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Planting the seeds of growth: key strategies for agriculture businesses

Our latest Future Fit research unveils the strategies leading businesses in the agriculture sector use to secure long-term competitive advantage.

Businesses that are fit for the future are excelling beyond their rivals. They thrive by achieving goals such as business growth, heightened innovation, and improved sustainability. Their strategic foresight and agility have allowed them to succeed amid uncertainty.

Here are some highlights from our Future Fit data, which show how organisations that effectively integrate sustainability into their operations and projects are better positioned to thrive in the evolving agriculture landscape.

By acting now to prioritise change, your business could be more ready to boost future resilience, meet market demand, reduce costs, or access capital.

Top tips for agriculture businesses

  • Baseline and improve: Start by assessing your current operations, then identify areas for quantifiable improvements. Often, productivity and efficiency gains align with emissions reductions.
  • Strengthen collaboration: Work closely with your supply chain to achieve sustainability gains and broader benefits.
  • Leverage agritech: Embrace data, explore new technologies and hire talent prepared to drive innovation.

Sustainability as a competitive edge

  • Identify opportunities to further reduce the size of the business’s carbon footprint to meet regulatory targets and score highly with suppliers and customers.
  • Analyse where sustainability investments will yield the greatest returns over the medium to long term.
  • Work with industry partners and the broader farming ecosystem to push for more consistent and clear policies from the government.

Farming businesses sit on the front line of many of the sustainability challenges that the world now faces. “Agriculture is responsible for carbon emissions, but it is also one of the few sectors that can deliver solutions,” says Roddy.

The sector’s leaders recognise the potential advantages that lie in seizing the initiative, rather than responding defensively to regulation and changes in government policy. More than half (62%) say they now regard investment in sustainability as a source of competitive edge and almost as many (61%) agree that sustainability and purpose will consistently demand the time and attention of leaders in their businesses.

The opportunities in this area are exciting. Nascent carbon markets, biodiversity markets and water quality markets, for example, offer the prospect of new income streams for famers. Many farming businesses will be able to diversify beyond the core business of food production.

The key will be to build a business case for investment sustainability – to identify areas where additional spending could generate new revenues rather than simply adding to the cost base. “There will also be opportunities for collaboration,” adds Ian. “Farmers with stronger sustainability credentials could secure more valuable contracts with both suppliers and customers.”

The common perception of what a farmer looks like is out of date – this is a highly skilled profession that spans multiple disciplines and makes use of increasingly sophisticated technology.

Roddy McLean
Director of Agriculture

Drive productivity and profitability with innovation

  • Utilise data: Make better use of existing data to inform decision-making.
  • Engage with peers: Spend time with other farmers, advisers, and industry bodies to understand emerging technologies.
  • Prioritise high-return innovations: Focus on innovations that deliver the greatest returns, tailored to your business profile.

Leading agriculture businesses recognise the power of technology to boost their businesses. Already, 61% of the businesses surveyed use data analytics tools to inform their decision-making and almost two-thirds say they would not make a significant investment in the business without first seeing empirical evidence of the likely benefit.

Still, the pace of technological advance in farming is rapid, requiring businesses to make tough choices about which tools and innovations to prioritise. Modern tractors have become sophisticated data collection and analysis engines, providing real-time read-outs of their environment on cab screens.

Automated picking machines reduce the need for manual labour. Satellite and lidar imaging offer the ability to identify parcels of land where yields are disappointing. Artificial intelligence tools chart exposure to adverse weather or the next flooding event.

With so much on offer, agriculture businesses – particularly larger organisations – may need to invest more in the process of transformation.

Collaborate for mutual benefit

  • Enhance collaboration: Build on current sustainability collaborations to share costs and rewards.
  • Value chain partnerships: Look for mutually beneficial partnerships up and down the value chain
  • Prioritise resilience: Focus on resilience, not just speed and cost, when working with suppliers (63% of agriculture businesses already prioritise this attribute from suppliers).

“There are still a good number of farmers who don’t have meaningful relationships with their value chains – they take the best price on the day,” says Roddy “We need to see more examples of working closer, because there is the potential to share risk, cost and reward to everyone’s benefit.”

This applies to customers and suppliers alike. Roddy points to one food producer that has recently introduced a range of financial incentives for potato growers prepared to work in partnership with it – new partners, including agricultural machinery suppliers, are interested in joining the collaboration.

Compete for talent

  • Map skills needs: Identify and plan for the skills your business will need in the medium to longer term and then set out a plan to prevent shortages.
  • Offer flexibility: Consider workplace flexibility, even if remote and hybrid working is impractical.
  • Promote a modern vision: Work as an industry to dispel outdated perceptions and showcase the dynamic nature of agricultural careers.

Future Fit agriculture businesses recognise they are in a fierce battle for talent – both with one another and with other industries. Despite this, only a minority of businesses actively address future skills shortages. For example, just 13% map their long-term skills needs and work with partners to resolve them.

This is a sector that will struggle to compete on the basis of remuneration alone. Many businesses prioritise other recruitment and retention strategies. For example, 46% point to the importance of a focus on health and wellbeing.

In other areas, the nature of agricultural work makes things more challenging – offering remote and hybrid working is a priority for just 2% of businesses. The sector may need to think about offering greater flexibility to broaden the talent pool – could staff leave work to pick up children from school and return later in the day, for example?

More broadly, Roddy believes farming needs to articulate a stronger vision of itself. “The sector doesn’t always tell its story well enough, particularly to the next generation. The common perception of what a farmer looks like is out of date – this is a highly skilled profession that spans multiple disciplines and makes use of increasingly sophisticated technology.”

Addressing those misconceptions with the potential workers of the future – through schools, colleges, and other forums, for example – will be crucial. 

Leading with intent

Our research paints a picture of a sector with significant challenges and frustrations – but importantly an improving outlook for agricultural businesses prepared to emulate the attitudes and behaviours of the most Future Fit organisations.

That will require strong, accountable leadership, Roddy says. “Leaders need to be honest with themselves about where the business stands and how it can improve.”

Ian adds: “If you don’t know where to start on making those improvements, don’t be afraid to hire people who can help, even for a short period.”

By acting now to prioritise change, your business could be more ready to boost future resilience, meet market demand, reduce costs, or access capital. Find out about the ways we could support you here:

Agriculture

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This material is published by NatWest Group plc (“NatWest Group”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by NatWest Group and NatWest Group makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of NatWest Group, as of this date and are subject to change without notice. Copyright © NatWest Group. All rights reserved.

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