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Conservation Agriculture Considerations

Increases in fixed costs and concerns over soil health have led many businesses to consider Conservation Agriculture (CA) as an alternative approach to crop production. The three principle aims of CA are to improve soil health and biology by reducing soil disturbance, using balanced crop rotations and aiming for as much soil cover as possible by utilising cover crops.

  1. Low disturbance direct drilling is seen by many as the panacea for reducing soil disturbance. It has been noted by some that soils can take several years to improve under a CA system and that some shallow cultivation and subsoiling can be required during this ‘conversion’ period. Therefore, during this period labour, fuel and wearing metal costs could decrease, but depreciation may increase or not fall as fast as expected if a wider array of machinery is still being retained and a new drill purchased.
  2. Diverse crop rotation is another pillar of CA, with a mixture of species and drilling date important for reducing weed pressures, pest pressures and improving soil fertility. It is however important to consider the wider implications of rotational choices on the total gross margin derived from crops, as a move away from crops with usually strong gross margins such as winter wheat to those with weaker, more variable gross margins such as spring cereals can reduces the total gross margin substantially. It is also important to consider the practical effects of rotation on machine capacity, workload and crop storage.
  3. Growing cover crops to ensure soil cover between harvested crops also has an important role in CA. The cost of cover crop seed can be high, but some producers are finding simple home-saved cover crop seed mixes can perform just as well as more expensive, purchased mixtures.

Conservation Agriculture could provide growers with the opportunity to improve net margins, however it is clear that in order to achieve these benefits, attention to detail and the careful management of fixed costs and gross margins is required. The decision of whether to adopt CA is therefore bespoke to each business and should not be viewed as the only answer to high fixed costs or poor soil health and weed burdens.

Wilson Wraight have a track record of providing bespoke services to help client’s budget for, monitor and understand fundamental business changes. Please contact one of our team to find out more.

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Diversification: Is storage an option?

Possible future reductions in subsidy payments and pressures on farm net margins are making it increasingly important for farm businesses to diversify their income streams. One diversification option available to businesses who have redundant buildings or yard space is the provision of self-service storage. In-between 2016 and 2017 the use of self-storage sites increased by almost 9%, indicating the demand from small businesses and home-owners for this type of service. The use of containers on farm for storage is a simple solution with built in flexibility that offers relatively quick ‘pay back’ periods.

 

It is always important however to consider the downsides to offering storage on farm. The higher the number of small storage units on farm, the more business transactions will take place and the more monitoring will be needed, incurring the need for extra administration time. The movement of people onto farm can itself have its own drawbacks. The separation of the public from farm traffic is important from a health and safety point of view, whilst on farms with livestock biosecurity may also be an issue.

 

It is always crucial to seek further advice prior to embarking on a diversification project, with particular regard to planning, taxation and legal issues.

 

Wilson Wraight have a track record of assisting clients with a variety of on farm diversification projects, get in touch with one of our team today to find out how we can assist you.