Agriculture: Five Great Challenges

20 October, 2015

Jeremy Moody, Secretary and National Adviser to the Central Association of Agricultural Valuers, spoke at Harper Adams University on Thursday 15th October on ‘Agriculture: Five Great Challenges’.

Opening with the observation that necessity is the mother of invention Jeremy commented that farming only adapts when it has to do so.

Jeremy identified his five great challenges as:

  1. Volatility.  Farming’s response so far has been to spread unit costs by taking on more land.  Attempts have been made to spread risks as well, but farming risks are increasingly connected.  Cost leadership is the answer, but ‘costs are like daisies’ – you cut them down and they grow up again.  Some farmers have responded effectively by moving further down the supply chain, for example the potato grower who now supplies chips to take aways.
  2. Output/acre ~ value/acre: We are generally growing low value commodity crops and with this we are seeing an inexorable shift to domination by combinable crops, wheat in particular.  The number of potato growers is predicted to drop from 2,000 to 1,000 over 10 years.  On the other hand, high value output enterprises are starting to appear.  For example vineyards in the south of England, and orchards.
  3. Resources: capital has been readily available at very modest cost, but the rising challenge will be the repayment of the capital itself rather than the servicing charges.  There are 60,000 farms which keep only one person in work.  Employed labour is concentrated in the pig, poultry, horticulture and dairy sectors and many of these employees come from abroad.  There are gaps in the age structure of farmers and it will be a continuing challenge to recruit and retain skilled labour.  Foreign workers are no longer confined to handwork in the fields but are steadily moving up the value chain – without its input we would not be able to sustain much of the higher value cropping leaving farmers with little choice but to revert to monocultural wheat.  Soil health and the resilience of natural capital is also a key part of the resource challenge.  We need to be able to put the right values on the health of soil.  This also draws in the value of water, and abstraction rights for irrigation in particular.
  4. Science and productivity: There has not been much growth in productivity since the 1980’s yet we know that precision farming can increase yields.  There needs to be spare capacity in management in order to make time to consider the possibilities and implement new approaches.  Our increasing reliance on data raises questions about its ownership, for example at the end of tenancies, from one farmer to another, from contractor to farmer.  Actually making effective use of all the data and technology now at the farmer’s disposal is also a large part of this challenge.  Modern machines have enormous technical capacity, but in practice little of what is available might actually be used.
  5. Progression: Flexibility must be the watchword in considering progression.  New entrants need not be young.  Sideways entrants from other sectors can bring just as much and more.  The wonderful smallholding opportunity for the 25 year old can be prison for the same 40 year old.  The industry is dominated by family businesses, 90% of farm employers and 30% can trace their farming origins to before 1900.  Increasingly we may see 90 year olds leaving farms to 70 year olds.

We cannot be the world’s cheapest producers, it is therefore essential that we focus on high input and high output farming with a long term view to ensuring the health of the basic resources on which farming and much else depends.

What do you think of Jeremy’s Five Challenges for Farming?  Here’s the video if you would like to see more:

Source: Agriculture: Five Great Challenges by Jeremy Moody

This video was filmed at Harper Adams University on 15 October 2015 in front of a live audience of students and staff in the Weston Lecture Theatre

Concise Rural Taxation 2015 now available

18 October, 2015

This year’s edition of Concise Rural Taxation is now available.  See the tab for further details of this year’s content, how to order and price (held at the same level as last year).

How to pass the Agriculture Competency of the RICS Rural APC

23 September, 2015

All candidates for the RICS (Royal Institution of Chartered Surveyors) Rural Assessment of Professional Competency (APC) must satisfy the examiners that they have a sound agricultural knowledge.  Three levels are specified and all candidates must achieve at least Level Two while some will opt for the higher Level Three.

What do we know about these requirements?  The RICS guide tells us that at Level Two we must demonstrate application of the principles and systems of practical farming methods.  This might involve questions on crop rotations, cultivations, general husbandry and marketing.  Animal welfare and record keeping can also be questioned, as well as the wide body of regulations which affect farming in one way or another.  Candidates are expected to know how to prepare detailed farm finance plans and budgets.

At the higher Level Three candidates are expected to have provided professional farm management advice (the provision of reasoned advice to stakeholders on the management and practical application of appropriate methods and requirements of farming, according to the guide).

Alongside all this, you are also expected to know about the utilization and cost of farm buildings.

Quite a tall order, but nevertheless essential knowledge for a rural surveyor who wishes to work for farmers and landowners while maintaining credibility with the client.

This is a professional examination and there is no substitute for direct experience and, just as important, intelligent engagement with the farming industry.  Regular reading of the trade press can help to imbue current market information and trends.

But even the best informed of candidates can struggle under examination conditions.  With a view to this we have developed a new web class with RICS Training, an Agriculture Competency Masterclass which will run on Friday 2 October at 12.00 for 90 minutes.  It won’t take you from zero to hero in that time, but it will help you to prepare soundly for the professional interview.  If any participants would like me to email me a copy of their agriculture submission at Levels 1, 2 and 3 if available I will happily consider them for anonymous inclusion in the class so you will get the benefit of direct feedback while adding to the value of the class for all participants.

The class costs no more than £30, less if you or your firm are a subscriber and details and bookings can be arranged here: RICS Agricultural Competency Masterclass

Disinherited? Don’t lose heart. Disinheriting? Take care …

28 July, 2015

‘Woman rejected by mother in will wins £164,000 inheritance’ according to the BBC’s headline.  Melita Jackson died on 29 June 2004 leaving her net estate of £486,000 to a selection of charities.  Melita had had little if anything to do with these charities during her lifetime.  Sadly Melita had fallen out with her only child, Heather Ilott.  The pair became estranged when Heather was 17 or 18 years old because Heather ran away with a man who was to become her husband and father of her five children.

Heather’s claim against the estate of her late mother has  reached its latest decision from the Court of Appeal having been up and down from County Court to High Court and back up again to the Court of Appeal (Ilott v Mitson CA [2015] EWCA Civ 797).  Mrs Ilott’s latest appeal was that an award against her mother’s estate of £50,000 was insufficient for her maintenance and the award should be increased.  The Court of Appeal has set aside the award and substituted its own award of £143,000 plus up to a further £20,000.  Why and how? Read the rest of this entry »

Inheritance Tax Residence Exemption: Even more smoke and mirrors from the 2015 Summer Budget

9 July, 2015

The fanfare for this Summer’s July Budget trumpeted the arrival of a £1 million IHT exemption for the family home.  The detail is not so clear cut.  Chancellor George Osborne has introduced a new residence exemption from IHT.  It works like this. Read the rest of this entry »

Summer Budget 2015: Rural Points – More smoke and mirrors

9 July, 2015

The Inheritance Tax changes will be the headline grabbing feature for many rural property owners.  But is all what it seems?  A few other budget points also need attention if you’re interested in rural property and farming.

Business-wise the decision to set the Annual Investment Allowance at £200,000 permanently from January 2016 is important, and relatively welcome. Read the rest of this entry »

Valuation Revision Tutorial for probationer agricultural valuers

2 July, 2015

Here are some slides I used in support of a very short valuation update for probationer members of the Central Association of Agricultural Valuers at their examination tutorial held on 2 July 2015 in Aberystwyth


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