Farmer Focus Arable: Be prepared for chaos, but fear it even more, admits Jim Alston
Chaos theory basically states you can have little idea of the outcome of complex systems because there are just too many variables.
Examples in agriculture include a bureaucrat in DEFRA sending a memo and the RPA re-doing the rural mapping system. Or a hedge fund manager in New York reading an article on the weather in Kazakhstan and the price of wheat going up or down. Tesco needing more profit from milk and a dairy farm going out of business.
Farming spends a good deal of time trying to mitigate the risk associated with this chaos. For example, using good kit to limit the weather effect, using the futures market to limit exposure to price downturns, forward purchasing to limit exposure to price changes and, more recently, fixing currency deals on the SFP.
So what am I doing to limit my exposure to the chaotic world of agriculture? We have reasonably good kit and employ contractors where we cannot afford good machinery. I have sold all the 2009 wheat crop on the futures market and half the 2010 crop. All the barley is on a fixed price contract as is the sugar beet and the potato crop has fixed price contract agreed. The fertiliser is purchased and Anglia Farmers will keep an eye on other requirements.
Theoretically I should feel all snug (smug?) and warm with such a high degree of risk avoidance but I do not. In the past chaos was the more normal state on this farm and we got used to it but now I have seemingly managed things more than ever to limit my risk, I fear the chaos more. It has been a long cold winter without enough to do and now it is wet. Perhaps sunshine will help… roll on spring.