank. The aim was to take stock of the agricultural sector and farming customers’ changing priorities.
The farmers were consulted to understand current and emerging industry trends on themes including Brexit and the impact of coronavirus, as well as future priorities and investment plans.
Mr Richardson said this research had provided an important snapshot of farming opinion and highlighted the larger-than-expected extent to which farmers were recognising the importance of climate emissions to their operations.
While it was perhaps not surprising that Covid has had mostly negative impacts for 43 per cent of farming customers, the survey showed that eight per cent had benefited – mostly due to increasing produce prices for beef and cereals.
A rise in supermarket demand had also reportedly helped some customers offset the collapse in hospitality demand, while others continued to face cash-flow problems. Overall, the survey suggested that Covid has had little impact on over half of agricultural customers, with the pain most felt by dairy and potato farmers.
Virgin Money also wanted to look at the future for agriculture, specifically on sustainability and the net-zero agenda.
“We felt it important to understand fully what our customers are thinking around planning for the future," Mr Richardson explained. "Perhaps surprisingly, almost a third of respondents had already undertaken a carbon audit, with that rising to over 50 per cent for the dairy sector.
"From these survey results, it is clear that our farmers are very aware of the wider sustainability agenda and its growing importance to the future of farming.
“Reassuringly, the biggest priority for 86 per cent of customers was the improvement of health and wellbeing for their workers on the farm, followed by tackling climate emissions.
"These results are very encouraging. Farmers have obviously, despite all the uncertainty, really focused on the challenges ahead and now have a clear direction of travel with sustainability not just being seen to be about the environment but also working conditions and employment.
“Another element really present among the responses was the very clear vision towards an agri-tech revolution, with an impressive 56 per cent of customers having recently invested in technology.
"Their focus for investment was around automation tools and precision farming, followed by a strong emphasis on renewable energy. The results showed that 63 per cent plan to bring these types of technologies onto the farm in the near to medium-term future.”
Brexit was a hot topic for farming customers, Mr Richardson said. The survey recorded that 44 per cent were feeling that Brexit would have a negative impact on their business.
Given that the survey took place shortly before the trade deal was agreed, he said, this was perhaps not surprising. However, it was a matter of concern in the findings that, in December 2020, 43 per cent of agri customers stated that they did not know what the Brexit impact would be.
Mr Richardson reflected on the role of banks with farming heritage in light of the survey responses.
“Across the UK, we are always talking to our customers through experienced agricultural managers but this survey gave us a good snapshot of present thinking," he said. "It points to the challenges ahead for the agricultural sector, and will help the bank to better plan our work with customers to support them.
“As we move forward, I am very pleased our customers have been happy with the bank’s response to Covid-19 uncertainty. Understanding their needs means we can be there for them even more.
"The significant uptake of carbon audits also shows a focus on taking the climate challenge seriously. Over the coming year we will work to facilitate these investments on customer priorities, including in agri-tech, productivity and the net-zero agenda.”
