Anyone looking at commodity price prospects might wonder what arable farmers have to worry about. But, while grain and oilseed prices may be at or near historic highs, the arable sector still faces a series of challenges, and making a decent return on capital could be far less certain than a recent wheat sale might suggest.
Price volatility, CAP reform, commodity and input price volatility, poor food chain returns, as well as the wider economic outlook, are all areas that can have a big effect on a farm business’s bottom line, but over which farmers have little control, says Allan Wilkinson, head of agriculture at HSBC Bank.
“Planning for these events is anything but simple, which is why we have chosen to hold this Trading Thoughts debate at Cereals – to air producers’ concerns and debate them with a panel of experts and the audience.”
The idea is part of a wider HSBC initiative, in which the bank has held a series of debates around the country
to spark ideas to help business build its way out of recession. “However, Trading Thoughts at Cereals is the only one of 10 aimed at a specific business sector, which shows how important HSBC regards agriculture – it remains the preferred sector,” Mr Wilkinson says.
Key business leaders, journalists, economists and entrepreneurs have all been invited to join in to address the challenges UK business faces, including:
• What are the growth opportunities for business?
• How can businesses maintain an edge in an increasingly competitive global economy?
• What are the barriers facing businesses looking to export?
Topics addressed in questions submitted by farmers and the wider industry will be put to a panel of experts, before being opened up for wider discussion among the audience. It will be very similar to the Question Time-style of event held last year, which packed HSBC’s marquee to standing room only.
“Over the past two to three years agriculture has not experienced the type of downturn that the wider UK economy has – it has performed reasonably well,” says Mr Wilkinson.
“However, price volatility has become a real issue, not just in terms of the amount of money farmers receive for their produce, but also on the effect it has on their ability to manage costs, particularly with inputs such as fertiliser, fuel, and agrochemicals.
“And now we have CAP reform being debated. The big question is not how the budget will be split in terms of direct or environmental payments and market support, but the size of that budget.
“Given the economic conditions under which individual member states are operating, it seems unlikely that UK farming will receive more than the current £3bn, and it’s possible it might get less.”
How agriculture tackles that and moves forwards is likely to be a key part of proceedings, he adds. “This debate will provide an excellent platform to discuss these important issues. I hope it will also help those participating to review their plans to ensure their business is in the best shape to face the challenges – and reap the rewards – that the next few years will bring.”
• Space in the HSBC marquee is limited, so if you are interested in attending please email email@example.comMore Cereals 2011 news.