The Agriculture Bill heralds a new era in the rural economy, challenging everything from tenancy arrangements to supply contracts. The Bill itself is simply enabling legislation, with much of the detail still to be determined.

Certainty for the industry is needed as soon as possible; we know little more than that the Basic Payment Scheme will have gone completely by 2027. There is, therefore, no better time to review business strategy and take sensible steps to enhance the resilience of the farming business for the future. Our advice is that all farming businesses take the time to review these five key areas:

1. Markets: Diets are changing, with red meat in the firing line and novel foods on the rise; but we all need to eat. Is it time to explore new cropping ideas, emerging food trends or export markets? Having a clear idea of what the end customer wants is essential.
2. Risk: Farming is seen as an inherently volatile and risky business, but practical steps can be taken to mitigate market, weather and trading risk. Measuring performance through benchmarking is a crucial element of evaluating risk, and should be used to identify performance issues across the business and steps that can be taken.
3. Costs: Reducing overheads is one element of cost reduction. Could an investment in farm infrastructure reduce labour and machinery costs? Tackling operating costs is another; would a focus on margin over yield deliver a better net return on investment for example? Honest accounting and performance analysis for time and costs is the first step in developing alternative cost saving strategies.
4. Diversification: As a business strategy, diversification needs to be approached with caution due to the demands that a new enterprise can place on existing cash flow and management time. However, in a post-BPS world, it is time to ask again whether there is a diversification project that could increase business resilience. Savills Rural Research finds that diversified businesses continue to increase their overall returns, countering market volatility issues.
5. Innovation: Finding solutions to problems is a key element in turning problems into opportunities. Whatever the problem within the business, it can also be an opportunity to make a change. Given the pace of technological change and relatively slow uptake in farming, this is a key time to consider how investment in innovation could enhance overall business resilience.