Efficiency, not size, is the key to high performance

A warning to producers to focus on scale of efficiency rather than the overall scale of enterprise was given to farmers yesterday by a leading consultant.

Speaking at Scottish Agronomy’s annual conference, David Siddle, a director with farm consultants Andersons, said that many large-scale businesses had been reviewing the belief that scale was the key to cereal profitability.

And he said that following several seasons where rising rents for short term leases had been driving the need to crop every square metre with a “broad brush” input strategy using expensive machinery, many had now decided to break the cycle of escalating costs and diminishing returns.

“Focusing on cost-effective production with sustainable rotations, proportionate labour and machinery costs while giving up on cropping land which fail to meet the costs of production have gone a long way to improving profitability,” he said.

“This is especially the case when there are considerable costs associated with operating fields long distances away.”

Siddle, pictured, also pointed out that for many farm businesses – especially arable units – labour and

machinery were by far the biggest costs: “While most businesses keep a close eye on the costs of inputs such as fertiliser and fungicides, there often isn’t a huge amount they can do about these. But what usually marks out the better performers is their focus on and ability to handle the two crucial areas of labour and machinery efficiently.”

Siddle said focusing on detail while watching the bigger picture would be all the more important for the arable sector as it looked increasingly likely that support payments would be “pushed up the hill” once domestic farm policies kicked in: “With

few alternative options to livestock production on hill units, it looks inevitable that support paid to Region 1 quality arable land will move to the hills.”

He also said that although Nf us cot land’ s plan for targeting future support was “highly laudable”, it would require a “complete seachange” in thinking and in the mechanism of delivery: “And even if the authorities did appear willing to swing into action now, there would be some considerable amount of planning required before such a scheme could be implemented.”