Is 2022 make or break for the farming sector?
As we get close to the New Year, I really think 2022 is unfortunately going to be a real ‘make or break’ year for many businesses within the farming sector.
I don’t necessarily mean they will go bust in 2022, though that is certainly going to be a risk for some, but as the challenges continue to mount, those businesses not being proactive on how they will adapt are really going to be putting themselves in a difficult position.
Farming has always been tough (despite what the media might portray), but with BPS disappearing, the increased threat of imports, lack of labour supply, a lack of government support, and the need to push for sustainability, the financial pressures faced by many businesses are rapidly increasing.
Now, I am not a farmer, but I have worked with enough businesses to know that you either need to be of a large enough size that your economies of scale enable you to make a profit, or your business has to diversify to survive.
That’s the harsh reality the farming sector is facing.
Despite this, there are opportunities. I am seeing some really forward thinking land agents, carbon and sustainability specialists, and other advisors being really proactive and offering real opportunities to make a difference to people’s businesses.
Yes it costs money, but it is an investment. Without that investment, without diversifying, without change, many rural businesses will not survive the next 5-10 years.
The government may not care, but myself and thousands of others involved in the sector can appreciate the threat this poses to food security, to land use, to sustainability, and just to the many business owners who love doing what they do, but are facing real issues.
I would encourage all rural business owners to consider what their plans are for the next 12-24 months and beyond.
Will your business survive without BPS?
Will it survive without significant investment in new machinery?
Will it survive without a sufficient labour supply?
Will your soil provide the yields required to break-even?
Will demand for your products be affected by cheaper imports?
These are all questions to consider. If the answer to any is ‘no’, or ‘I’m not sure’, my advice is be proactive. Speak to an advisor, speak to a specialist. There is help out there.