Two levy payers have BIG business ideas

Thursday, 14 January 2021

Business Improvement Groups are a great way for farmers to get together and support each other to help improve their businesses' profitability, with the use of Farmbench to implement change being a topic of discussion in a recent AHDB podcast.

With the current changes and challenges facing agriculture, it is a particularly busy time for AHDB’s Farm Economics team which looks after Farmbench, an online benchmarking tool which allows you to compare your farm to similar businesses and identify where you can improve efficiency and increase profits. The team are currently delivering feedback meetings to their Business Improvement Groups (BIGs) to look at the 2020 production year, with looking back key to making progress and moving forwards.

Through BIGs, farmers and growers can compare agreed performance indicators with local or national farmers. The groups can also help them make evidence-based decisions to improve individual profitability and productivity and, therefore, better understand their business to help make future plans.

In light of these ongoing feedback meetings, knowledge exchange managers Tabitha Allen and Julie Clark spoke to two long-standing BIG members and Farmbench users, David Fuller-Shapcott and John Billington, in a recent podcast. Both David and John have each benefitted from changes on farm, both financially and in terms of their rotations, as a result of the insight provided by Farmbench.

Cost-saving impact

With the theme of change in mind, David described how he had benefitted financially as a result of using the benchmarking tool: “The principle and most obvious change that I’ve made is that when using Farmbench I’ve split first and second wheats.

“My good performance out of first wheats was masking very low performance out of second wheats and, when separating them out, I was struggling to make them pay one year. The second year, the same problem occurred, and I have now stopped growing second wheats.

“I’ve changed the rotation, and I only grow first wheats; I’m definitely better off financially. That was a very clear-cut change with very clear indications out of Farmbench.”

Similarly, John described that Farmbench had helped him to reduce the depreciation costs on his farm: “One of the first things that I learnt from our benchmarking journey was that our depreciation costs were a lot higher than a lot of other peoples.

“As a result of that, I took it upon myself to get those costs down to a reasonable figure. In the five years I have benchmarked, I think I have halved my depreciation figure.”

Comparison and competition

In addition to the opportunity to make financial improvements, there are many other benefits of being part of a business group. In particular, John highlighted the comparison aspect as one of the key reasons he is involved with his local BIG: “With benchmarking, it’s comparing production costs across different sizes of farms.
“We’ve got like-minded farmers in the group, we have a meeting once a year to look at the figures, and there’s nothing held back. We ask questions and some of the questions are relevant to how we can make more profit but then some things that have got higher costs can actually be an individual’s choice.
“You’ve got to have trust in your co-ordinator and the group members and we don’t spread anything outside of those meetings. What goes on in that meeting you use for yourself, and I have certainly used quite a lot of things, it’s given me confidence in what I’m doing.”
Meanwhile, for David, key benefits of the group are the healthy competitiveness and the opportunity to share and discuss problems: “There is an element of competitiveness within us which is attractive; it’s good, it’s healthy.

“There’s also an element of a problem shared is a problem halved too, so I think there’s quite a good support basis that comes out of it for issues and problems. I think there’s significant value in being part of the group from that aspect as well.”

Industry resilience

Although there are undoubtedly many challenges ahead for agriculture in the near future, what is clear is that the industry is incredibly resilient and able to adapt to change.

To hear more about the changes made by both David and John in their businesses, as well as activity in their BIGs, listen to our 'Ringing in the change: evidence-based decisions' podcast on the AHDB podcast channel.

Our website also has more information about our Farmbench tool and contact details for our regional benchmarking Knowledge Exchange Managers.