Dozens of farms across North Yorkshire could fail if they don't change 'flawed and failing business model', says author of county's Rural Commission

Dozens of farms across rural North Yorkshire risk going out of business if action isn't taken to change their "flawed and failing" business model, according to one of the authors of the county's landmark Rural Commission report.

In a challenge to agricultural leaders and government policy-makers, Chris Clark argues that too many farmers are "allowing their business to be driven by farming, rather than the business driving the farm".

With many farms surviving only because of government subsidies, the long-awaited review into the future of rural Yorkshire says "working with nature, rather than substituting for it, will deliver the most profitable farms in conjunction with the most sustainable nature."

Sign up to our daily newsletter

The i newsletter cut through the noise

Read More

Read More
The business model farmers have been using for decades doesn't work, says North ...
In a challenge to agricultural leaders and government policy-makers, Chris Clark argues that too many farmers are "allowing their business to be driven by farming, rather than the business driving the farm". Adobe stock pic

It calls on North Yorkshire County Council and the Yorkshire Agricultural Society to set up a new 'farm business task force' to direct the culture change needed for the future of the vital sector.

And it says central government must provide free business coaching and mentoring support to help farm businesses survive and restructure, whilst ensuring support to help farmers exit the industry with dignity.

Mr Clark, who owned and managed nearly 400 acres of land at Nethergill Farm at Oughtershaw, near Skipton, is a partner of Nethergill Associates, a business management consultancy involved in farm management.

He said that 15 per cent of farm businesses do not cover their 'variable costs' such as feed, fertiliser and bought-in forage without the grants they get through the Government's Basic Payment Scheme.

He told The Yorkshire Post: "What that means is when you don't cover your variable costs, any business whether it's farming or ball-bearings or whatever it is, is losing cash because as you try and expand the output, you're not covering the additional costs occurring because of the additional outputs.

"You have to cover your variable costs, and 15 per cent of those farms are not doing that. Unless we can explain to those farm businesses that they need to start covering their variable costs, then there are 15 per cent of very vulnerable farms in North Yorkshire.

"There are 1,000 farms now in the Yorkshire Dales alone, you take 15 per cent of those and you've got 150 farms gone."

He said the majority of farms would not be able to cover fixed costs such as labour and rent without government support and that this "is allowing farms to be managed and run in the way that they are now".

He said: "And part of the part of the Commission's role is not only to help farmers move forward with a new business model, but it's to explain to the Department of Environment, Farming and Rural Affairs, the Yorkshire Agricultural Society, [North Yorkshire] county council that the existing business model is flawed and failing, and that they need to examine the other one that has been put forward by the Commission."

The commission's report says farming is vital to the Yorkshire and Humber’s economy, with the total income, including support, from agriculture increasing by 26 per cent between 2015 and 2019 to £452m.

The current value of direct payments to farmers in North Yorkshire is about £170m each year, although 80 per cent of upland farming businesses struggle to be viable.

Mr Clark added: "Our hope is that very, very few farms fail over the next 10 to 15 years, because we need those farmers in place.

"There are several reasons, one is that they intuitively, viscerally, understand their farm, the land that they live and work on, and nobody else will understand in the same way that they do.

"We need these farms to produce food, we need these farms to manage the landscape which we like to go and visit. If they are not there, there will be farm aggregation, farms will get bigger. And the smaller farms will be lost, the smaller family farms might well be lost and that's what we're trying to avoid."

Charles Mills, the Yorkshire Agricultural Society's Show Director for the Great Yorkshire Show, said: “The rural economy is huge and we would absolutely want to work with the authorities to support farming businesses so that they can develop, diversify and thrive.

“At the Yorkshire Agricultural Society we invest our profits into our year-round charitable work which supports farming families across Yorkshire. Much of this support is delivered through our forward-thinking farming networks which provide valuable opportunities for farmers to engage with new ideas and access training. We are constantly reviewing how we support the farming community and help them succeed.”

A Defra spokesperson said: “Our landmark plans for a renewed agricultural sector will transform the way we support farmers to reward them properly for the work that they do.

“To help farmers with the transition, we have set up the Future Farming Resilience Fund, which farmers and land managers can use to access the support, information and tools required to plan with confidence.

“Furthermore, we are contributing towards the establishment of a new professional body for the farming sector – The Institute for Agriculture and Horticulture – a hub for the professional development of farmers and land managers in England to promote skills development in the sector.”

'Realising untapped potential of countryside could be worth billions'

Realising the untapped potential of Yorkshire's countryside and other rural areas could help grow the economy by billions of pounds each year, says the director of a leading lobbying organisation.

The Country Land and Business Association (CLA) says leaders in rural Yorkshire now have a greater understanding of the region's priorities such as skills, digital connectivity and planning.

Its Rural Powerhouse campaign launched to coincide with the 2019 General Election was based on the idea that more supportive policies were needed to fulfil the "incredible potential" of the countryside to create jobs and build successful communities.

CLA Director North Dorothy Fairburn said: “Yorkshire’s countryside is more than just a ‘pretty face’ of landscapes and market towns, but contributes hugely to the wider regional economy that is worth an estimated £110bn per year.

"However, nationally, it is 16 percent less productive than its urban counterpart. Realising this untapped potential could grow the rural economy by billions of pounds each year.”

Ms Fairburn said rural businesses cover everything from farming to tourism, housing to energy production and often have to be agile and explore opportunities across different sectors. But she said: "This entrepreneurialism, though, can be hampered by a lack of investment, government support and excessive red tape.”

“A simplified planning system can play a key role as it is currently complex, lengthy and costly. This could be a relatively cheap way of boosting economic development in rural areas and help the post Covid recovery, especially since rural office locations may become more attractive in future.

“Local planning authorities may want to explore opportunities in market towns for residential and particularly affordable housing. It is essential to encourage younger people to stay in rural areas, along with a stimulus to create jobs. This is where market towns play a critical role as an employment and services hub, not only for residents, but for the surrounding countryside.

“In addition, what this pandemic highlighted is the importance of digital connectivity in the countryside, and bringing it up to the same level as in urban areas. That is why the CLA supports the government’s announcement of an accelerated rollout of fibre broadband and mobile connectivity. If the countryside is digitally connected, it can be far more attractive to investors and young people alike.”

Jane Colthup, Chief Executive of Community First Yorkshire, said the Rural Commission's themes and messages "make a strong case for ensuring levelling-up funds protect and improve the ability of people to live and work in remote and rural communities to ensure their thriving and sustainability".

She said her charity, which works with voluntary and community organisations, social enterprises and rural communities across North, South and West Yorkshire, was "familiar with the challenges and issues the report highlights".

She said: "As well as the wider issues of environment, economy and farming, we particularly welcome the suggestions for more affordable housing and improved digital connectivity. Addressing housing and digital connectivity will enable more young people to stay in their communities to live and work.

"The challenges of providing public transport in rural areas are highlighted and, like the Commission, we ask for devolved investment in new transport models to ensure people can access health services, employment, education, training, shopping and social activities."