Today’s successful farmers know that it takes much more than agricultural expertise to grow a profitable business.
With fears that the UK agriculture sector would be among the first to feel the effects of Brexit, one of Teesside’s largest accountancy firms is reassuring North-East farmers that there are opportunities out there and that it pays to plan ahead.
According to Baines Jewitt chartered accountants, there has been a significant increase from the farming community in seeking professional financial, tax and business advice, as well as help in exploring potential new income streams.
Baines Jewitt director Trevor Cook explains: “We work with a broad base of clients from the agricultural sector, including farms and agricultural contractors. In particular, we help many family-run farms to make the most of their finances.”
A prime example is Greystones Farm in Seamer, near Stokesley. Greystones has been in the Bainbridge family for almost 80 years, since Walter Bainbridge first bought the arable farm in 1942.
And although Walter is sadly no longer alive, his legacy at Greystones lives on.
As with many local businesses, Greystones has been passed down through several generations of the same family. Today the farm is run by Walter’s sons Les and David, along with his grandsons James and Jonathan.
Each new cohort brings their own priorities and ideas about how to take the business forward. This in turn creates renewed enthusiasm and fresh challenges. As a third generation farmer, James is one of a “new cohort” of farmers.
On top of dealing with the issues of the current global pandemic, James and his family have been working closely with Baines Jewitt to unravel what lies beyond Brexit for the business, as well as the implications for the agriculture sector as a whole.
Trevor explains: “I have worked with the Bainbridge family for over 30 years and the connection with our firm can be traced back further still. As well as helping with accounts, providing tax advice and advising on legal documents, we act as a sounding board for new ideas and investments, as and when required.”
Luckily, the Bainbridge family are used to embracing change and moving with the times to drive their business forward. As well as 250 acres at Greystones, they farm 1,500 acres through renting and agricultural contracting. Arable cropping accounts for 60 per cent of their income, with beef cattle, poultry, free range egg production, livestock and most recently sheep making up the remaining 40 per cent.
“As a professional accountancy, tax and business services firm, we have seen Greystones Farm enjoy rapid growth over the last 10 years or so,” explains Trevor. “Alongside their arable operation, which includes wheat, barley, oilseed rape and beans, they have increased the amount of share farming and contracting work, as well as diversifying into new areas such as free range egg production and most recently rental of storage units.”
As the former county chair of the National Farmers Union (NFU), James now sits on the combinable crops board within the NFU. He is therefore well placed to grasp the new challenges affecting the agricultural industry, such as the outcome of leaving the European Union.
“There is still some ambiguity about how UK farming will be affected by post-Brexit policy,” explains James. “We know that the government has been working closely with the agricultural sector to address issues and secure good terms for the future of UK farming, but there are still details to be finalised.
“For example, there are intentions for a Green Brexit. This is likely to include replacing all EU environment laws, setting up a UK environment watchdog, having a target for net-zero carbon emissions, supporting healthy farming and fishing and guarding against an abundance of foreign food imports, which could be of a much lower standard than our own,” he adds.
On top of this, there are changes to the EU subsidy provision, in which farmers received grants based on the amount of land they farm. Under the new Environmental Land System, farmers will be rewarded for managing land and enhancing rural life, such as delivering improvements to soil quality, preventing flooding, helping wildlife and planting woods.
“Unfortunately, changes to the value of the pound and fluctuating land prices could mean that some small farms will struggle to maintain tenancies or survive in their own right,” explains Trevor.
As a voice of British farming, a third generation farmer and having worked closely with Baines Jewitt for a number of years, James and his family understand that planning ahead and diversification is often necessary to boost productivity and generate income.
“We are always willing to diversify, as long as it makes good business sense,” he says. “We also recognise that as well as changes based on the political environment, we face other issues too.
One of our biggest challenges is working with the weather each year to try to harvest the crops before any rain. We also have to deal with commodity price variations.
“Our aim is to continue to grow the business, but it has to be in the right direction. Our future goals for the farm are to work smarter not harder.
“As always, Baines Jewitt’s professional support and knowledge of the farming industry will help us understand what we want to achieve by acting as a sounding board and providing up-to-date financial information to guide us in the right direction.”
As a member of the UK200Group, the UK’s leading association of independent chartered accountants and law firms, Baines Jewitt has approved specialist status across a number of key sectors, including agriculture.
“All of our farming clients need efficient financial control and want to make their businesses profitable,” continues Trevor. “However, we recognise that for those working in the agricultural sector, it is a very time-consuming business which requires a lot of dedication and hands-on activity. This can sometimes detract from the business side of things.
“We aim to relieve that pressure, by providing the right support at the right time. This includes taking care of everything from accounts preparation, maximising tax relief and cash flow projections to planning for development land sales, inheritance tax strategies and cost-effective finance for machinery.
“In a potentially volatile market, the agriculture sector must not leave anything to chance. It is essential that farmers plan ahead to cope with uncertainties. Having a good business plan in place, as well as sound financial strategies, will play a big part in future success.
“Although each of our agricultural clients is unique, like James and the Bainbridge family, most have one thing in common – they want efficient financial control and need to make their businesses profitable.”