FARMER AS ENTREPRENEUR

  • Written by Andrew Davis
  • Posted on Mar 03, 2022
  • Articles

To be successful, a farmer needs a broad range of skills.  Most are the sole managers of their business so, as well as the technical expertise to master the husbandry, they need all the business skills, planning, financial, legal, staff management, sales and purchases.  Simply being a good farmer is not enough to guarantee a profit, alternative sources of income are also required.  As the Basic Payment is phased out over the next five years, farmers will need to be entrepreneurs to survive.

The farmer as entrepreneur was the theme of the latest Edith Mary Gayton Memorial Lecture given at the University of Reading last week.  Edith Mary Gayton was an agricultural graduate of the University of Reading in the 1930s.  Little is known of her later career and life but, in his will, her husband made a bequest to Reading in her memory stipulating that the funds should be used in the field of agriculture and management.  The annual Memorial Lecture is one use of those funds.

The speaker was Nick Green, Farm Operations Director for Alvis Bros, farmers and cheese-makers near Bristol.  He described the attributes required of an entrepreneur, the willingness to take risks and learn from failure, the understanding of the customer, sales ability, the exploitation of technology, to talk to others and learn from them.  He must not be afraid of the road less travelled, to spot opportunities and take advantage.

He described the business for which he works, set up by the Alvis brothers in 1951.  Today, extending to 4,000 acres, of which 1,750 is arable, 2,250 grassland, the central enterprise is the dairy herd of 1,000 cows of which 250 are organic.  The milk is used to make cheese and the whey fed to pigs with 18,000 finished each year at 35 to 120 kg.  It is a virtuous cycle with each element contributing to the others as the manure from the livestock is spread on the arable land growing crops for animal feed.

The cheese is sold to top retailers and exported to forty countries.  There is a constant search for new opportunities and innovation with an investment of around £500,000 each year.  The latest idea is an anaerobic digestion plant using the lactose in the whey as the feedstock, partially or wholly replacing the pig enterprise.  Considering the number of animals on the farm, it is a surprise that this has not been explored before but it is a big step, requiring a large investment, especially if the pig enterprise is to close.

Listening to the lecture online, I was struck by the similarity to the story of Denhay Farms.  Also founded in the early 1950s by two dairy farming families, this business is a few miles south near the Dorset coast.  The structure is the same with dairy cows producing milk that is turned into cheese with the whey fed to pigs.  Here, however, it is the award-winning bacon that is the primary product rather than the cheese, as in the case of Alvis Bros’ Lye Cross Farm.  They are both prime examples of integrated farm businesses that add huge value to their products.

A regular feature of the Oxford Farming Conference is the slot given to successful young entrepreneurs.  I have heard many inspiring stories over the years of young farmers that have seized opportunities to expand their businesses.  Often that growth has been incremental, one venture leading to another.  I remember one who joined his father on the family farm in Kent.  Like many others, he sought a new enterprise to demonstrate his ability and hit upon free range laying hens.

He bought an egg round in London, delivering to restaurants and caterers, adding value to his product.  He noticed that many of his customers had spent cooking oil to dispose of so he took it off their hands and used it as a biofuel in his delivery vans.  Whilst driving round London delivering eggs, it made sense to broaden his offer so branched out into other products his customers needed.  Before long he was creating ready meals and had become a full-scale food processing company.

I remember another, from Wales, who also built his business incrementally.  As he described each step he said ‘they told me it couldn’t be done so I borrowed another million from the bank and did it anyway!  All you need is the sheer scrotal capacity!’

These examples of entrepreneurship are all of adding value to farm produce but there are many others who have gained income from diversifying their businesses away from farming.  Perhaps the most common is the conversion and letting of redundant farm buildings as farmers look to exploit all their assets.  Tourism and recreation are also popular with farmhouse bed-and-breakfast, holiday lets and game shooting in the forefront.  There may well be opportunities to restore wildlife habitat, to plant trees or rewild poorer farmland, but that will depend upon the level of grants available through the forthcoming Environmental Land Management Scheme and other sources of funding.

Farming is going through a period of change unprecedented for fifty years and many farmers may not survive.  Indeed, I have heard that Defra expects a third to go out of business in the next few years.  Those that thrive will be those run by entrepreneurs who identify business opportunities and seize them.  Such skills have not been common on farms in the past but will prove vital now and in the future.