Facing up to change

In England, the recent publication of the Agriculture Bill heralds the start of the Government’s clarification of the impact of Brexit on the farming sector.

From the information currently available we know there is significant disruption to come in the way in which land is farmed and managed, and we anticipate a major shift in the occupation of land as a result.

While the Bill will not be enacted in Scotland, following its publication in October the Scottish Affairs Committee launched an inquiry to investigate how any post-Brexit agricultural system, in conjunction with Land Reform, can meet the needs of Scotland’s farmers and crofters. We eagerly await the outcome of the inquiry to understand to what extent policy will be influenced by Westminster.

Despite the differing policies north and south, opportunities will undoubtedly surface, but meanwhile the resilience of rural estates will be tested, and in particular those that are heavily exposed to farming.

As we navigate our way through this period of change, understanding the performance of rural businesses and being able to benchmark them against others remains essential in determining strategy and actions needed to meet the challenges ahead. Our 2018 Estate Benchmarking Survey confirms businesses are continuing to operate dynamically with all asset classes being worked hard.

Across the sectors reported, gross incomes continue to improve, with agriculture and residential property remaining the bedrock of the rural estate, owners have been giving renewed focus to opportunities for diversification with many privately owned estates looking to new trading businesses as a source of additional revenue and as a means of managing down the risk of the impact of Brexit on farm incomes.

Concurrently, one temptation may be to cut back on property repairs, which currently stand at 23% of gross income. However, history has shown that such an approach will only serve to create a legacy of lack of repair, which will impact on future performance due to a lack of demand for a poor product and the spiralling cost of overcoming years of no repairs. It is essential to keep residential stock at a level with market expectations.

There are real challenges ahead, which means estate owners will need to watch closely the impact of legislative and regulatory change on their enterprises and the impact they have on costs and associated income. Resilient estates will need to adapt and face up to change with a positive attitude whilst navigating the choppy post-Brexit waters ahead.

_{Read the articles within this publication below}