L ooking For ward - Farmin g in Scotlan d in 2023

by Brian Richardson, Head of Agriculture, Virgin Money

“It is that time of year when I am asked for my thoughts on what’s likely to happen in farming in the next 12 months This is a slightly thankless task given all the variables to foresee and unexpected challenges that will inevitably happen I don’t think many were predicting a full-scale war in Ukraine a year ago or foreseeing the challenges that would follow in energy and food consumption – not forgetting the tragic consequences for the people of Ukraine

Farmers in Scotland have been awaiting new policy from the Scottish Government so they can plan effectively for what’s to come. This policy has been slow to emerge and the policy document that appeared toward the end of 2022 was met with much gnashing of teeth and brouhaha from some quarters!

Given any change in support arrangements will inevitably create winners and losers, that is perhaps not surprising, but the lack of alternatives makes it difficult to see where this will end, other than clarification that new support arrangements are on the way with a greater focus on environmental and net zero measures Food security has of course moved up the agenda given Covid and the war in Ukraine, but I suspect the focus on the environmental agenda will return with policy designed to move this agenda forward

Farming is changing In England that change has been marked with a greater focus on productivity and efficiency and it is important Scotland does not get left behind That said, perhaps letting England ‘test’ new policy and how it works in practice may not have been entirely bad We can learn from this and build more robust and workable schemes to achieve environmental goals that are unlikely to go away

Getting these in place sooner rather than later will be helpful and avoid a lot of change happening at once Hopefully more progress can be made on policy development in Scotland in 2023 to set a clearer path for the future

The impact of Ag inflation, now quoted at around 30%, has been softened in 2022 as farmers have used up old stock and made some temporary savings on usage. That will change in 2023 as the full effect of this extra cost hits farms, with no immediate sign of any reductions At the same time, output prices, which had in many sectors increased during Covid and at the start of the year, are now again being squeezed both by reduced household spending and by the supermarkets looking to keep prices down

I suspect next year will be a tough one for many in agriculture. The squeeze on farm incomes seems pretty inevitable Despite concerns over food security, Government seems to view this as a supply chain issue the market will sort out, so we are reliant on food manufacturers and supermarkets to do the right thing, not something that has shown to be effective in the past!

Hopefully the squeeze on incomes will not be as bad as many fear but it is certainly the time to look closely at all aspects of your business Farmers need to focus on what they can control; an iron hand on all costs, testing the market where possible and reviewing all inputs. It is a time to review business efficiency and productivity What does the farm do well and what could be better?

There has never been a more important time to sit down with your professional advisors and review your business, both in terms of where you are going with support payments but also taking a deep delve into how you run your business and the longer term plans you might have. There is some grant money available via the Farming Resilience Fund for professional advice on planning and business efficiency so you can get any advice paid for

So perhaps more a year of uncertainty, but no doubt once again unforeseen ‘events’ will shape what happens in the coming year ”