Welcome to the Spring Newsletter
We are on the edge of a global recession, as governments grapple with striking workforces and the contrasting desire for increased productivity. The global disruptions are driven by the energy crisis, labour shortages and demand imbalance.
2023, the start of a new year and a new era of uncertainty. How we approach 2023 will define us and our businesses. With bank interest rates at four percent and Ag-inflation over 30 percent it is difficult to see how we will return to what was the familiar past.
So, the question we should be asking ourselves is “how do we adapt and perhaps even end up stronger and more resilient in 2023?” as what we were good at last year might not be sufficient this year!
Existing businesses will have to evaluate, understand, and react to see how best to adapt and if a business is entrepreneurial, we must be bold to give it a go! We do not always get it right and it is not always about how we fall but how we pick ourselves back up.
What we do know is the global population is growing at such a rate it is estimated we will have to increase food production by as much as 68 percent by 2050. Satisfying this demand in an already struggling planet, when you consider that food accounts for 26 percent of greenhouse gas emissions is going to be a challenge. We must all work together to maintain and restore our natural resources our businesses heavily rely on.
What innovations, collaborations will revolutionise our food system?
New farming methods: not just through mechanical process but transformation driven through digital tools and data. For example, through automation, including autonomous tractors and drones; and precision farming by developing monitoring systems to make farming more efficient. Other key methods to look out for; localised urban farming reducing food miles and vertical farming with hydroponics.
Finding new ways to create food: the meat sector, in addition to the financial challenges in 2022, has experienced devastation from bird flu and swine fever leading to no end of problems for producers. Whilst traditional meat sector is set to continue cost saving and striving to be more sustainable, the alternative proteins are looking to race ahead by offering the consumer what they want from plant-based meats – all the taste but none of the guilt.
Finance: in a world where demand for food is increasing, requiring an estimated £80 billion of annual investments, creates a large and growing opportunity for new entrants in the world of Agricultural Finance. The next Fintech Revolution will focus on areas such as farm payment methods with the digital wallet, pricing data and commodities trading with the use of digital tools, managing climate risk through insurance and e-commerce platforms for trading.
Agriculture is not necessarily perceived to be glamorous – but the above highlights it is exciting and consequential to our existence.
We hope you enjoy the selection of articles in this edition, to provoke thought and in some circumstances action around the topical issues and opportunities that 2023 has to offer.
Mark Seager FCCA
Director
Mark previously worked alongside one of our directors, Dan Knight and our Senior Tax Manager, Victoria Paley at a regional practice. Mark brings along a wealth of experience in both accountancy and rural life having grown up helping on his family farm with both the practical side and the VAT returns from an early age. His passion for agriculture, interest in business and desire to help others grew after he graduated from Harper Adams University.
Mark specialises in business strategy, structure and tax planning with agriculture.