28 November 2000
‘More management, less muck’
By FWi staff
FARMERS have been advised to follow the lead of big business and adopt mission statements so that they have a clear direction for the future.
Gloucestershire-based dairy farmer Andy Guy said he believed that agriculture needed to reflect good practice from other industries.
There was becoming a need for much more management and much less muck in farming, he told listeners at a seminar at the Royal Smithfield Show.
Farming need not be a gamble if producers construct accurate business plans and have ambition, ability, and deliver the goods, he claimed.
Robert Mercer, who farms 2000ha (5000 acres), said farmers should fully assess their assets and then work out ways of exploiting them to the full.
But it is vital to budget accurately by allocating fixed costs between every enterprise, he said.
Budgeting may seem a hassle but it is worthwhile. “If you do that it gives you the opportunity to benchmark against industry standards,” he said.
Mr Mercer said he also believed that it is important to employ risk-management techniques take out some of the uncertainty in the industry.
These could include insurance, forward buying and using commodity markets to secure the best price for farm produce, he said.
Alternatively, it might be worth negotiating long contracts with buyers who guarantee that they will pay more than the cost of production for food.
This would take out some of the volatility in the market but farmers would have to be prepared to take less when the market was high, warned Mr Mercer.