The second in a series of agricultural surveys conducted by West Sussex-based chartered accountants and tax advisers, Carpenter Box LLP, in conjunction with MHA, the UK-wide group of accountancy and business advisory firms, reveals that the majority of farmers in the south are optimistic about future growth and are planning for expansion where possible. Succession planning, however, is highlighted as a major concern for many.
The Agriculture Insight Survey takes into account the views of more than 200 farmers nationwide and key findings include:
- Despite falling prices, optimism for growth is high – 69% of those who responded were expecting growth.
- Expansion is an aspiration for many with 51% planning to increase their acreage.
- Succession planning is a concern which is moving up the agenda for many respondents.
EU predictions earlier this month, that the European cereal harvest is set to beat the average for the second year running, may be part of the reason for the optimism amongst those surveyed, outweighing the impact of recent drops in commodity prices. However, many of the farmers in the south, in line with other regions across the UK, sounded a note of caution around profitability as the squeeze on margins continues to bite. There is also a shortage of available land for those looking to expand their businesses.
Alison Aggleton, Agricultural Tax Adviser at Carpenter Box, (pictured) commented: “It is encouraging that there is an underlying optimism as we go into harvest. For those looking for expansion however, the availability of the right land at the right price remains a barrier to expansion as land prices in the south continue to rise while supply remains static.”
Aside from the concern about available land, planning for the future of the business is a worry for many. 17% of those surveyed at Cereals 2014 felt that succession planning was a “great concern” and an additional 39% acknowledged that this was of “some concern”.
Aggleton continued: “It is good that farmers in our region are thinking about succession and I would encourage them to start the long term process of change early rather than be forced into decisions as a result of illness or death. It is important to recognise the difference between business succession planning and estate succession planning as one can easily undo the other. The key considerations are to maintain business growth and secure family relationships.”
Of those surveyed by MHA, 54% would consult their accountant as a first port of call when making decisions about their business. Sound financial advice is essential – whether you are planning to expand or looking to hand over the reins to the next generation.