Speaking at the firm's farming seminar for 140 industry figures on Friday 5th, Simon Brown, head of the firm's farm sales division, said:
There is a golden opportunity for farmers to make their greatest asset their land - work better for them.
This is not about diversification in the traditional sense or a criticism of farmers. It's about seizing the commercial opportunities that are undoubtedly there but many farmers have not thought of mainly because they are too busy doing the day job or have only considered the possibilities which exist within their own farm boundaries.
A great number of farmers could generate another income stream without having to undertake and operate another activity. In an era where there is most likely to be less subsidy and more impact from volatile global prices, utilising land to maximum effect will be increasingly important.
For example, how many farmers stop and question whether part of their land would generate more income if it was used to plant trees rather than running commercial hill ewes, that in turn would be eligible for a grant? Or how many consider whether they have minerals or have a site that could generate cash if it were designated development land in the local development plan?
Mr Brown also said that at a time of historically low interest rates there is potential for farmers to generate more income from borrowing:
There is every chance that farmers with significant equity in their property can borrow at around 3% or less. The cash could then be invested in commercial ventures that could yield 8% return on investment, and that could transform the income of a farm business.
Even the renewable energy sector, which is not as attractive as it once was, can still offer good returns through combined heat and power plants, biomass and battery units for electricity storage. There are myriad opportunities to invest in existing schemes and consented schemes where the potential benefits are excellent. Another avenue is to invest in commercial property in order to broaden the income base of the business thus spreading the risk and helping to iron out the peaks and troughs which are so common in agriculture around the globe
Many farmers who have inherited farms quite understandably view their property within the same parameters as the previous generation and work flat out to make the best of what they see. We are now in a situation where having the vision to look beyond these boundaries can make all the difference to farming businesses.
CKD Galbraith held their Agriconference on Friday 7th November at Murrayfield. The company would like to thank everyone that attend the event, with a special thank you to both the CKD Galbraith and guest speakers for their contributions.