ploughing your own furrow

G e o r g e B r o w n A p r i l 2 0 1 2

Unearthing the blueprint for new entrants striving to establish their own farm business in the UK.

PLOUGHING YOUR OWN FURROW:

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ACKNOWLEDGEMENTS

I am grateful to a number of individuals who have been incredibly patient in answering my

many and varied questions. While the views presented here do not necessarily reflect their

own, they have been invaluable in shaping arguments in this study. They include:

• Ruth Layton of FAI Farms,

• Mike Gooding of FAI Farms, Chairman of the Oxford Farming Conference Council 2012

• Charles Baines of Laurence Gould

• Alison Rickett, National Fresh Start Coordinator

• Richard Gooding of BQP

• Martin Law of Hardcastle Burton

• Jim Baird, Nuffield Scholar 2011

• George Dunn, Chief Executive of the TFA

• Oliver Hardwood, Chief Surveyor at the CLA

• Rupert Clark, Partner and Head of Rural Estate Management at Smiths Gore

• Ian Pigott, Nuffield Scholar 2002 and Founder of Open Farm Sunday

• Sarah Palmer, NFYFC Agriculture and Rural Affairs Officer

I am also extremely grateful to the farmers who agreed to be case studies in this project. They

provided me with a fantastic array of information and are some of the most inspirational

people I have ever met. They are listed in the appendices at the end of this study.

Finally I would like to thank my college for their support in funding some of the travel

expenses incurred in undertaking this research, and Mary Young, my long suffering

dissertation supervisor, for all of her help in developing this report.

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CONTENTS

Introduction

Literature Review

Methodology

Data Presentation

The Blueprint – Land

The Blueprint – Capital

The Blueprint – Output

The Blueprint – Labour

Conclusion

Endnote

Bibliography

Appendices

4

5

11

12

15

24

29

34

38

42

43

49

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INTRODUCTION

Concern over the number of young people pursuing careers in agriculture has recently

received much attention in the farming press. A number of factors have been highlighted as

contributing towards the aging agricultural workforce, but to date the literature available has

offered little in the way of practical guidance for new entrants striving to establish their own

farm business. Two quotations succinctly contextualise this issue, and consequently clarify the

aim of this dissertation.

“Encouraging the next generation to be motivated about starting their own business is vital to building a stronger future for British farming. We need young people with ideas, ambition, commercial acumen, skills and drive, if the challenge of producing more food and impacting on the environment less is to be realised.” (King, 2011) “This winter [2011/2012], CAP reform aside, I have heard more presentations on ‘new entrants’ than anything else. The subject is hugely important, but I have been disappointed by the array of papers I have heard. None have offered any substance beyond rhetoric and utopian wishes.” (Pigott, 2011)

This paper seeks to look beyond the “rhetoric and utopian wishes” and uncover the practical

means by which new entrants to agriculture to establish a thriving farm business?

Definitions

The terms ‘new entrant’ and ‘young farmer’ shall be used interchangeably throughout this

analysis. Art. 8 Council Regulation Ec 1257/1999 defines a young farmer as someone under 40

years of age, possessing adequate occupational skills, setting up as the established head on an

economically viable1 agricultural holding for the first time. While this definition is not without

fault2, it nonetheless serves as an adequate guideline in defining the type of person described

as being a ‘new entrant’ in this paper. Nevertheless, more simply, how can ambitious young

1 ‘Economically viable’ is defined as fulfuling one of the thresholds given in Regulation (EC) No 1166/2008 ANNEX II, namely that the holding consists of more than 5 hectares of agricultural land, one hectare of orchards, 0.5 hectares of vegetables or 0.1 hectares of protected crops, or more than 10 cows, 50 pigs, 20 sheep, 20 goats, or 1,000 poultry. The same criteria are also used by DEFRA (2010) to define the minimum threshold deemed to be ‘commercial’. 2 For example, a ‘new entrant’ may not be establishing themselves as the head of the holding straight away, or may have already gained a delicate foothold in the industry but still face a number of obstacles that are the same as those faced by someone deemed to be a ‘new entrant’ (TFF, 2008),

“There are three recognised routes to farm ownership: patrimony, matrimony and parsimony.” (Shadbolt and Martin, 2005, p270)

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people with little prospect of acquiring a farming enterprise through patrimony or matrimony,

assist themselves in developing a farm business?

A health warning

While it will be demonstrated that a number of factors currently make it difficult for new

entrants to establish a farm business, it is not the intention of this paper to criticise current

policy or campaign for reform. Instead the aim is to analyse solutions to the barriers to entry

as they currently exist. To many these metaphorical hurdles seem insurmountable, and it is

therefore hoped this dissertation will examine some of the ways in which successful new

entrants have, and can, overcome them.

This analysis will not seek to unearth a single ‘best’ solution; farming is an incredibly diverse

industry therefore a one-‐size-‐fits-‐all answer is unlikely to exist. That said, there are a number

of common issues facing new entrants, thus it is not unreasonable to suggest that there may

also be a number of common solutions.

LITERATURE REVIEW

Agriculture’s labour force

In England, 52% of farmers are aged over 55, compared to just 22% of the self-‐employed urban

workforce (ADAS, 2004). Nationally, the median age of farm holders3 varies from 55 to 60

years across all farm types (DEFRA, 2011), and almost half of National Trust tenant famers are

past retirement age or within 10 years of it (The National Trust, 2008).

The problem extends beyond just the age of farm holders. In the UK a quarter of the sector’s

workforce is 55 or older4 (LANTRA, 2011a). Across Europe this figure is higher still, with 47%

of agricultural workers in the EU-‐15 being 55 years or older (DGARD, 2010), and while there

has been a decrease in the total number of farmers by 9% from 2000-‐2007, the number of

farmers under the age of 35 has fallen by 42% in this same period (DGARD, 2010). 3 The ‘holder’ being defined as the person in whose name the holding is operated (DEFRA, 2011) 4 Compared to a UK average of 17%

“[T]he first rule of first generation farming is you don’t whinge – it’s up to you and no one else.” (Blanche, 2011, p11)

“[T]he industry is facing a recruitment and succession crisis with the average age of farmers in the UK at 58 and rising.” (The National Trust, 2001, p2)

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British further and higher education institutions have been producing just 50-‐70% of the

recruits that UK employers need5 (Spedding, 2009), and the National Employer Skills Survey

2009 revealed that 8% of UK agricultural industry employers had a vacancy at the time

(LANTRA, 2011b).

Farming is ‘crying out’ for new entrants (Tasker, 2011). Forecasts suggest that the UK

agricultural industry will need approximately 60,000 new entrants coming into the sector

between 2010 and 2020 (LANTRA, 2009; Spedding, 2009; LANTRA, 2011a), and it is apparent

that even if overall employment in agriculture does continue to decline6, there will still be a

significant demand to replace those who are exiting from the sector (Spedding, 2009).

The significance of an aging agricultural workforce

Dwindling entry of such magnitude normally characterises an industry in decline (Gale, 1993),

however as agriculture and food are strategic sectors impacting significantly upon rural

communities and the British economy (ADAS, 2004; Williams, 2006; Price’s Trust, 2008; CEJA,

2011), this degeneration cannot be allowed to occur unchecked. Farming needs to attract

progressive and entrepreneurial individuals with outstanding business management skills,

who embrace change and steer the political agenda (Spedding, 2006, 2009).

Studies have identified age as a barrier to the introduction of more effective and efficient

management practices (Foskey, 2005 cited in Owen, 2009) and it is noted that the innovative,

entrepreneurial and risk taking abilities of new entrants are beneficial to the industry

(Shadbolt and Martin, 2005; Owen, 2009). Younger farmers have been shown to be better

trained than their older counterparts7 (DGARD, 2010), and new entrants are also considered

more adaptable and more focussed on longer-‐term success (Williams, 2006). Farmers below

35 years old also show 40% more economic potential than their superiors (DGARD, 2010). 5 Although is should be noted that enrollment on agriculture and related courses has recently increased, and in fact saw the greatest percentage increase across undergraduate courses between 2009/10 and 1010/11 (HESA, 2012) 6 Which would seem likely given that it is a near-‐universal feature that the percentage of the population involved in agriculture declines with a nation’s increasing economic development (ADAS, 2004) 7 “The share of farmers with full agricultural training decreases with increasing age of the farmer” (DGARD, 2010 p.21)

“The key to developing an agricultural industry we can be truly proud of in a worldwide context is innovation. They key to innovation is new ideas and individuals willing to develop these ideas with dynamism. Innovation is a dish best served by the desperate and the different, those with little to lose but a massive need to succeed.” (Blanche, 2011, p7)

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Moreover, Lobley et al. (2002) categorised farmers into 3 groups: those who ‘embrace’ change

(31% of respondents), those who change in response to new pressures and opportunities

(‘reactors/adaptors’, 51%) and those who ‘resist’ change (18%). While every age group could

be found in each category, ‘embracers’ were generally shown to be better educated8,

“somewhat younger” and on bigger farms9. This goes some way towards explaining why,

despite the fall in number of young farmers across the EU-‐12, there has been an increase in the

area farmed by them, implying that those few who have stayed in business have increased the

size of their holdings (DGARD, 2010) and that it is they who are therefore achieving the

economies of scale required to keep many farm businesses viable. Lobley et al., (2002) also

found that ‘static’ businesses were far less likely to be operated by young farmers10, suggesting

that an ambitious young workforce could strengthen a dynamic agricultural industry.

Thus, the main reason that the aging agricultural workforce is an area of policy concern is the

association of young farmers with increased efficiency, adaptability and ultimately

competitiveness (ADAS, 2004). “Young people matter for farming; we need their vitality and

new ideas to help meet the challenges of increasing food production and climate change”

(Princes Trust, 2008, p.2).

Of course there remains a place for the older generation in farming; their wealth of skills and

experience is undoubtedly beneficial. Nevertheless, there is a strong body of evidence

suggesting that it would be advantageous for the average age of the industry to be reduced.

After all, what looks like a daunting future to a 60-‐year-‐old farmer may represent a golden

opportunity to a driven 30-‐year-‐old (Chamberlain, 2006; Spedding 2006).

Factors discouraging entry to agriculture

A number of negative stereotypes discourage prospective new entrants from considering

careers in farming. There is a perception that agricultural employment involves working long

8 71% of embracers had some post-‐school education or training, and 44% were educated to diploma or degree level (compared to 11% of ‘resistors’) (Lobley et al., 2002) 9 Embracers represented 31% of the respondents, but were responsible for 45% of the area surveyed (Lobley et al., 2002) 10 Only 18% of operators of static businesses were aged under 45, while 73% of static businesses had been in the hands of their current operator for 20 years or more (Lobley, et al., 2002).

“Most people imagine farmers to be dull, conventional, conservative and Conservative.” (Naylor, 2011)

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hours11 for low wages (Padwick, 2010; IGD, 2008 cited in DEFRA, 2010), and that it is a low

skilled industry12 (Curry, et al., 2002; Kyle, 2006), needing to become more professional

(Spedding, 2006). The result is that potential new entrants don’t believe farming offers them a

future (The National Trust, 2008), and there is strong consensus that the industry is struggling

with an out-‐dated image (Spedding, 2009).

Nonetheless, although beneficial in understanding the context, combating the stereotypes

surrounding agricultural employment is an entire issue in itself, beyond the scope of this

evaluation. Of greater relevance to this study are the practical problems facing prospective

farmers that have served to discourage entry into the industry and therefore encourage an

aging workforce. There are two key problems in this area: the poor availability of land and the

high start up costs of establishing a farm business (Williams, 2006; Ilbery, 2009; DGARD, 2010;

Blanche, 2011), the two issues being closely linked.

UK farmland supply in relation to new entrants

Older farmers in the industry who don’t want to retire restrict the ‘room’ available for new

entrants (Owen and Cowap, 2009). Retirement from farming is often a progressive, drawn-‐out

affair, different from the dramatic change in lifestyle often experienced, for example, by blue-‐

collar workers (ADAS, 2004). Indeed, Errington (2002) identified a “succession ladder” within

farm businesses, where retirement of the older party is protracted over 5 stages13.

11 ONS statistics show the average working week in the agriculture and fishing sector is 46.4 hours, (compared to a national average of 31.7 hours per week in the period April-‐Jun 2011) and rises to 50.8 hours when only the hours worked by men (who, after all, account for 77% of the workforce in agriculture (LANTRA, 2011b)) are considered (ONS, 2011b). The average number of hours worked by employees in agriculture climbs further still when farm workers specifically are calculated, rising to 52 hours per week. On top of this, during peak times the average number of hours in a farm worker’s week escalates to 80 hours, with 23% of them working 100+ hours in their peak week (Padwick, 2010) 12 In spite of the considerable skill level within the industry, only 20% of the workforce are qualified to level 4 and above, and 24% have no qualifications. This is compared with 36% and 7% respectively across all sectors in the UK. (Higher Education Statistics Agency cited in LANTRA, 2011b) 13 First technical and tactical decisions are shared, such as day to day planning and organisation of work. Secondly the successor becomes involved in strategic planning of the business and in long term decision making. Then employment and staff management decisions are shared, before fourthly the successor becomes directly involved in financial matters such as negotiating sales and loans. The fifth and final stage in completing succession of the farm

“Without doubt, access to land remains the single greatest structural obstacle facing the new generations of farmers and growers.” (Payne, 2012)

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Personal reasons that discourage the retirement of older partners from farms include their

enjoyment of farming, a desire to maintain control, general inertia, their ability to work to a

greater age and emotional ties to the business (ADAS, 2004; Baird, 2011; Hanson, 2011).

Financial issues such as being unable to afford to retire, an inadequate pension, subsidies

cushioning risk (Mishra and El-‐Osta, 2008,) and inheritance tax advantages are seen to further

delay retirement, as do practical problems such as the lack of a successor14 (Williams, 2006;

Ilbery, et al., 2009). Thus, for many reasons farmers may avoid retirement, restricting the

supply of land for new entrants.

Combined with this is the difficulty new entrants face in obtaining tenancies from traditional

sources. While the National Trust owns 245,000 hectares of countryside15 (The National Trust,

2001), turnover of Trust farms is slow16 (The National Trust, 2008). County Council

Smallholdings (county farms) are also hard to come by, with the number having fallen by

72.5% from 1964-‐2007 (Ilbery, et al., 2009) as holdings were sold off or amalgamated to create

bigger units17 (Gemmill, 2005; Ilbery, et al., 2009; LANTRA, 2009; TFA, 2010; RICS, 2011a). The

options open to new entrants to acquire land through these two traditional routes are

therefore negligible.

Simultaneously, land values have been climbing. It is generally accepted that farmland prices

are high in relation to their potential productive agricultural return (ADAS, 2004; Gemmill,

2005; Shadbolt and Martin, 2005), and they reached record highs in the first half of 201118

fuelled by increasing demand from commercial buyers (RICS, 2011b). Referred to as being like

“gold with a cash flow” (Farming Today, 2012), land remains a prime asset class in turbulent

markets (RICS, 2011b) and commercial buyers continue to invest in order to increase output

and capitalise upon strong commodity prices. Residential demand also remains firm, with the business occurs when the successor is finally given control of the purse strings, and control of the cheque book is relinquished (Errington, 2002). 14 Due to children from farming families electing other career paths, there being no other family members wanting to take up the reigns, or the business being unable to sustain the involvement of another partner (Williams, 2006). 15 60% of which is let out as whole farms to 700 tenants (The National Trust, 2001) 16 Only ten to fifteen National Trust farms become available to let each year (The National Trust 2008) 17 Currently the national estate stands at less than 125,000 hectares, with Cambrigeshire Country Council owning more than 10% of this; holding an estate of 13,500 hectares (Cambridgeshire County Council, 2011a). However even in Cambridgeshire, just 3 new tenants were taken onto County Council farms during 2011, illustrating how few holdings are available (Cambridgeshire County Council, 2011b). 18 At £7,479 per acre for land which includes a residential component, and a hypothetical £6,115 per acre for pure bare land values (RICS, 2011b)

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‘lifestyle value’ of land being high (Ingram and Kirwan, 2011) particularly in areas close to

large conurbations. Thus it is apparent that the demand for farmland from commercial and

lifestyle buyers contributes to higher land values that price many young farmers out of the

market.

A remaining option for new entrants is to rent land under Farm Business Tenancies19 (FBTs).

Created to reduce tenant immobility and thus encourage the letting of agricultural land (ADAS,

2004), FBTs theoretically offer new entrants the opportunity to farm. However, in helping

young farmers the effects of the ATA 1995 have been ‘disappointing’ (Whitehead, et al., 2002;

TRIG, 2003). When FBTs do become available, demand for land from neighbouring farmers is

often high as they anticipate being able to increase output without much increase in fixed costs

(ADAS, 2004) thus meaning they can outbid new entrants. The result is that new entrants “feel

barred to a great extent from taking up such opportunities because of the high rents and stiff

competition from established farmers for the FBTs available”(Whitehead, et al., 2002, p60).

Furthermore, the short duration of many FBTs20 (Ingram and Kirwan, 2011; Walker, 2011)

prevents tenants from planning for the long term.

Capital costs of farm business establishment

There are large capital costs associated with building many farm businesses, and it is generally

the excessive fixed costs rather than high variable costs that are problematic for new entrants

(Shadbolt and Martin, 2005). For example, to purchase 11721 freshly calved dairy cows at July

2011 prices22, would cost £151,398 and that is before any of the infrastructure necessary for

their management has been purchased. Put in perspective, this figure is almost 7 times the

average annual salary of a farm worker (Padwick, 2010), reinforcing how large this capital

threshold is likely to seem to prospective young farmers seeking to develop their own farming

enterprise.

Additionally, new entrants suffer from diseconomies of scale in establishing their businesses,

meaning that their capital costs are comparatively higher than those of larger producers

19 Introduced by the Agricultural Tenancies Act 1995 (ATA 1995) 20 The average length of FBTs is now consistently under four years (TFA, 2010; RICS, 2011a) 21 The UK average dairy herd size in the 2010 June Census was 117 cows (DairyCo, 2011) 22 The average price of freshly calved dairy cows in July 2011 was £1,294/head (AHDB, 2011)

‘For the group of former students not brought up on a farm but who had intended to enter farming, lack of capital was the main constraint” (ADAS, 2004)

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(ADAS, 2004; Shadbolt and Martin, 2005). The capital costs in starting a farm business are

therefore a significant ‘barrier to entry’ faced by new entrants.

Agricultural subsidisation

Currently the Common Agricultural Policy (CAP) presents new entrants with a number of

problems, not least that subsidies are capitalised in land and asset values, increasing the cost of

farm business establishment and expansion (Baird, 2011). In recognition of the difficulties

faced by new entrants, it is expected that the forthcoming CAP reforms will offer more support

for young farmers, most likely under Pillar 2. However, while any such measures will be

beneficial, the current playing field is so far from being level that any changes to the

subsidisation scheme are unlikely to make it easy for new entrants. Thus, the ultimate success

of any new entrant will still depend more on the “skills, vision, determination and budgetary

controls” of the young farmer than the particular subsidy on offer (Gemmill, 2005, p4).

This being the case, what are the options for new entrants looking to overcome these barriers

and establish their own farm business?

METHODOLOGY

The ‘transdisciplinary’ nature of farming23 makes case-‐study based analysis essential in

understanding farm business decision making (Shadbolt and Martin, 2005), and solutions to

the practical difficulties that face young farmers today are best identified through analysing the

means by which previous new entrants have overcome similar hurdles. A number of

exceptional individuals have managed to develop farm businesses, and so it is hoped that

through interviewing these new entrants and understanding the variables that have

contributed towards their success, a number of common factors have been identified that could

be replicated by future young farmers looking to emulate their achievements.

23 Describing how successful farm management draws upon many different disciplines to resolve a variety of problems (Shadbolt and Martin, 2005)

“I have never been comfortable with agricultural subsidies… They diminish the impetus to innovate, they protect inefficiency and therefore reduce business fluidity.” (Baird, 2011, p8)

“The problems that are studied are real ones to farmers, and so must be studied in the context of a real world situation. Therefore, the case-‐study approach cannot easily be divorced from the study of farm management.” (Shadbolt and Martin, 2005, p11)

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Such exceptional individuals are often highlighted in the farming press so some have been

identified by this means. However, further case studies were sourced through contacting

prominent individuals within the industry and seeking recommendations from them, in the

process also drawing on their own expertise in relation to this topic.

It remains the proximal aim of this study to ‘unearth a blueprint’ for young farmers seeking to

develop their own farm businesses. While in reality it may not be possible to establish a single

‘best’ template for prospective new entrants, to attempt to base such a blueprint of the

experiences of suboptimal businesses would seem somewhat futile. Accordingly this study

remains focused on an exceptional minority of successful young farmers in the hope that

identifiable common factors can be replicated by a wider majority of new entrants.

Biophysical, financial and human resources are all employed in a farm business (Shadbolt and

Martin, 2005) and conventional economic terminology suggests these can be classified as land,

capital and labour. This analysis therefore evaluates the options available to new entrants

looking to resolve issues relating to land and capital before discussing the output options best

suited to young farmers and addressing how human factors influence the success of new

entrants to agriculture.

There is currently a dearth of literature on this topic. It is relatively easy to find information on

the problems faced by new entrants and the need for young farmers; it is even relatively easy

to find examples of new entrants who are establishing their own farm business. However,

there is a shortage of literature that coherently breaks down the issues and offers supported

solutions (Pigott, 2011), and as such it is hoped that this study does just that.

Data Presentation

Having undertaken the semi-‐structured interviews and compiled a range of case studies, it has

been necessary to categorise and retrofit the data into workable groups. Primarily for

analytical reasons, the data has been collated into tables. The process has enabled quantitative

comparisons of the case studies, with repeatable trends being identified. Unfortunately the

process resulted in the loss of certain nuances of the data, and so where appropriate they will

be highlighted in the latter sections of this study. That said, the more direct analysis enabled

by the grouping of the case studies in this way, offsets the regrettable loss of some of the data

specifics.

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For a number of case studies being involved in a joint venture was fundamental in shaping

their business, making this a logical initial distinction with which to group the data. Four case

studies fell into this category (Group 2), and common variables within this grouping have been

identified. Although there were a number of other new entrants whose businesses contained

aspects of ‘jointness’, they have remained in Group 1 as it has been held that being involved in a

joint venture was not as fundamental in contributing towards their successful business

development.

Those enterprises left in Group 1 have been sub-‐divided into 2 further groups. Almost all the

businesses in Group 1 had an initial part time labour requirement but it could be seen that a

number of the enterprises required a lower time commitment, had a lower capital threshold,

were generally less intensive in their land use and were less predisposed to offering a

consistent cash flow. These businesses have been summarised in Group 1(b), while the others

have remained in Group 1(a).

One significant anomaly is apparent amongst the case studies. While characteristics of

Charlotte and Ben Hollins’ farm business are comparable with case studies within Group 1(a)24,

it would mask anomalous features of their accomplishments to include them. However,

aspects of their success are undoubtedly replicable by other new entrants and so will be

mentioned where appropriate in latter sections. Nevertheless, in being anomalous in relation

to the groupings in this study, they ultimately serve to reinforce that there is no single best

means by which young farmers can develop their own farm enterprise.

The grouped data is presented overleaf.

24 For example, they have followed CSA principles, have utilised rare breeds and direct marketing, and have developed customer relations while employing extensive media coverage

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Group Group 1(a) Group 1(b)

Core Enterprise Dairy, Pigs, Poultry or Vegetable -‐ higher output/better cash flow

4/5 sheep

First Generation? 5/6 first generation 3/5 first generation

Formal Agricultural Qualification

5/6 formal agricultural qualification

4/5 formal agricultural qualification

Relevant skills develop-‐ment prior to enterprise

establishment

Generally had practical track record

Generally had practical track record

Land

Stakeholder

Relations Sourcing Land 4/6 prior contacts to

secure land 4/5 prior contacts to secure land

Landlord Size All smaller part of landlords larger portfolio/ estate

Mixed, often with land spread across a number of areas.

Principles of

land use

Under-‐Utilised Land

5/6 made partial or full use of previously underutilised land

Mixed. Predominantly made use of small grazing blocks

Initial Land Area

Required

Small -‐ 5/6 on 10 acres or less

2/5 under 10 acres, 2/5 10-‐30 acres.

Tenure Rented, many short term with little security of tenure

Rented, many short term with little security of tenure

Capital

Sources of Start-‐up Finance

Varied, but some personal finance is key. CSA's and private investors appear to be good options

Varied, but some personal finance is key. Private investors appear to be a good option, plus bank loans if needed

Principles of Finance

Applicable to New Entrants Initial

Enterprise Size

4/6 commenced with an enterprise that was below the threshold deemed to be 'commercial'

2/5 commenced with an enterprise that was below the threshold deemed to be 'commercial'

Investment Priorities

Investment reflects tenure security (greater security enabled investment in assets that were 'more fixed' in nature)

Investment reflects tenure security and relatively low capital threshold required to enter the sheep industry

Cost Control Second hand equipment, DIY, low capital production

Fairly low cost production systems

Output

Product

Cash Flow Relatively consistent cash flow (for farming anyway)

Relatively seasonal cash flow

Secondary Employment

5/6 initially had secondary employment

5/5 initially had secondary employment

Rare Breeds 4/6 made part or full use of rare breeds

2/5 made part or full use of rare breeds

Marketing

Direct Marketing

5/6 utilised direct marketing

3/5 utilised direct marketing

Customer Relations

5/6 heavily engaged with developing consumer relations

2/5 heavily engaged with developing consumer relations

Media Coverage

4/6 used/benefited from national media coverage

2/5 used/benefited from national media coverage

Niche 6/6 in Niches 2/5 (although other 3 producer's businesses contained niche elements)

Group Group 2 (JV’s)

Core

Enterprise 3/4 dairy

First Generation?

2/4/

Formal Agricultural Qualification

All possessed formal agricultural qualification

Practical experience

All developed significant practical experience, and all had worked abroad

Development of JV relations

All utilised networking contacts -‐ this is very important.

Capital provision

Personal capital is essential – the young farmer "needs to bring something to the party"

Business Structure

Mixed -‐ contract farming agreements are favourable, and partnerships to help develop farming business provide opportunities to leverage debt against other people’s capital

Business Development

Enables economies of scale to be reached much more quickly (these 4 are definitely in the biggest 5 enterprises in this study)

Key Messages Network, find a good system, be knowledgeable, accumulate capital and a proven track record, be good at negotiating and have exceptional communicative ability. Also be excellent at enthusing others, and telling them how great your business idea is. Personal characteristics (labour) are very significant in determining the success of a joint venture.

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THE BLUEPRINT -‐ LAND

Agricultural production is inherently linked to land management. Even if large tracts of land

are not required in order to establish an agricultural enterprise, some ‘space’ is still necessary.

Yet acquiring land is a significant barrier to entry for new entrants (Payne, 2012). Accordingly,

this section will discuss possible solutions to some of these challenges.

Principles of Land Use Applicable to New Entrants

1) Making use of unwanted land

In order to establish a new farm enterprise, young farmers may initially need to make use of

land that is currently under-‐employed by existing industry operators. The majority of the

Group 1(a) new entrants made use of under-‐utilised plots25 and 80% of Group 1(b) new

entrants grew or are growing their enterprises on relatively small parcels of often widely

distributed land26.

Even the most efficient farms are likely to have a corner that is under-‐utilised; these are the

areas on which new entrants can grow their businesses, finding more profitable uses for

otherwise unexploited land parcels. Landowners invariably embrace the additional revenue

presented by utilizing vacant plots, and established operators in a given sector will welcome

the opportunity to diversify income streams. There are opportunities for environmentally

sensitive farming in woodland27 and many traditional farm buildings are incompatible with

modern agricultural machinery so consequently sit unused28.

While it may seem counter intuitive to suggest that a new entrant who is already at a

disadvantage because of their small size and lack of capital, attempt to establish a business on a

sub-‐optimal plot of land, it must be remembered that there is likely to be little alternative.

Furthermore, the proposed enterprise needn’t be based on this plot forever; initially the aim is

25 Ranging from unmanaged areas of woodland to unused farm buildings 26 For example, one new entrant is taking on additional grazing 60 miles from his base, and another estimates that in the last 5 years he has spent 1100 hours driving to and from his sheep, in the process covering a distance equivalent to twice the circumference of the globe! 27 Pigs and poultry are obvious examples, but there is also scope for silvopasture enterprises 28 Shifting economic pressures and agricultural practices have resulted in many traditional farm buildings loosing their origincal purpose (HELM, 2011)

“New entrants are using marginal land that no-‐one else wants to farm.” (Amiss, 2011, p7)

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simply to get the business off the ground29. Once the business model has been shown to work,

inevitably more opportune plots of land will become available, and with a proven track record

landlords will be more likely to consider allowing the enterprise to expand onto their property.

2) Intensity of land use

With land being expensive and difficult for new entrants to source, production from the area

obtained should be maximised in order to minimise costs. Traditional economic theory

suggests that capital increases returns from land and labour, so the difficulty is in establishing

a system that produces maximal returns without incurring significant capital costs.

The particular farming operation will dictate the way in which production is intensified; a

number of the Group 1(a) new entrants demonstrated however, that increased output could be

obtained from a relatively small plot through running a variety of different enterprises30.

Alternatively management-‐intensive grazing techniques are potentially well suited to new

entrants31 and have been successfully employed by all 3 dairy operations in Group 2, and also

used to varying extents by a number of Group 1 new entrants. A common criticism of

management-‐intensive production methods is the labour requirement involved in their

implementation; the high cost of land however, means that such techniques can most likely be

justified in order to minimise land related costs.

3) How much land is really required?

A number of enterprises included in this study challenge perceptions on the amount of land

required to start a farm business. Over 60% of Group 1 new entrants began their enterprises

on 10 acres or less, and fewer than 20% started with more than 30 acres. Some of the

29 This may require something of a culture shift in the UK, where it has been commonly expected that farmers cultivate the same plot of land for much of their lives. However, in New Zealand, it is frequently seen, particularly in the dairy industry, that a farmer may have worked on and had varying degrees of investment in multiple farms businesses throughout their lifetime (Shadbolt and Martin, 2005) 30 By way of example, one case study reared ducks for meat and eggs, geese for christmas, had a flock of 70 sheep, a herd of 20 cows, some pigs, and ran a poultry processing facility, all on 57 acres. 31 New entrant dairy farmers in Wisconsin were shown to be far more likely to employ management intensive grazing techniques than their established counterparts (Buttel, et al., 1999; Barham, et al., 2001)

“[I]t is not the acreage you farm, but the intensity of production you maintain, which determines the financial success of the venture.” (Henderson, 1943, p41)

“‘[H]ow many acres?’ or ‘how many cows?’ is largely irrelevant as a measure of success.” (Amiss, 2011, p14)

17

enterprises were and continue to be dependent upon externally purchased inputs, but this in

itself helps develop links with the local farming community. Besides, it is unlikely that it will

initially be cost-‐effective to produce the limited inputs that are required for a fledgling

business as fixed costs are spread across a relatively small output. The initial land area will be

unlikely to provide full time employment for the new entrant, but once the micro-‐business has

proven itself to be profitable, expansion opportunities are more likely to become available.

Tenure Options Applicable to New Entrants

Nonetheless, the need for some land remains, meaning tenure options suited to young farmers

must be considered.

Farm ownership is a long-‐term aim held by many new entrants32, and as an aspiration it is

adequate; it implies a long-‐term commitment to farming, and the significant equity growth

required in order to fund land acquisition is an understandable commercial aim. However,

while land appreciation has been a valuable source of asset growth in previous years, it should

be remembered that “[l]and ownership has absolutely nothing to do with successful farming”

(Salatin, 1998, p46) and that for a new entrant, sinking limited capital into land ownership

represents a questionable investment from the point of view of establishing a farm enterprise.

While the security of tenure benefits that accompany freehold possession should not be

underestimated, greater returns are available when limited capital is employed elsewhere.

Thus it is consistent with this theoretical angle that none of the new entrants in this study

initially developed farm businesses on land that they owned themselves.

1) Short-‐term licenses

Seasonal grazing licenses and grass keep agreements offer young farmers a foothold in

establishing a farming enterprise. While they provide no real security, their inherent flexibility

is advantageous to a small enterprise growing and developing rapidly as it makes it relatively

easy for new opportunities to be taken should they arise. Furthermore, while businesses are

small and investment stakes are relatively low, if need be non-‐fixed assets can be liquidated

should the supply of land discontinue, with the business being recommenced when additional

land becomes available.

32 LANTRA (2009) suggests that 57% of survey respondents aspired to be farm owners in the next 15 years.

“Small areas of land, let seasonally, with no security are relatively easy to obtain.” (Blanche, 2011, p18)

18

Short-‐term licenses are therefore important in securing land for beginning enterprises, with

the hope of later progressing onto plots that offer greater security of tenure. While ex-‐ante

they may seem to be of little benefit, they provide a valuable first rung on the widely quoted

‘farming ladder’. The key point is that it is necessary to simultaneously restrict investment to

non-‐fixed assets that can be readily moved or liquidated33, reflecting the non-‐fixed nature of

the land tenure.

2) Tenancies

Although it was suggested previously that agricultural tenancies are difficult to secure, they are

available and should not be ruled out by new entrants. By ensuring capital is not tied up in

land ownership, tenancies offer increased business liquidity while providing greater security

than short-‐term licenses. A number of premises have recently been targeted specifically at

new entrants, and county council holdings do, occasionally, become available. However, they

are very competitive.

For new entrants to successfully compete with existing producers who have significant

economies of scale when applying for tenancies, new entrants must set themselves apart from

the crowd of applicants. This begins to sound somewhat like the ‘utopian rhetoric’ that it was

hoped would be avoided, but there cannot be a single way to stand out from the crowd; by

definition it involves being different. Whether this is through media publicity, innovative ideas,

irrefutable operational excellence or any other multitude of distinguishing factors need not

matter, but the common theme is clear; through setting themselves apart from the competition,

young farmers can increase their likelihood of securing a tenancy34.

3) Joint ventures -‐ opportunities

Joint ventures could equally be discussed in relation to securing capital, as in many cases a

party may provide land and a number of capital assets to a new entrant with which they are 33 Such as stock, electric fences and portable water bowsers; this explaining why short term licences were demonstrated to be popular with sheep and pig producers in this study 34 By way of examples, one case study who had been struggling to secure a tenancy proceeded to estabish their own micro-‐business on small seasonal lets in order to develop a prooven track record and business plan that was supported by practical evidence, something which their competition lacked. Another case study that successfully secured a tenancy was able to set herself apart through her sheepdog trialling success and growing media attention.

“[T]he increase in unconventional tenures which include partnerships, share farming and contract farming (collectively called joint ventures) would appear to offer new opportunities for those wishing to enter or leave farming.” (Ingram and Kirwan, 2011, p917)

19

entering into a joint venture. However, it is common for the land-‐owning partner to finance

fixed assets that have long repayment periods, making them similar to land in their nature.

For the Group 2 case studies in this paper, the joint venture into which they entered was a core

part of their enterprise. Predominantly entailing contract-‐farming agreements, they also

included partnerships and machinery sharing arrangements. The enterprises of three case

studies within Group 1(a) also contained aspects of ‘jointness’, again including agreements that

ranged from machinery sharing to divisible surpluses35.

A multitude of benefits are commonly seen to accompany collaborative farming agreements.

For the new entrant, entering into a joint venture provides expansion opportunities from

landlords who are reluctant to lease their land, while also offering security of tenure benefits

arising from the landlord being given an interest in the businesses long-‐term success. They

provide a means of achieving significant equity growth36 and can offer opportunities for new

entrants to leverage debt against a second party’s capital. For the landowning party bringing a

fresh pair of eyes onto a premises with the enthusiasm to follow changes through can be

incredibly beneficial. Production efficiencies and economies of scale are more likely to be

achieved37 and joint ventures offer phased retirement possibilities for the landowner, allowing

retention of property assets that are appreciating in value38.

4) Joint ventures – practicalities

ADAS, (2007) lists 6 distinct types of joint venture farming, as well as a further ‘other’ category.

Gemmill (2005) and Ingram and Kirwan (2011) add to the list, suggesting joint venture limited

companies and simple partnerships based on a profit-‐share agreements be included, thus

illustrating the variety in the types of joint ventures available. However, while the form of the

joint venture may vary, the basic principles generally remain the same; one party provides

35 Nonetheless, they were still included within case study Group 1 as, although beneficial, the ‘joint’ aspect of their enterprise was not deemed to be as influential in determining their enterprise establishment. 36 For example, one case study’s personal equity growth under a partnership progressed from owning a 7% share of 80 cows in 2005 to a 50% share of 1600 cows today. 37 As both parties become strongly motivated to run the farming operation to its full potential and mutual knowledge and skills sharing between the parties offers production benefits 38 While also maximising financial benefits such as taxation advantages to the farm owner (DairyCo, 2009, p1)

“Obtaining the highest possible rent is never the only factor, nor is it advisable to be too rigid; flexibility and sensible compromise are often the hallmarks of a truly successful arrangement” (Nicholas Ford cited in LandShare, 2012, p10)

20

most of the capital requirements, while the other provides the variable inputs and

management in order to achieve the production goals (Gemmill, 2005).

For new entrants in the UK, the difficulty lies in encouraging landowners to engage in joint

ventures. An area of concern is that of risk and that the stories of partnerships that circulate

are of those that have gone wrong. That said, there are many instances where joint ventures

have been successful (as shown by the case studies in this paper) and it appears that they

present new entrants with opportunities to access land and grow a farm business. The

inherently human element involved in their success39 means the specifics of the agreement will

likely vary widely, but it is evidently essential that parties initially clarify their objectives; with

clear income and cost sharing agreements, and discussion of the issue of ‘control’. It is vital

that the parties are likeminded and in compatible (often distinct from comparable)

circumstances, are up front in stating their ultimate objectives, and are prepared to discuss all

aspects of the agreement in question. That said, the more complex the contract, the smaller the

likelihood that a joint venture agreement will be obtained40.

A prior association between the parties is often beneficial and was cited as being one of the

reasons why the matchmaking aspect of the Fresh Start initiative was unsuccessful (Ilbery, B.

et al., 2009). All of the case studies in this report that made use of joint ventures had already

developed a prior relationship with the second party. While this requirement for a previous

connection may seem to disadvantage new entrants, this study has demonstrated that it is

possible for prospective young farmers to develop relations with established operators and

reiterates the importance of personal as well as business characteristics in developing an

agricultural business.

5) Re-‐writing tenure agreements

The culmination of the considerable variation of arrangements under the guise of ‘joint

ventures’ is the opportunity to effectively re-‐write traditional tenure agreements. While

inadvisable without professional advice, there is considerable scope for new entrants to 39 With a successful joint venture inherently requring the close cooperation of multiple parties 40 With the relative simplicty of single enterprise dairying being recognised as one of the main reasons why uptake of partnerships and sharemilking agreements has been so great in the New Zealand dairy industry.

“The post-‐feudal stage in England and Wales (exemplified by the era following the 1995 Agricultural Tenancies Act and the introduction of Farm Business Tenancies – FBTs) is described as driven by a free market orthodoxy, with arrangements brought about through negotiation rather than being pre-‐determined under law” (Ingram and Kirwan, 2011, p919)

21

discuss alterative tenure options with landowners to fulfill both parties’ requirements. There

were examples in this study of new entrants to whom land was offered in partial lieu of wages,

as well as others who entered into mixed tenancy/joint venture arrangements.

Through understanding respective objectives parties can contract towards their preferred

aims, selecting particular strengths of different models and in effect creating a hybrid

management contract. Communication remains key; re-‐writing tenure agreements can be

beneficial, but the outcome must still be clear and comprehendible by both parties. That there

exists only a limited amount of guidance in this field needn’t discourage young farmers; as the

case studies in this paper demonstrate, unconventional tenure agreements can be invaluable in

helping new entrants’ businesses to grow.

Stakeholder Relations

A number of issues must be considered during negotiations with landlords, some of which are

discussed below.

1) Landlords and risk

Stereotypically, rural landlords are risk-‐averse; agricultural land is considered to be a stable

investment, making it unattractive to purchasers looking for large risk and returns. Land is

also frequently a family asset and the current owner will not want to be known as the

generation that lost, or degraded, the family’s “crown jewels”. Accordingly, new entrants will

need to appear to be a low risk option when approaching landlords, discussed in more detail

below41.

2) “Over the hedge” relations

Landlords are motivated by factors other than economic efficiency when deciding upon

management decisions. They care about the ‘health’ of their land and how it is used.

Accordingly they care about who is using it.

Aggregating case study Group 1 and 2, it can be seen that 80% of new entrants in this study

utilized pre-‐existing contacts and networks they had developed in order to secure additional

41 See p36

“Ultimately you can not make people get together, it is a personal decision.” (Ingram and Kirwan, 2011, p924)

“Landlords are frightened by anything they perceive as risk.” ( Amiss, 2011, p26)

22

land. News of good land management travels, and if a neighbour can see that the grass is

metaphorically and literally greener on the new entrant’s of the fence, then they are more

likely to be interested in getting the new entrant’s input into their own enterprise. An

additional advantage is that local gossip is likely to bring local contacts, and logistically it is

easier to manage a growing enterprise that is distributed across local sites.

A fleeting conversation ‘over the hedge’ can be unquestionably beneficial in bringing space for

a business to grow.

3) Size matters

If personal relations and networking play a significant part in new entrants securing land, then

it would seem that targeting smaller landlords where it is relatively easy to build relations with

the head of the property would be the most sensible approach for young farmers to take. On

smaller estates there is likely to be less management bureaucracy, making it easier to influence

landlord decision-‐making and bring desirable changes. A minority of case studies across both

groups illustrated this point.

However, to repeat, landowners are risk averse. Greater success is therefore likely through

engaging with a larger landowner who is able to offer a proportionately smaller area of their

land to a new entrant, thus reducing their personal risk. 10 of the 11 case studies in Group 1

suggested this was the case, each operating on land that constitutes a small proportion of a

larger estate, and often utilising parcels of land owned by different individuals, further

spreading landlord risk.

Separate studies have shown that larger farms are more likely to offer contract-‐farming

agreements, and that conventional and unconventional tenancies are concentrated on larger

farms (ADAS, 2007; FiBRE, 2008). While the exception is in relation to ‘gentleman’s

agreements’42, opportunities for new entrants to acquire land are more likely to become

available through larger landlords, and consequently young farmers should favour

approaching them. It may be more difficult to access decision-‐makers on such estates, but

larger landlords ultimately appear more likely to bear the proportionately smaller risks of

having a new entrant engage in activity on part of their land.

42 33.8% of which were shown to be on farms under 20 hectares (FiBRE, 2008)

23

Section Summary

1. Short-‐term licenses provide an invaluable first rung, but business liquidity should be

matched to security of tenure. If tenure security is low, then investment should be

prioritised in assets that can be readily moved or liquidated.

2. Land ownership is not necessary. Instead look to effectively increase security of tenure

through giving landlords an interest in the business.

3. Seek out land that existing operators are under-‐utilising. It is cheap to acquire and

finding a use for it will diversify landowner portfolios and provide a new income stream.

4. Start small. The ‘250-‐acre myth’ (Amiss, 2011) is not required to start a farm business.

Take advantage of small plots and maximise their productivity. Developing a track

record and demonstrating the business is both profitable and scalable will lead to larger

plots becoming available.

5. Talk to landowners. Listen to their requirements. Repeatedly those who were

interviewed suggested that they would be prepared to engage with a new entrant on

their land.

24

THE BLUEPRINT – CAPITAL

Every business, no matter how small, needs some start-‐up capital (Aubrey, 2007). For a

prospective new entrant with limited funds, obtaining the capital required to commence a

farming enterprise presents a number of problems. This section will discuss certain principles

that young farmers can employ in order to reduce the amount of capital that they require, as

well as possible sources of funding.

Principles of Finance Applicable to New Entrants

1) Great oaks and tiny acorns

One interviewee made clear that the first rung on the farming ladder is not the mythical

tenancy, but instead is the micro-‐business. Small, minimal-‐capital enterprises offer a low risk

training ground from which to build a larger farm enterprise.

Over half of the Group 1 new entrants in this study started with a business that was below the

threshold deemed to be ‘economically viable’43, while in contrast all of the Group 2 new

entrants commenced with an enterprise that was significantly above this threshold. The

common theme is therefore noticeable; if a new entrant is establishing a business without the

assistance of another party, it is often advisable to start small. It enables mistakes to be made

on a lesser scale, providing an incubation period in which to test ideas and establish formulae

that can be incorporated into a larger business. Initially a lack of funds may even be beneficial

in controlling risk taking and preventing premature expansion, but the business will eventually

require additional capital to fund growth.

2) Degree of debt financing

While increasing personal equity in the business makes it possible to leverage more debt

capital to finance expansion, the risk of failing on debt servicing repayments is higher if the

company is more heavily geared. The debt-‐to-‐equity ratio into which a young farmer enters

must therefore consider the type of enterprise undertaken.

43 ‘Economically viable’ is defined as fulfuling one of the thresholds given in Regulation (EC) No 1166/2008 ANNEX II

“There is a ‘farming ladder’ for all who can make use of it, but remember that it is a ladder and not an escalator; it must be climbed step by step and one must be prepared to take the full weight on each rung.” (Henderson, 1943, p6)

“Getting into too much debt early on was one of the biggest threats to the beginning farmers in this study.” (Barham, et al., 2001, pii)

25

Debt financing can be greater in a business with a higher turnover44, as illustrated by some of

the dairy enterprises in both Groups 1(a) and 2. In contrast, the relatively low-‐input

enterprises of Group 1(b) young farmers that produce comparably inconsistent income

streams require lower cost structures in order to maintain similar profitability.

3) Investment priorities

Savings from wages are indicative of prudent monetary management, but alone are unlikely to

be a source of sufficient capital accumulation45. Constrained by limited capital, it is essential to

invest in assets that appreciate, or at least hold their value. Currently breeding livestock

appear to retain much of their initial purchase price as culls, while offering potential for

income earning in between. Store animals increase in value as they grow, and salad crops are

worth significantly more than their seed. The dairy producers in Group 2 generally focussed

their investment on cow ownership in order to build equity46 and the majority of the Group

1(b) producers employ low cost production systems in order to prioritise investment in stock

which provide higher returns on capital.

Sources of Finance

In current markets, banks are reluctant to lend to borrowers where they consider there to be

significant risk and from the point of view of a bank, lending to a young professional with little

track record, who is looking to start a farm business following a period of substantial volatility

in farm input and output prices, represents a considerable risk. The perishable nature of many

farming outputs adds to this risk47, thus while it may be possible to obtain start up finance

44 Such as a dairy enterprise 45 To paraphrase Shadbolt and Martin (2005, p271), saving $10,000 per annum, and achieveing a consistent real investment return of 8% [in itself questionable] generates $456,000 of equity after 20 years. They also suggest that to purchase a full-‐time livestock farm [albeit in New Zealand] requires $1m to $1.5m of equity capital, providing an equity loan of 45-‐50% is available. All of a sudden, that $456,000 seems somewhat insufficient. 46 To the extent that one case study questioned the logic behind purchasing a tractor when it was possible to buy another 30 cows instead. 47 To paraphrase an interviewee, rather than producing an asset that can reside in a warehouse until the market recovers, “you instead have a pig that is getting over fat, costing money to feed and house, and all the while is diminishing in value”.

“Buy flesh not metal” (Blanche, 2011, p37)

“When capital was the chief constraint, people were incredibly resourceful in its sourcing and deployment. They were not preoccupied with asset ownership and in many cases developed business structures that either leveraged existing resources or employed other peoples’ capital.” (Baird, 2011, p24)

26

from a bank, the chance of doing so at an affordable interest rate is fairly slim, making it

necessary to explore alternative sources of finance.

1) Grants

Grants are available to young farmers from a range of different sources. A minority of the case

studies across Group 1 made use of start-‐up grants, ranging from funding to promote local food

initiatives, to others geared towards business start-‐up. However, although all the individuals

recognised that the grants had been useful in helping their businesses to grow, few suggested

that the grant funding had been a critical factor in furthering their enterprise, indicating that

such grant funding, although beneficial, in isolation is not sufficient to build a viable

agricultural enterprise and that alternative sources of financing are also required.

2) Private investment

Evidently a new entrant’s desire to succeed makes an enormous difference in determining the

success of a farming operation, and passion is perhaps best conveyed to private individuals

outside a corporate setting. It is difficult to build a relationship with a bank manager with

whom you are not yet a customer, while it is far easier to discuss a new farm business

proposition with a friend, family member or acquaintance. This imperfect informational

relationship between new entrants and corporate sources of finance is evidenced by the fact

that many of the individuals in this study initially financed aspects of their businesses through

private sources of investment, particularly in Group 2 where the capital threshold required to

engage in joint ventures was high. Private individuals appear predisposed to consider the

pivotal human factors that determine the success of a new farming operation, meaning that

young farmers are likely to be more fruitful in securing finance when pursuing private sources

of investment.

3) Community supported agriculture (CSA)

Developing the previous section on private investment, certain CSA initiatives effectively

replicate a corporate shareholder model; with investment from private individuals used to

finance an agricultural enterprise. A number of initiatives exist under the CSA banner,

including producer-‐led subscriptions, community-‐led co-‐operatives, producer-‐community

“If those with capital see there is a yield to be had and they trust you; if they see you as a money making machine, capital is obtainable. It relies on making contacts, proving yourself and selling yourself.” (Blanche, 2011, p40)

“CSA’s are an option for funding working capital and a guarantee of customer support.” (Amiss, 2011, p7)

27

partnerships and community-‐owned farms (Soil Association, 2011). A range of definitions of

CSAs are in circulation48, but from a new entrant’s perspective the key point is that of reducing

personal risk by encouraging community investment in a farming enterprise and strengthening

customer support.

The specifics of a young farmer’s CSA initiative may vary. For example, Charlotte and Ben

Hollins created England’s first community owned farm through establishing Fordhall

Community Land Initiative, and in doing so were able to provide themselves with an

opportunity to obtain a tenancy. Another case study utilised a producer led subscription

framework in establishing a vegetable box scheme and a further individual broadly made use

of CSA principles through the sale of ‘cow bonds’49; providing community investors with a

return and enabling the initial partnership to purchase required working capital. Essential to

success in all cases has been communication between the farmers and investors, however CSAs

offer ambitious and proactive young farmers with the capacity to engage with the community

an opportunity to access non-‐traditional sources of capital and develop customer loyalty.

4) “Only your imagination limits the capital you can get” (Macher, 1999, p21)

This again verges on the utopian rhetoric, but the above examples illustrate the varied means

by which it is possible to finance a farming operation. While a new entrant is unlikely to

succeed in loan applications if there are doubts over practical skills, financial management

abilities or their character (Shadbolt and Martin, 2005), to quote Baird (2011, p29) “if other

elements of a business case are compelling enough, capital, from whatever source should not

be a show stopper”.

48 Although the Soil Association (2011, p1) recently defined CSA as meaning “any food, fuel or fibre producing initiative where the community shares the risks and rewards of production, whether through ownership, investment, sharing the costs of production, or provision of labour”. 49 A ‘cow bond’ being a fixed term investment of 3 years with a 5% rate of return per year

28

Section Summary

1. Personal savings will be required. Personal investment reinforces commitment to the

business and the prudent financial management required to accumulate savings is

attractive to prospective investors.

2. Leverage the business in accordance with the enterprise profitability and cash flow.

Focus investment on assets that hold their value and are capable of generating a return.

3. Imperfect informational relationships in corporate settings mean private investors are

likely to be a more fruitful source of funding.

4. CSA initiatives offer young farmers with the capacity to engage with the community an

opportunity to access non-‐traditional sources of capital and develop customer loyalty.

29

THE BLUEPRINT – OUTPUT

The purpose of this discussion is not to find a single agricultural output that all new entrants

should focus on producing. The range of enterprises undertaken by new entrants in this study

is evidence of the fact that there is no ‘best’ product young farmers should market. That said,

there are a number of common features running though many of the case studies in this paper

in relation to the target market, the marketing strategy and the enterprise output, that are

worthy of further discussion.

The Market

1) Niches

Niche markets involve product differentiation, which increases heterogeneity, allows non-‐price

competition, and in turn enables businesses to make the supra-‐normal profits that facilitate

significant reinvestment and growth. Particularly important to Group 1 new entrants, over

70% of the farmers within this category exploited niche markets in order to develop their

initial enterprise, and the remaining businesses in this group generally contained subsidiary

niche elements. Through marketing niche products, young farmers are able to command

premium prices and insulate themselves from direct competition, protecting their fledgling

businesses and providing a secure environment in which to grow.

2) “Adapt, innovate, overcome” (Baird, 2011, p22)

While large producers have significant economies of scale, to reach this position they will have

invested heavily in a given form of production. Consequently they will find it comparatively

difficult to adjust business direction if market conditions change. In contrast, a small business

can relatively simply restructure in order to pursue new production goals, with this

representing a comparative advantage that must be utilised by young farmers. Here the

theoretical framework is best illustrated though brief mention of two specific case studies. One

began his farming enterprise producing organic veal from a suckler herd, but in light of

increased competition completely restructured his business and began producing sheep. The

other had already grown a pig enterprise when increased feed costs reduced business

profitability. He took a step back, re-‐evaluated his system and was able to implement changes

“The aging farm population is creating cavernous niches begging to be filled by creative visionaries who will go in dynamic new directions.” (Salatin, 1998, px)

“The hardest thing to change on a farm is the mindset of the farmer! Cows adapt! Pastures adapt! To flourish in turbulent times the farmer needs to be adaptable!” (Kuriger, cited in Williams, 2011, p27)

30

that increased pig productivity and brought him back into the black. Both individuals highlight

that successful new entrants must be able to evaluate their business objectively, reiterating

how the speculative model is supported by grass roots evidence in this study. The innovative

ability of young farmers is highlighted in existing literature as being one of their key

advantages (Shadbolt and Martin, 2005; Owen, 2009), and so is something that successful new

entrants must exploit.

The Marketing

Many of the Group 1 case studies in this paper engaged in direct marketing50. This trend was

most pronounced amongst the Group 1(a) young farmers, where 5 out of the 6 interviewees

engaged in direct marketing. Ceteris paribus, reducing distribution chains results in increased

producer profitability, in turn enabling increased reinvestment and business growth.

Furthermore, while ‘adding value’ is technically about the product rather than the marketing

strategy, it comes hand-‐in-‐hand with direct marketing; again offering increased gross income

and net profit, provided additional costs are controlled.

Successful direct marketing is intertwined with developing customer relations. Through

making use of social media and personal websites, new entrants are able to foster positive

customer relations, building brand loyalty while educating the public about farming best

practice. A selection of Group 1 case studies promote their respective brands through social

networking sites, while additional case studies engage with consumers at farmers markets and

on delivery rounds. Increased consumer loyalty reduces sensitivity to price changes and

ultimately allows producers to be in position where, as one new entrant explained, customers

“not only buy the produce, but also a bit of your life”. For many new entrants, the success of

their farm business was not just down to the fact that they were technically efficient producers;

often activities beyond the farm gate were of equal importance in helping their businesses

flourish.

In light of the importance of direct marketing and proactively developing customer relations, it

is unsurprising that many new entrants in this study successfully utilised media coverage.

Particularly significant for Group 1 young farmers, more than half of the new entrants in this

group have made use of national media publicity. Perhaps most significantly, Charlotte and

50 be it through on farm sales, delivery services, farmers markets or farm shops, often utilising more than one of the above

“Traditional agriculture, as they say, is the only business in the world that buys retail, sells wholesale, and pays the freight both ways.” (Macher, 1999, p219)

31

Ben Hollins managed to raise much of the £800,000 required to secure Fordhall Farm through

their extensive media campaign, simultaneously painting a favourable image of farming to the

wider public.

It might be suggested that the selection procedure used to obtain case studies for the report

meant that there was a selection bias towards interviewing highly publicised new entrants.

However, the evidence presented here ultimately suggests that for Group 1 new entrants,

engaging in direct marketing and developing customer relations is essential, so it is directly

compatible with this theoretical framework that a significant majority of young farmers have

successfully utilised media coverage in order to achieve these objectives.

The Product

1) Cash flow

Businesses require cash flow in order to remain in operation, however the seasonal nature of

agricultural production is not conducive to maintaining a consistent income stream. This

presents problems for new entrants who have taken on debts that require regular servicing

and who need to purchase farm inputs, thus making it important to select an enterprise that

provides a consistent cash flow.

The Group 1(a) enterprises in this study illustrate this point, all of them offering products that

are comparatively unaffected by seasonal fluctuations51. The relatively consistent income

streams provided by dairy businesses are beneficial in this regard, in part explaining why dairy

enterprises were popular amongst Group 2 new entrants who could overcome the high capital

threshold required to enter this sector. In contrast, in the absence of consistent cash flow, the

enterprise selected must have low cost requirements, as illustrated by the Group 1(b) new

entrants in this study who were predominantly focused on sheep production.

51 Although it should be explicitly stated that this does not mean that they are exempt from the vagaries of of the seasons.

“By far and away the most significant obstacle to entry reported by the entry survey respondents was being able to maintain an adequate cash flow during the first few years.” (Buttel, et al., 1999, p9)

32

“It is often necessary to live on other savings or other sources of income in the early stages of a new business. Remember, the owner gets paid last.” (CFBMC, 1999, p6)

2) Part time

It is unlikely that the proposed fledgling enterprise will initially generate sufficient profits to

enable a significant wage to be drawn from the business. Consequently the initial enterprise

must have a flexible time requirement that allows income to be maintained from alternative

employment. Illustrating this point, over 90% of the Group 1 young farmers had primary

employment elsewhere while their own farm business was growing52. It is effectively a given

that a new entrant will have to maintain an additional income stream in the early stages of

business establishment, and the time commitment the initial enterprise requires must reflect

this.

3) Rare breeds

Rare breeds present young farmers with a number of advantages beyond their suitability to

niche marketing; not least that their alleged greater hardiness reduces the time input involved

in their management and their infrastructural requirements. While it’s hoped a new entrant

will be technically proficient in the enterprise undertaken, rare and heritage varieties may be

more forgiving of possible mistakes and the quality associated with their produce is well suited

to direct sales and niche marketing. Additionally the recent media coverage rare breeds have

received means that part of the marketing of their products has already been completed.

Approximately half of Group 1 new entrants in this study utilised rare breeds in their initial

enterprise, however even across these enterprises the focus on rare breeds varied.

Consequently it is difficult to conclude that there is an unambiguous trend among successful

new entrants to use heritage varieties. Nevertheless, the relationship between using rare-‐

breeds and directly marketing produce is strong, and is indicative of the symbiosis of these two

variables.

52 Notable examples included one individual who maintains 3 separate income streams, and another who had established an 800 ewe flock which in 2010 on average required a mere 29-‐hour week to run, providing free time for allocation elsewhere.

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Section Summary

1. Niche markets offer a protected environment in which to establish a fledging farm

enterprise by shielding new entrants from mainstream competition. Utilised

alongside principles of direct marketing and added value they can optimise business

profitability.

2. Developing customer relations and brand loyalty are essential. Many new entrants

have made the most of media coverage in order to promote their businesses.

3. Products offering consistent cash flow opportunities are favourable, particularly for

new entrants with debt repayment obligations.

4. A secondary income source may initially be required. The enterprise’s labour

requirement should reflect this, only requiring a part-‐time commitment in the early

stages.

34

THE BLUEPRINT – LABOUR

A number of common variables are apparent among the case studies included in this study

aside from the characteristics of their businesses. Many of the issues discussed in the following

section are incredibly subjective and therefore are not predisposed to inclusion within the

strict confines of a ‘blueprint’. That said, failing to mention them would have meant neglecting

a considerable issue; namely that the personal characteristics of a new entrant are highly

significant in determining their success.

Motivation

1) Purpose

Is farming a ‘way of life’? Allot of the new entrants interviewed for this study cited the lifestyle

farming offered as being an attraction that drew them to the profession. However, as Baird

(2011) makes clear, the term ‘way of life’ should not be “used to justify a sub-‐standard business

mindset”, especially in the early stages when business growth is required. Regardless of

whether lifestyle considerations may be motivational factors, while the odds are stacked

against success the business model must be profit focused. Illustrating this point, a number of

the new entrants across both groups in this study, commenced in building enterprises in

sectors that were not their initial preference, recognising greater opportunities in other areas.

The challenges of agricultural production53 mean that “tenacity… or just bloody mindedness”54

is a likely prerequisite to success. If it helps explain motivational factors, farming can be an

“emotion” or a “calling” (Blanche, 2011), but in order to develop a successful enterprise focus

must remain first and foremost on business profitability.

2) Ambition

Many established land owning farm businesses are able to include land appreciation in their

bottom line. For a non-‐land owning new entrant where returns from production are the single

factor contributing towards profitability, production profits must not only match but also

53 Including, but not limited to, the vagaries of the weather, livestock production, disease risks and complex regulations 54 Quoting one of the case studies interviewed in this study

“I accept that not everyone is monetarily driven, but it distorts normal economic forces, and does a disservice to other more progressively minded businesses, when decision making is not based on sound business rationale.” (Baird, 2011, p28)

“Ambition is energy and determination rolled into one. People are either born with ambition or not.” (Williams, 2011, p30)

35

exceed those of an established operator55 in order to fund business growth. This presents

something of a challenge.

“Don’t be a farmer like everyone else” said one case study. For another “operational

excellence” and “top 5%” are practically catchphrases. There are highly skilled farmers

struggling to make ends meet. In order to not only make ends meet, but also grow a business,

operational excellence -‐ or at least aspirations of it -‐ is essential.

All successful new entrants are ambitious; after all there are easier ways to make a living in

agriculture than starting a new farm business, and there are easier industries in which to start

a new business than farming. Thus, for someone to be seriously contemplating establishing

their own agricultural enterprise, it must be taken as a given that they are passionate about the

subject, committed to the cause and incredibly driven, (or at least sufficiently resilient,) to be

able to make it a success.

It is hoped that this final point lifts this issue back out of the utopian rhetoric. That everyone

interviewed in this study was ambitious was an obvious common factor that could not be

excluded. The problem with a less tangible factor such as ‘motivation’, is that in this context it

is difficult to effectively quantify. However, by considering an ambitious personality to be

prerequisite when embarking upon establishing an agricultural enterprise, perhaps it can be

deemed a common foundation stone in determining a new entrant’s success.

Business Skills

1) Goal setting

Most successful new entrants could clearly articulate their aspirations for the future. Goals

were anything from general concepts to measurable targets, but in all cases helped keep the

business on track and prevent investment in unnecessary side-‐lines. This is not to suggest that

driven new entrants loose track of the day-‐to-‐day enjoyment of running their farming

enterprise, simply that they remain focussed on longer-‐term objectives and seek to avoid being

distracted from eventual business goals.

55 Who also has considerable economies of scale

“If you don’t know where you are going, how will you know when you get there?” (Macher, 1999, p233)

36

2) The risk dichotomy

The risk taking ability of young farmers is cited as being one of their key advantages (Shadbolt

and Martin, 2005; Owen, 2009), yet at the same time, a new entrant needs to demonstrate to

landowners and investors that they are not a high-‐risk proposition. This represents

something of a dichotomy, but has a relatively straightforward solution; to overcome perceived

risk, a young farmer must be exceptionally skilled. There is no escaping the need for practical

competence in establishing a farming enterprise, and ‘operational excellence’ is likely to

require more than mere ‘competence’.

3) Practical expertise

The Group 2 interviewees particularly articulated the importance of acquiring relevant

experience before embarking upon their own business, and have evidently done this

themselves. All Group 2 new entrants in this study had completed higher education in

agriculture or a related subject, and all had spent a period of time working overseas furthering

their skills. In advancing their knowledge base they developed their credibility, and ultimately

ensured they appeared a low risk investment when joint venture opportunities arose.

A number of the Group 1 new entrants reiterated the importance of developing practical skills

prior to business establishment. It was explained how an initial period working for other

people was invaluable to enable knowledge acquisition in an environment where others can

compensate for mistakes. Blanche (2011) remarks that such expertise can be “free, cheap or

even cash positive” to develop, and through undertaking a range of different work experience

and employment placements, new entrants can readily acquire necessary skills. By going out

of their way to acquire these skills, new entrants can reduce perceptions of risk towards them,

placing them in a stronger position when embarking upon their own enterprise.

4) Communication

Networking ability and people management skills are essential in starting any business, as is

the capacity to articulate aspirations and objectives. In a rural community where by definition

“The more people you know and the more people that know you -‐ the more opportunity. It’s a direct correlation.” (Blanche, 2011, p52)

“Unless they are of exceptional ability new entrants are regarded as carrying greater risk” (TFF, 2008, p9)

“[I]f you don’t know your meat, make sure you know your butcher really well” (Murphy, Cited in Baird, 2011, p48)

37

there is greater isolation, new entrants must be able to engage with those around them.

Communicative abilities are essential in generating opportunities to access land and capital,

and are also pivotal in developing customer support and business relations.

Passion, ambition, business acumen and commitment are prerequisite skills to establishing a

successful farm business, but they are far more effective if they can be conveyed to others. It

could be a flaw in the selection procedure utilised to obtain case studies for this evaluation, but

all those interviewed in this study were able to clearly explain their stories and convey their

passion for their respective businesses.

5) Commercial acumen

Inevitably there is more to establishing a business than communication, goal setting and taking

risks. Successful young farmers in this study were adept at creating and acting upon

opportunities. They were able to re-‐evaluate and restructure their respective enterprises

when required, and were not afraid of acknowledging strengths and weaknesses of their

businesses. Many of them were confident in their capabilities while being able to recognise

current limitations, were professional in their nature and had a positive mindset.

As one interviewee stated, successful new entrants “have some oomph about them”;

encapsulating the constellation of personal characteristics including intangible factors such as

being driven, sharp and dedicated, that promote business establishment in agriculture.

“99% of the money you make from farming comes from the top 3 inches of your body.” (Blanche, 2011, p53)

Section Summary

1. Following the principles successfully utilised by previous industry participants can make

you an actor, but it is ultimately personal character traits that will make you the George

Clooney of the farming fraternity. While chiselled good looks probably aren’t

prerequisite in furthering an agricultural career, hard work, charisma, drive and the

ability to stand out from the competition are.

2. Practical and business skills are significant in promoting the achievements of new

entrants, but ambition, communicative ability and a hunger for further knowledge are

most likely more important factors in ensuring eventual success.

38

CONCLUSIONS

The evidence collated in this study suggests there are two primary means by which new

entrants can establish their own farming business, detailed below.

Blueprint 1 – the part time micro-‐business

Young farmers may develop a farming enterprise through creating a part-‐time fledgling

business. Small56, niche, low-‐capital enterprises, commonly utilising rare or heritage breeds on

under-‐utilised areas of land, enable new entrants to develop their business skills.

Low-‐capital fledgling businesses by definition have a low funding threshold however if

external funding is required, CSA principles provide a means of securing funds and customer

support. Once a viable business plan has been demonstrated, investment can be mobilised

through effective promotion to private investors that are able to consider the personal factors

that contribute towards successful farm business establishment, and grant funding may also be

available for selected enterprises.

Short-‐term licences initially enable new entrants to access land, before later seeking to

increase security of tenure through longer-‐term lease agreements. As such agreements can be

difficult to obtain, a preferable solution may be to effectively increase security of tenure by

giving the landlord an interest in the business57, in doing so providing them with motivation to

support the longer term success of the enterprise.

It is possible to select a number of agricultural sectors best suited to new entrants. Many

existing arable and vegetable enterprises boast significant economies of scale, utilise capital-‐

intensive machinery and cover large areas of ‘prime’58 agricultural land. These factors make

the sectors poorly suited to prospective new entrants. While contracting opportunities may be

available, new entrants will be in direct competition with existing producers who have more

efficient cost structures, and such work will often be seasonal in nature therefore offering an

inconsistent income stream.

56 Often initially below the size deemed to be ‘commercial’ holding by DEFRA (2010) 57 Perhaps through a profit sharing agreement, or a synergy with another aspect of the landlord’s enterprise 58 read ‘expensive’

”Never let any young man [or woman!] say there are no opportunities in farming. They are there all right, but mostly disguised as hard work.” (Henderson, 1943, p.290)

39

Cattle present comparable problems; their purchase and infrastructural requirements

necessitating substantial capital investment. Suckler cows pose cash flow difficulties59, and

while dairy cattle may be better in this regard, their infrastructural needs are even greater. For

this reason dairy sheep and goats may be preferable, with both their respective milk and

cheeses being well suited to niche marketing campaigns.

Outdoor pigs and poultry both offer opportunities for relatively consistent cash flow

enterprises while requiring reduced initial capital investment. Similarly sheep enterprises also

have lower capital requirements, although their income stream is likely to be less consistent.

However, their seasonal labour commitment may be suited to a new entrant engaged in

similarly seasonal employment elsewhere, and their low infrastructural requirements are

beneficial to new entrants with restricted start-‐up capital.

This argument assumes alternative enterprises are directly substitutable, but in reality this

may not be the case; geographical location, sectorial knowledge and a host of other factors may

ultimately dictate enterprise selection. There are also additional business options that have

not been considered, and there are new entrants in this study engaged in building businesses

in sectors that the above discussion would imply are suboptimal. However, as was said at the

start, the aim of this study was not to find a single best solution, it was instead to look at the

variables that promote a new entrant’s success. In this area, these variables appear to be

finding a niche, developing customer relations through direct marketing and media campaigns,

starting on a part-‐time basis within a low-‐capital enterprise and often utilising non-‐

mainstream breeds. Relevant practical experience in the enterprise to be undertaken is also

important, but it should be noted (although not advised!) that a number of new entrants in this

study commenced upon establishing a micro-‐business in a sector in which they initially had

limited direct experience.

In the long term it will be necessary to produce a business model that is scalable. While the

aims of the operator may ultimately determine the eventual business size, all the case studies

in this report had aspirations of the enterprise undertaken being able to provide full time

employment for at least the primary operator, if they weren’t at this point already. It is

59 A suckler cow, which costs £1000 and likely takes a year to produce a single calf that requires a further 2 years of growth before being marketable as beef, and in between demands costly inputs is not conducive to promoting cash flow. That said, a case study in this paper is engaged in developing a suckler operation, however cited cash flow as being an issue, with “dead money” being tied up in breeding and young stock.

40

possible to develop a business of considerable scale through this route60, but it takes time and

appears to require persistent and steady growth.

Blueprint 2 – the joint venture

A second means by which a new entrant can develop a farm enterprise is through initially

engaging in a joint venture with an established operator.

Shadbolt and Martin (2005) suggest that joint ventures are well suited to the dairy industry.

The ‘tie’ of milking cows twice a day requires enthusiasm and energy, perhaps best offered by a

new entrant and the consistent income stream dairying provides is also attractive to joint

venture participants, as is the simplicity of an enterprise with a single primary output. The

high returns on capital dairy enterprises can offer adds to the sector’s appeal and the New

Zealand sharemilking model serves as an excellent guideline in illustrating the benefits and

opportunities joint ventures in the dairy industry can offer. Thus although it is possible for

new entrants to successfully employ joint ventures in other sectors61, for the reasons outlined

above, they are particularly well suited to the dairy industry62.

While engaging in a relatively high capital sector selling a product on a market effectively set at

a commodity level runs contrary to much of the discussion in previous sections, a joint

venture63 can enable new entrants to achieve the scale required to compete with established

industry producers, thus making this option viable.

All of the individuals within this study who were included in Group 2 have studied agriculture

or a related topic at a higher educational level and have also spent a period working abroad. As

well as reinforcing the need for significant prior experience in the field, it could be inferred that

these two common features indicate that joint ventures are most successfully employed by

inquisitive individuals who are prepared to search for opportunities, are ambitious, and have a

desire to accumulate knowledge and skills.

60 By way of a well-‐known example, Bernard Mathews started with 20 turkey eggs and an incubator back in 1950. 61 As per one case study in this report who has engaged in a number of joint venture agreements in establishing his arable and sheep enterprise 62 As exemplified by 3 dairy farmers in this study, all of whom are succesfully utilising joint venture agreements 63 Be it contract farming, sharemilking, an equity partnership or any other agreement

41

Requirements for success in pursuing this avenue therefore include excellent communicative

and negotiation abilities, as well as management and technical expertise64. It also appears to

be necessary for young farmers who are engaging in joint ventures to be able to provide a

degree of personal capital to the enterprise, and it is essential that they are good at networking

in order to generate the contacts needed for joint venture opportunities to materialise. A

proven track record is vital, without which engaging with a new entrant will, understandably,

be considered to be too great a risk. Developing this track record takes time but once attained,

it can ultimately be expected that the period of business growth that accompanies the joint

venture establishment will be rapid. The young farmer may be able to leverage their business

interest against another party’s assets, and the knowledge and skills sharing between the

individuals should optimise returns.

64 After all, a new entrant is needing to persuade an established operator that an enterprise would benefit from their involvement

42

ENDNOTE

In hindsight it is perhaps inevitable that the two blueprints for establishing a farm business are

either to grow a part-‐time micro business or to accumulate skills and then search for joint

venture opportunities. However, all the evidence collected suggests these two models

ultimately provide the best templates for young people looking to develop a farming

enterprise, and so I hope that through beginning to unpick some of the issues surrounding

these two blueprints, this discussion has been of some use.

Perhaps of greatest value in this study is the body of evidence that has been collected that

suggests it is possible for new entrants to develop their own farm business. This dissertation

has collated a list of just a few of those who have succeeded (or are in the process of

succeeding) in developing their own agricultural enterprise, and so by bringing together this

evidence, it is hoped that others considering starting their own farm business will be motived

to pursue this aim.

From the point of view of creating a blueprint, it is a shame that personal characteristics of a

new entrant make such a difference in determining the success of a new farming venture; after

all, these vague and semi-‐tangible factors are near impossible to include within the rigid

confines of a model business plan. Nevertheless, from the perspective of a prospective new

entrant, the significance of human factors is very encouraging as they are something it is

possible for an open-‐minded individual to change.

There is little a single young farmer can do to fundamentally alter the system they are

presented with, but personal character traits and attributes certainly aren’t fixed. At an

individual level it is possible to acquire the skills, do the networking and set ambitious targets.

It is possible to develop practical expertise, to be hardworking and acquire required contacts.

If individual characteristics are so important in developing an agricultural enterprise then it

follows that it therefore must be possible for a new entrant to get into farming. Thus it is only

hoped that the two blueprints described above, as evidenced by the case studies in this paper,

provide a tentative framework from which to begin when looking to develop a farm business.

“Farming looks mighty easy when your plough is a pencil and you’re a thousand miles away from the corn field.” (Eisenhower, 1956)

43

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England research and development paper. Available at: <http://www.rase.org.uk/what-‐we-‐do/publications/journal/2009/15-‐86429shdbx65sks7.pdf> [Accessed 25 September 2011] Ingram, J. and Kirwan, J., 2011, Matching new entrants and retiring farmers through farm joint ventures: Insights from the Fresh Start Initiative in Cornwall, UK, Countryside and Community Research Institute, University of Gloucestershire, Land Use Policy 28 (2011) pp. 917-‐927 King, J., 2011, Where are all the young entrepreneurs?, Farmers Weekly, 2 December 2011, p2 Kyle, M., 2006, Successful Family Dairy Farm Business Expansion – Getting The Balance Right, Nuffield Farming Scholarship Report. Available at: <http://www.nuffieldinternational.org/rep_pdf/12595801062006_Michael_Kyle_Nuffield_Report.pdf> [Accessed 25 October 2011] LandShare, 2012, The Land Partnerships Handbook: A new approach – using land to unlock business innovation, [PDF] Available at: http://www.landpartnerships.org/ [Accessed 20 January 2012] LANTRA, 2009, Your future and farming survey – October 2009, A report conducted by the National Federation of Young Farmers’ Clubs in assciation with LANTRA. LANTRA, 2011a, UK Skills Assessment 2010/2011, [pdf] Available at: <http://www.lantra.co.uk/Downloads/Research/Skills-‐assessment/UK-‐Skills-‐Assessment-‐(2010-‐11).aspx> [Accessed 23 September 2011] LANTRA, 2011b, Agriculture factsheet 2010-‐2011, Available at: <http://www.lantra.co.uk/Downloads/Research/Skills-‐assessment/Agriculture-‐v2-‐(2010-‐2011).aspx> [Accessed 23 September 2011] Macher, R., 1999, Making Your Small Farm Profitable, Storey Publishing, United States Mishra, A.K. and El-‐Ostra, H.S., 2008, Effect of agricultural policy on succession decisions of farm households, Rev Econ Household, (2008) 6: pp.285-‐307. Available at: <http://ddr.nal.usda.gov/bitstream/10113/36643/1/IND44297851.pdf> [Accessed 27 December 2011] The National Trust, 2001, Farming Forward, [pdf] London: The National Trust. Available at: <http://www.nationaltrust.org.uk/main/w-‐farming02.pdf> [Accessed 11 September 2011] The National Trust, 2008, Calling all new entrants, [pdf] Special project newsletter for new entrants to agriculture – winter 2008, Available at: <http://www.nationaltrust.org.uk/main/w-‐new-‐entrants-‐newsletter.pdf> [Accessed 23 September 2011] Naylor, M., 2011, Binning stereotypes will make all the difference, Farmers Weekly Magazine, Issue dated 10 June 2011, p. 44 ONS (Office for National Statistics), 2011a, Labour Market Statistics, [pdf] Statistical Bulletin, July 2011. Available at: <http://www.ons.gov.uk/ons/publications/index.html?pageSize=50&newquery=agriculture&

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sortBy=pubdate&sortDirection=DESCENDING&content-‐type=publicationContentTypes&pubdateRangeType> [Accessed 3 October 2011] ONS (Office for National Statistics), 2011b, Average actual weekly hours (by industry sector), [pdf] Labour market statistics data tables: September 2011, Table HOUR03. Available at: <http://www.ons.gov.uk/ons/dcp171766_231681.pdf> [Accessed 24 September 2011] Owen, C. and Cowap, C., 2009, Assessing the role of the Fresh Start Academies in encouraging new entrants into farming, [pdf] Harper Adams University College, RICS Rural Research Conference. Available at: <http://www.rics.org/site/download_feed.aspx?fileID=3466&fileExtension=PDF> [Accessed 25 September 2011] Padwick, N., 2010, Farm Workers Survey, Survey of 2000 farm workers, results published in Farmers Weekly Magazine, Issue dated 2 July 2010, pp. 20-‐21 Payne, A., 2012, How do you find a million more farmers? A view from Reclaim the Fields, Article available at: <http://www.campaignforrealfarming.org/2012/02/how-‐do-‐you-‐find-‐a-‐million-‐more-‐farmers-‐a-‐view-‐from-‐reclaim-‐the-‐fields/> [Accessed 29 February 2012] Pigott, I., 2011, New generation needs to think in new ways, Farmers Weekly, 9 December 2011, p28 Princes Trust, 2008, Cultivating the next farming generation, [pdf]. Available at: <http://archive.defra.gov.uk/foodfarm/farmmanage/working/new-‐entrants/documents/cultivating-‐farming-‐generation.pdf> [Accessed 26 September 2011] RICS, 2011a, A report from Fresh Start – Farming Ladder Seminar, [pdf] Wednesday 10th March 2011, RICS Rural Professional Group. Available at: <http://www.rics.org/site/download_feed.aspx?fileID=9406&fileExtension=PDF> [Accessed 25 September 2011] RICS, 2011b, RICS Rural Land Market Survey, H1 2011, [pdf] RICS. Available at: <http://www.rics.org/site/download_feed.aspx?fileID=10220&fileExtension=PDF> [Accessed 25 September 2011] Salatin, J., 1998, You Can Farm – the entrepreneur’s guide to start and succeed in a farm enterprise, Polyface, Inc., Virginia, USA Shadbolt, N. and Martin, S., 2005, Farm Management in New Zealand, Oxford University Press, Australia and New Zealand Soil Association, 2011, The impact of community supported agriculture: Key features and benefits, [pdf] A paper reporting headline findings of Provenance’s evaluation for the Soil Associations project to support CSA –part of Making Local Food Work, Bonnie Hewson and Nick Saltmarsh. Available at: http://www.soilassociation.org/LinkClick.aspx?fileticket=LtYMykIPP3w%3D&tabid=204 [Accessed 05 January 2012] Spedding, A., 2006, Focus on the Future, [pdf] A Royal Agricultural Society of England report, prepared by Alan Spedding. Available at:

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<http://www.rase.org.uk/events/conferences/focusreport.pdf> [Accessed 22 September 2011] Spedding, A., 2009, New Blood – Attracting the best young people to agriculture, [pdf] A Royal Agricultural Society of England report, prepared by Alan Spedding, Available at: <http://www.rase.org.uk/news-‐and-‐media/latest-‐news/NewBloodReport.pdf> [Accessed 22 September 2011] Tasker, J., 2011, A fair deal for apprentices would benefit us all, Article published in Farmers Weekly Magazine, Issue dated 18 March 2011, p. 3 Tenancy Reform Industry Group (TRIG), 2003, Final Report, [pdf] published by DEFRA. Available at: <http://ala.org.uk/mats/TRIGReport.pdf> [Accessed 5 October 2011] Tenant Farmers Association (TFA), 2010, 2020 Vision for Agriculture – From the Perspective of the Tenanted Sector of Agriculture in England and Wales, Tenant Farmers Association, Reading Tenant Farming Forum (TFF), 2008, Assisting New Entrants Into Scottish Farming – Recommendations To The Cabinet Secretary, [pdf]. Available at: <http://www.tenantfarmingforum.org.uk/resources/000/244/596/38_BARRIERS_TO_NEW_ENTRANTS_TO_SCOTTISH_FARMING_-‐_Final_Copy__2_.pdf> [Accessed 25 September 2011] Walker, J., 2011, The next generation needs a viable farming ladder, Article published in Farmers Weekly Magazine, Issue dated 13 May 2011, p. 33 Williams, F., 2006, Barriers Facing New Entrants to Farming – an Emphasis on Policy, [pdf] SAC Land Economy Research Group. Available at: <http://ageconsearch.umn.edu/bitstream/46002/2/Work17%20Williams.pdf> [Accessed 25 September 2011] Williams, R., 2011. Wealth creation in dairy farming, Nuffield Farming Scholarships Trust, A Trehane Trust Award. Available at: <http://www.nuffieldinternational.org/rep_pdf/1322733057Rhys_Williams_edited_report.pdf> [Accessed 2 December 2011] Whitehead, I., Errington, A., Millard, N. and Felton, T., 2002, An Economic Evaluation of The Agricultural Tenancies Act 1995, [pdf] Newton Abbot: The University of Plymouth. Available at: <http://archive.defra.gov.uk/evidence/economics/foodfarm/evaluation/ata1995/finalrept.pdf> [Accessed 5 October 2011]

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APPENDICES

Case Studies

Detailed below are the case studies that formed the primary research used in this study. Some

of this information was consolidated in the table presented on page 14, and the discussion

preceding this point consists of my interpretation of this evidence. Compiling these case

studies was truly inspirational and for myself will most likely prove to have been a career

shaping experience. I am incredibly grateful for all of their help and encouragement, and only

hope that my brief summaries of these outstanding individuals do some justice to their

fantastic and varied stories.

Group 1(a)

Sam Steggles

Primarily producing goats milk and cheese under the ‘Fielding Cottage’ brand, Sam runs his

businesses while maintaining a full time job in the poultry sector, and employs a couple of staff.

Starting in October 2009 with 10 goats, the herd has expanded through breeding replacements

and buying in extra stock, and currently milks in the region of 50 nannies, with billy’s

historically bought in and then sold after mating to keep costs down. Renting a local farmer’s

barn has provided Sam with the minimal amount of land needed to start the business, and has

provided his landlord with a new diversified income stream on an otherwise arable and

poultry farm. Furthermore, Sam has been able to source straw and hay from his landlord,

strengthening their relationship. A £5000 grant helped fund investment in the parlour and

dairy, and also serves as evidence of other people’s belief in his business.

By way of marketing, Sam makes great use of social networking sites and has had media

coverage in regional and national papers. Fielding Cottage products are sold at 2 to 3 markets

per week, and through producing dairy products, output can remain (relatively) constant all

year, enabling continued cash flow. Diversification into pigs fed on the whey that is produced

as a by-‐product of cheese making has provided an additional income stream, as has a goat meat

box scheme for some of the surplus male offspring. Currently exploiting a significant niche by

being the only goats cheese producer in the county, Sam has ambitions to keep growing, and

looks to eventually have a considerably larger herd of nannies.

Sam demonstrates how through making use of under-‐utilised land and engaging with a

landowner it is possible to secure a plot on which to start a business. He clearly illustrates how

exploiting a niche market can help a fledgling enterprise to grow and is an obvious example of

how hard work and determination are key in getting an enterprise of the ground, with his

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successful business illustrating what can be achieved when you are prepared to put in the

hours either side of a day job.

Matt Dale

Having initially started the business with the purchase of 3 cows in 2006, North Aston Dairy is

an organic micro-‐dairy, producing un-‐homogenised milk from a herd that now numbers in the

region of 20 Ayrshire cows. Run on 40 acres of a larger diversified estate, the dairy employs 2

full time staff equivalents, and is closely tied to other enterprises on the larger farm. While the

land the dairy is on is rented, there is a small profit share agreement with the landlord.

Machinery sharing is commonplace (even an Aberdeen Angus bull is borrowed for 9 months of

the year), and the dairy shares some of its delivery round with an organic vegetable box

scheme. Through directly marketing a niche product, profit margins are optimised, and there

is seemingly an insatiable demand for the milk.

Cow longevity is maximised (thus reducing replacement costs) through managing a welfare

friendly, low stress environment. The dairy cows are run on a 15 month-‐cycle, of which only

the first 6 months are spent in the milking herd. Calves are then adopted onto a cow who is

been milking for 6 months, and fostered for a 6 month period before being sold as rose veal.

Effectively the herd therefore functions as a suckler herd within a dairy herd, with milk

customers encouraged to buy veal in proportion to the amount of milk they consume.

‘Cow bonds’ were used to initially finance buying the cattle, with investors contributing

towards a 3 year fixed bond with a 5% rate of return. It enabled Matt to obtain credit at a rate

far cheaper than the banks were offering, and also proved to be a fantastic way of attracting

long-‐term customers.

As a business model it is incredibly replicable, indeed it would be mutually beneficial if another

micro-‐dairy were to set up reasonably near by. The milk round provides a consistent income

stream, while sales at farmers markets are able to absorb any surplus. While not necessarily

being an example of a CSA as per the Soil Association definition, the local community is the sole

customer of North Aston Dairy, and it is also members of the community who have invested in

the ‘cow bonds’ that helped to get the business off the ground.

Rona and Nevil Amiss

Rona’s story in many respects reflects what one might traditionally regard as the first

generation ‘farming ladder’. Both her and her partner Nevil are from non-‐farming

backgrounds but were desperate to farm. After completing their studies at Harper Adams, they

worked on a range of farms, making the effort to accumulate the skills they required. After

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applying for a number of tenancies they realised that lots of other applicants were already

running micro-‐businesses which were giving them a competitive edge, so Rona and Nevil

therefore established a flock of Herbridean sheep and started rearing chickens and geese on a

small scale. This meant that when they later applied for further tenancies, they were all the

more credible when stating they intended to directly market their produce, having already

obtained considerable experience in this area.

Hitting the organic niche just as it was taking off, in 1999 the couple obtained a 180-‐acre

tenancy on Exmoor, and in 2005 moved to a 57-‐acre farm rented from Devonshire Country

Council. They expanded their poultry processing facilities, and now rear ducks for meat and

eggs, geese for Christmas, have a flock of 70 sheep, a herd of 20 cows and some pigs, all on 57

acres! On top of this they have additional farmers contract rearing chickens for them, have an

on site abattoir and butcher, and employ two additional full time employees plus some part

time staff.

Having just completed a Nuffield Scholarship report on New Entrants (see Amiss, 2011) Rona

has started an additional side-‐line rearing goat kids, and is investigating applying principles of

CSAs from the USA to pig production over here. Through direct marketing and a few wholesale

orders to a list of clientele that include the likes of Hugh Fearnly-‐Whittingstall and Duchy

Originals, the pair remain closely connected to their customers, with Rona suggesting that the

customers not only buy the produce, but also buy a bit of your life.

By running a highly diversified business the couple clearly illustrate how intensive it is

possible to be on a small acreage, as well as the importance of marketing and identifying

niches. In her Nuffield report Rona posits the question; “Is a 57-‐acre tenanted farm making a

living for a family of seven successful of not?” (Amiss, 2011, p14). The answer has to be a

resounding Yes.

Lucy Hollands and Damian van Aswegen

Ever since I visited Lucy and Damian at the Rare Breed Pig Company, I’ve been wittering on

about the benefits of pigs in woods. Their enthusiasm is infectious, their award winning

sausages are delicious, and their rapid business growth is quite remarkable.

Deciding they wanted to follow a career in farming, Lucy and Damian googled ‘pig keeping

courses’, and after attending a one-‐day event, they bought 4 pigs. In 2007 they started their

business on 5 acres of rented woodland, and are now renting a 40-‐acre site. Currently they

have 45 sows, (having only started breeding pigs in earnest 2 years ago) and around 200 pigs.

They have recently opened a fantastic farm shop, look to reach 350/400 pigs in the near future,

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and are in the process of helping other new entrants establish alternative enterprises to supply

them with additional products.

Lucy is able to clearly articulate why pigs in woods is an absolute no brainer. With woodland

often sitting unused, forest enterprises provide landlords with the opportunity to earn an

additional income stream, and by rotating pigs around different areas of the woodland, they

can transform the undergrowth and forest floor. The trees provide shelter meaning the pigs

can be outside all year, saving on capital/housing infrastructure. Rare breeds are at home in

the outdoor environment, and even if they do take a bit longer to grow, could not look more

content in amongst the trees.

In spite of the couple producing an excellent business plan, banks proved to be unwilling to

lend the money needed to get the business off the ground. Thus initial funding came from

personal savings and financing from private investors who were able to recognise the human

factors about Lucy and Damian that were likely to mean that they were successful. By growing

the business in stages (albeit very fast) the capital investment has also been more bearable.

Amongst other things, Lucy and Damian illustrate that if you do your homework, produce a

sound business plan and are well versed on what you are looking to achieve, then landlords

will be more likely to consider your business propositions. They also demonstrate that non-‐

traditional sources of capital are available and are another example of the benefits of direct

marketing and finding a niche.

Chris Fogden

Chris is first generation pig producer who started his business in 1987. He liked the idea of

farming dairy cows, but the quota system presented difficulties, and so he elected to start up

with pigs; recognising that the business could be commenced with a relatively small capital

investment and that it offered the potential for rapid growth. Outdoor pig production provided

the opportunity for a regular cash flow, and ticked many other boxes, with outdoor pig

breeding still being a production niche.

Starting with 60 sows on a ten-‐acre site, Chris’s business was able to grow rapidly, with the

outdoor system he adopted being comparatively easy to restructure, where a more intensive

indoor system would have had its growth constrained by its existing infrastructure. He found

there was a ready market for his piglets, and so in spite of considering direct sales, ultimately

never needed to pursue this route. Through networking and making use of existing farming

contacts Chris took advantage of short-‐term leases on light land which, while meaning he was

competing with vegetable producers who could offer high rents, at least provided him with the

space the business required.

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Having grown to 1,000 sows and moved into finishing pigs too, the business was forced to

restructure in light of higher feed costs. Chris took a step back, re-‐evaluated his system, and

was able to implement changes that increased production from 18 to 24 piglets per sow per

year.

Chris’s successes again show how important it is for new entrants to exploit niche markets in

the initial stages. He reiterated that “tenacity… or just bloody mindedness” is essential in

bringing success, and how co-‐operation with other producers can have great mutual benefits.

However, perhaps more than anything else, he clearly illustrates how important it is to remain

business focused, to take opportunities as and when they arise, and to re-‐evaluate and re-‐

structure your business as required in order to optimise profitability.

Ed Hamer

"Start small, be enthusiastic, be hardworking" says Ed. His successes illustrate what can be

achieved when you do just that.

Growing up in a rural area where paper rounds weren't available, Ed engaged in part-‐time

farm work while at school. Seeing the way the farming landscape was changing got him

"hooked" on pursuing a career in agriculture, and culminated in him completing a degree in

agro-‐forestry, focusing on tropical agriculture. An interest in agricultural policy led him to

work in Uganda, Jamaica and Mexico, before deciding the tropical climate wasn't for him and

returning home. Back in the UK Ed worked as a journalist and for the ecologist magazine, and

in the process was exposed to allot of literature regarding sustainable agriculture, but became

aware that not many people were putting the theory into practice.

Recognising there were lots of local beef and dairy farms, he identified a niche that could be

utilised growing organic vegetables. He then met Chinnie Kingsbury, co-‐founder of Chagfood.

Together they were able to obtain a grant toward the capital costs involved in establishing the

business (under the lottery funded 'making local food work' campaign) and so proceeded to

use his existing farming contacts to acquire a plot of land.

Operating on a 3-‐acre site, the business now supplies 50 vegetable boxes per week to the local

community, and follows a CSA model. Initially customers were sourced though public

meetings; with the planning permission application process required for the business'

polytunnels being beneficial in raising awareness and bringing public support. However Ed

suggests that one of the business' greatest marketing tools is their horse, Samson. As well as

doing the majority of the cultivation work, taking Samson on the veg box delivery round raised

awareness of the scheme among the local community.

With grant funding expiring this year, the businesses will need to be producing 75 veg boxes

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per week, and at that stage will finally be able to provide full time employment for Ed and

Chinnie. He estimates the optimal size for the business will be producing 120 boxes per week,

at which point it should be capable of sustaining two full time employees as well as additional

seasonal labour. Ed believes his successes are absolutely replicable, and that while the grant

funding was unquestionably beneficial, the business would still have been able to get off the

ground without it, (although its development would have been slower). His achievements show

how CSA's are well suited to new entrants, offering a "built in resilience" through encouraging

consumer engagement, and providing working capital upfront.

Group 1(b)

Michael Blanche

Michael has been unbelievably helpful in offering advice and guidance when he has evidently

been extremely busy caught up with other things. For that I owe him a massive thanks.

His commitment as a new entrant is phenomenal. He calculated that in the past 5 years he’s

spent 1100 hours driving to and from his sheep, costing £20,000 in fuel and in the process

covering a distance equivalent to twice the circumference of the globe. And more recently he

has quite literally travelled around the world researching ‘the farming ladder’ (see Blanche,

2011).

A first generation farmer and farm consultant, Michael a spent number of years working for the

SAC as an advisor which he described as being like “working in a sweetie shop”, with experts

always available on the other end of the phone. But in 2003, deciding he was desperate to farm

in his own right, he bought 50 ewes using a balance transfer from a credit card, and since then

has expanded to a 600 ewe flock, spread across seasonal lets. With a previous landlord he had

an arrangement that approached being a share-‐farming agreement, and more recently has

finally managed to secure the tenancy he has been searching for. Having obtained this new

land he has started also rearing dairy bull calves in order to increase cash flow, making use of

joint venture principles to the parties mutual benefit.

Michael is evidently ambitious. In his own words; “I have to be the very best farmer I can

possibly be. Achieve Operational Excellence. Be in the Top 5% of producers. Gulp.” He

believes the 33% p/a equity growth he has achieved to date isn’t nearly enough growth if he is

serious about building a farm business of true worth, and accordingly has begun experimenting

with paddock and cell grazing systems with his ‘open composite’ breed of sheep.

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Gareth Barlow

When asked what advice he’d give to another new entrant looking to replicate what he’d

achieved, Gareth’s response was; “Believe in yourself from the outset”. In many respects I’d

say that his success and considerable publicity demonstrate just that, while he is quick to

recognise the contribution of others.

Having kept a few sheep since 2007, Gareth left university to follow his farming ambition. In

April 2010, his business started to take off, and under the trading name of Howardian

Hebrideans, he sold 150 lambs in the 2010/2011 season. With a flock currently numbering 40

ewes, he intends to have 75 in the near future, and sell around 450 lambs from April 2011-‐

2012, buying in stores to make up the shortfall.

Incredibly growth orientated and with considerable business acumen, Gareth describes how

turnover is essential, not wanting money to “stick around”. Buying stores creates variety in the

flock, enabling lambs to be sold all year and improving cash flow. Nonetheless, cash flow

remains the key variable currently limiting business expansion, with Gareth indicating the he

hasn’t had too much trouble finding land, recognising that if people can see you doing a good

job elsewhere, they will generally be willing to offer you a couple of additional acres.

Working part time as a butcher, it is apparent that he is accumulating key skills that will help

his business grow further and is reducing the additional costs of adding value to his products

by doing the butchery himself, with the result that direct marketing is proving to be an

excellent sales route. Giving samples to restaurants, having newspaper and magazine articles

published, and using social media sites such as twitter, has all helped Gareth to build his

customer base. Furthermore, his coverage by the BBC has thrown him into the media spotlight,

and has certainly helped in building the credibility of his brand.

So is his model replicable? Yes, but… “Geography matters”. Location has played a big part in

helping the business grow. Yorkshire is very food based, and has allot of Michelin Starred

restaurants which has helped Gareth to exploit a considerable food niche. Rare breeds have

proven to be a successful avenue to pursue, but customers have needed to be educated as to

their benefits.

Finally, the big question is the BBC coverage – has that been critical to his success? No, I’d say

it hasn’t – his drive and determination has probably been more important. But has the media

coverage nonetheless been helpful? Yes, most likely.

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Emma Gray

Emma cites her success as being down to the fact that she has “been incredibly lucky”.

Perhaps, but I think that there is clearly more to it than that.

A daughter of tenant farmers, Emma is a case study who technically isn’t a first generation

farmer. However, with her parent’s tenancy being relatively short-‐term, there was little

prospect of any succession, and so she was left in the position of a textbook new entrant, albeit

with the benefit of extensive background experience. Upon completion of a sheep management

course, Emma proceeded to take a shepherding job for 4 years, but was keen to farm in her

own right, with her own sheep and her own business.

After applying for a number of tenancies, she applied for a 5-‐year tenancy at Fallowless Farm –

a National Trust property. Lacking allot of basic infrastructure, being very isolated and quite

small with severely disadvantaged land, she thought there would be little demand for the farm.

In fact there were 25 cars at the open day, and a great deal of competition for the tenancy.

Suspecting the National Trust were keen for the land to be used for agricultural production,

Emma produced a business plan that demonstrated her intention to farm. Furthermore, she

recognised that the National Trust would most likely welcome the publicity she was already

been receiving for her sheepdog trialling successes. By evaluating what the landlord was

looking for, and seeking to meet their requirements, Emma was able to secure the tenancy,

seemingly against the odds.

Since beginning to farm at Fallowless, Emma’s public acclaim has escalated. Being a girl in a

predominantly male dominated sheepdog trialling circle meant that her successes with her

dogs attracted attention from the media, which led to an article in the Daily Mail, and

subsequently an appearance on the BBC’s Countryfile. However, her publicity has by no means

been essential in her success. By having a diversified income stream stemming from sheepdog

training and breeding, contract shepherding and her own flock, she has provided herself with a

more stable income while her own flock grows.

Emma suggested that one of the main problems she faced, and continues to contend with, is

getting ‘stocked up’. Due to livestock being so expensive to purchase, Emma only needed a

small farm to get started, however a smaller farm (especially of the type of land she farms) is

only able to generate limited returns making it difficult to fund the expansion she is seeking.

Nevertheless, by growing steadily, Emma is able to ensure that risks are taken in an

environment where mishaps are less significant, and her previous practical experiences have

enabled her to make any mistakes in an environment where the effects are less pronounced.

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Evidently incredibly bright and personable, Emma illustrates the importance of standing out

from the crowd and looking to set yourself apart from other parties competing for resources.

She also exemplifies the need to cater your proposed enterprise to a landlord’s requirements,

and how it is useful to have a diversified income stream in the initial stages of business

development.

Tim White

When I interviewed Tim in November he said “Don’t be a farmer like everyone else”. I presume

he meant differentiate yourself from other farmers, as opposed to give up on a career in

farming altogether! The former being the case, its a quote that has stuck with me ever since.

Coming from a non-‐farming background, Tim spent a number of years working on a range of

farms, before undertaking an environmental science degree. However that reinforced to him

that more than anything he wanted to farm and be self-‐employed, so he went to work on a

large farm where he articulated that a condition of his employment be that he should have a

patch of land to farm as he wished. Starting a 20 cow suckler herd exploiting a niche producing

organic veal, he was forced to rethink the business in the face of increased competition, and

bought a couple of hundred sheep (“as a hobby”!) instead.

In 2007 he started his sheep business in earnest, placing an add on the soil association website

looking for land, and contacting local landlords. Presently he has 8/900 ewes spread across 4

sites of short term grazing lets, and relief milks for one of his landlords in exchange for winter

grazing. Building a local reputation has helped him secure additional grazing, with landlords

willing to rent him pasture having heard of the good job he has done elsewhere. Currently his

land is widely distributed, with him about to take on additional grazing 60 miles from his base,

but by employing someone else to do the day-‐to-‐day stock checks, this presents few significant

problems.

Tim’s ability to exploit niches and his innovative ideas have been key to bringing success, with

him recognising that both factors are important when competing with larger established

producers who have considerable economies of scale. His involvement in breeding Exlana

sheep (a new ‘easily managed’ type dam line for prime lamb producers) has provided him with

a beneficial sales route, and signs beside footpaths that cross his grazing land attract further

customers.

Furthermore, Tim manages his time carefully. In 2010, his sheep enterprise only required on

average a 29-‐hour week, and he has aspirations to farm 3/4000 ewes in a ranched low input

system, while only being required to spend 40 hours per week on the flock.

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Tim offered a number of helpful pieces of advise. Firstly he made clear that if your intial

enterprise fails, then don’t worry, just switch to something new. Secondly be emphasised the

importance of asking for help and taking opportunities as they arise; that’s how you make

progress. He also reiterated the importance of getting on and getting started while you are still

young, and that it is effectively a given that you will initially have to work elsewhere to

maintain an income stream while your business gets established.

Helen Reeve

Although Helen’s family have a history of involvement in farming, there was no prospect of

inheriting a family farming enterprise. The gift of a Dexter heifer when she was 14

galvanised her desire to pursue a career in farming, and following completion of her GCSEs

she embarked upon employment at a local dairy farm. Subsequently she went on to

complete an NVQ and HND in agriculture, all the while developing practical skills through

continued employment at the same dairy farm where she continues to work to this day.

In 2007 she reached a turning point – either it was time to give up with the 5 Dexter cows

she had, or push on and establish a business of her own. Electing the latter option, she

proceeded to grow the herd which now numbers 34 cattle, under the Waveney Dexters

brand.

Helen says that obtaining land has been the key factor constraining her businesses growth,

with her currently being confined to an 8-‐acre paddock. Strong local demand for grassland

makes securing additional pasture difficult, although she is now looking to pursue

opportunities for conservation type grazing, with Dexter cows being well suited to such

land. Through converting a redundant gilt-‐rearing shed on a larger farming estate she has

provided herself with much needed buildings and a base for her business.

Keen to minimise borrowings, Helen has funded business expansion with personal savings,

and has benefitted from two trust funds -‐ the Chris Lewis Award, and the Growing Business

Award. While cash flow remains tight (with suckler cows tying up allot of “dead money”)

Helen is reluctant to take on debts, preferring to fund business expansion through natural

growth, and in 5 years time is looking to be running around 70 head of cattle.

Helen in part attributes her success as being down to her being in the “right place at the

right time, and speaking to the right people to get the right results”. However, through

direct marketing a niche product she is looking to further add value and develop an

established brand, eventually seeking to gain full-‐time employment though her own herd.

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Group 2

Robert Law

In a very successful career as a first generation farmer, Robert has progressed from being a

new entrant to winning the accolade of Farmers Weekly Farmer of the Year in 2006. It is

therefore not a surprise that he was described to me as being “the ultimate new entrant”.

Following on from holiday employment as a farm worker and then a period studying at Harper

Adams, Robert returned to the farm he had worked on in his teens and progressed to becoming

a manager and later an equity partner on the arable and sheep farm. 7 years down the line, the

partnership split and Robert bought out the other partner on half of the farm using existing

capital, a family loan and a large mortgage. Realising in the early 90’s that the farm business

had to expand to remain viable, new grazing was found at a racehorse stud, and more land was

taken on, with the original partner resuming being involved in the operation in the mid 90’s.

Additional land was subsequently purchased, contracting taken up in new areas, and the sheep

flock expanded on to new grazing. Currently the arable operation spans over 3,000 acres, and

700 acres of grazing are available at various times in the year, spread a considerable distance

around the central farms.

While Robert’s success demonstrates what is possible, aspects of his story are inapplicable to

current new entrants, not least that some of his land is currently farmed under ‘old style’

tenancies that are no longer common practice, and also that he was able to take on large loans

that are unlikely to be available in today’s credit market.

Nonetheless, many key principles of Robert’s success are applicable to current first generation

farmers. Producing sheep in a largely arable area has enabled the business to keep expanding

on land for which there is limited local demand, and the initial partnership proved to be a

successful way of building equity. Furthermore, while Robert says he has had to ‘muddle and

struggle through’, all I have seen of his businesses suggests it is incredibly efficient, employs

highly skilled staff, and has been very growth orientated to reach its current scale. On top of

this, contracting arrangements where profits are shared, have also enabled him to successfully

compete for new land.

Rhys Williams

Coming from a family who had a 10-‐acre smallholding and with his father working for the

NFUW, Rhys certainly had an agricultural background but had no great farming enterprise

to inherit. Recognising the best-‐paid jobs existed in dairy farming, he therefore took a job

as a herdsman, soon being promoted to farm manager. Desperately wanting to farm on his

own account but realising there were few opportunities available at the time, Rhys went to

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work for DEFRA for a period that coincided with the 2001 F&M outbreaks, and learnt

valuable people management skills in the process. However, aware that this was not for

him, in 2002 he and his partner set off to New Zealand to start sharemilking, with the goal

of owning 500 cows in 5 years, but in 2004 were drawn back to the UK following an

unexpected meeting with a local land owner looking to enter into a partnership.

Returning to Wales, the grass based milking system took off. Starting with a 7% share of an

80 cow herd in 2005, he now has a 50% share in 1600 cows and smashed the 500 cows in 5

years target on route.

Looking forward, Rhys is keen for further growth, so much so that he embarked on a

Nuffield Scholarship of his own to “look at farm business structures that encourage and

enable both expansion and rapid wealth creation” (Williams, 2011, p1). Looking to employ

only the best staff, he seeks out the top students he can find and then arranges work

experience for them in New Zealand (Baird, 2011), and has aspirations of running a

significantly larger herd in the future.

Rhys is unequivocal proof of the returns that are available through well-‐run farming

operations. Dairying offers high returns on capital employed, but the initial capital

requirement is large. His focus on return on capital and equity growth are phenomenal,

and his success is a clear indication of what can be achieved when you set targets, get your

head down and get on with it. He was inspirational to meet, and has me completely hooked

on the career opportunities presented by grass based dairying.

Adam Boley

With a family already involved in dairy farming, it was a natural progression for Adam to head

to Agricultural College. Enthused by grass based dairying systems he proceeded to fly out to

New Zealand the day after his final exam in order to begin his “real education”, and spent 3

years immersed in dairying on the other side of the world, acquiring skills and “living and

breathing low cost milk production”. Returning to the UK he took a position as a farm manager

in Wales, expanding the business while enquiring into opportunities for various forms of

partnership. Desperate to set up a large scale pasture based dairy farm of his own, but still

believing he lacked one or two skills necessary to establish the business, he went to work as an

Operations Manager in the USA where he was involved in the management of a number of

recently established 500 cow farms.

Returning to the UK in 2008 Adam engaged in networking and developing contacts, travelling

many miles to generate ideas and joint venture opportunities. Through the Wye Graze

Discussion Group he met Rich and Chris Norman who had recently been approached by a

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landlord that was looking to establish a contract farming agreement and convert a beef, sheep

and arable farm into a dairy unit. With the Normans having recently expanded their own

dairying enterprise they were unable to pursue the opportunity alone, but were willing to

enter into a Limited Liability Partnership with Adam. Following an 18-‐month negotiation and

formalisation of contracts, in 2009 the farm conversion began. Simultaneously purchasing

yearling cattle and growing them on while the farm was in conversion helped control some of

the partnerships costs, while also enabling investment in an asset that was appreciating as the

business was getting off the ground.

A contract farming agreement is employed, with the landowner paying Norman Boley LLP a

sum to lease cows plus an additional fee for labour and machinery, (although Adam makes

clear that investment in machinery has been minimal, questioning the logic behind buying a

tractor while the business is still developing when instead you could purchase 30 additional

cows,) while a further agreement regulates paying the landowner to rear replacement calves

on his land. Once all costs have been accounted for, and the partnership and landowners

respective fees have been paid, the divisible surplus is then split in favor of the contractor,

incentivising increased production efficiency. The Normans separately run an Autumn block

calving herd, which engages in machinery, labour and bull sharing with the partnership,

helping further control costs.

Utilising a joint venture has enabled Adam to be involved in developing an enterprise that he

would not have been able to establish by himself. Leveraging personal capital against other

parties, has enabled increased gearing of the business while leaving potential for greater

returns on capital. The contract farming agreement has enabled Adam’s participation and

business growth within a capital-‐intensive industry, and his successes again show the

importance of networking, and developing key practical and business management skills. On

top of this Adam reiterates the importance of investing in assets that are appreciating in value

while the business is still developing, and avoiding wasting money over capitalising the

enterprise by investing in “bells and whistles”.

Matthew Ingram

A new entrant from a non-‐farming background, Matthew was first drawn to farming though

involvement with his school farm. After completing a HND in agriculture he proceeded to

spend a year in France, studying the problems and opportunities facing new entrants over

there before returning to the UK to obtain a Diploma in Advanced Agricultural Management.

Following this he spent a couple of years working as a financial advisor, an experience which

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gave him a strong financial and sales background, but also reinforced to him that he waned to

farm.

Taking a job as a herdsman, Matthew continued to develop his existing practical skills, all the

while applying for County Council Tenancies. In hindsight, he now recognises that failing to

obtain a tenancy was one of the best things that could have happened to him as it meant that

when the opportunity arose to become a self-‐employed contract manager, he was able to jump

at the chance and was placed in a position of having control and management of a dairy herd.

After a number of years, and having developed a track record with the landowner, the landlord

approached Matthew with the offer of entering into a contract farming agreement. Having

spent many years rigorously saving and “managing personal accounts like a business” Matthew

was is a strong financial position, and in 2004, with the help of family support, was able to

purchase the cows and machinery on the farm. A 10-‐year term was agreed, and all being well

will be continued upon its completion.

Matthew’s story illustrates the importance of saving, building credibility and developing a

proven track record. While not every new entrant will have the benefit of family financial

support, it is likely that any new entrant in Matthew’s position with strong financial records,

business acumen and technical ability would be able to find a lender willing to provide start-‐up

finance. Additionally Matthew speaks highly of the Wye Graze Discussion Group of which he is

a member, the benefits of information sharing and the importance of learning from others

while new entrants seek to develop their own enterprise.

An anomaly

Charlotte and Ben Hollins

The author Colin Tudge, describes Ben and Charlotte as being “absolutely geared towards a

different model: an enlightened agriculture”.

While they may not be first generation farmers, and indeed are farming land that was farmed

by their father, they effectively found themselves in a situation similar to that of a stereotypical

new entrant when their landlord sought to sell Fordhall Farm in 2005. Given until July 2006 to

raise £800,000 to buy the farm, they established Fordhall Community Land Initiative in 2005

and proceeded to sell 7,500 £50 shares. Through hard work, determination and national press

coverage (with The Guardian and Telegraph between them reckoning they were responsible

for raising £400,000 worth of shares) they were able to raise most of the required amount, and

with the assistance of a further loan became England’s first community owned farm.

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Fordhall Farm’s current structure facilitates individual involvement in the project at a variety

of levels; from a hands-‐off shareholder to the more active involvement of volunteers. Social

events further public engagement, drawing in support for the mixed livestock farm, and the

140-‐acre site and its butchery now provide employment for 4 full-‐time staff equivalents, selling

products through a farm shop, online and at farmers markets.

Although they have been held to be an anomaly within this study, this is purely because they

could not easily be fitted into any of the groupings used for this project. However, there are

certainly aspects of their success that are replicable by other new entrants. Charlotte suggests

that “for those people thinking about starting a community project, my advice would be

communicate, communicate, communicate – as much and however you can”, and amongst

other things the farms success clearly demonstrates how ambitious and proactive young

farmers have the capacity to engage with the community, and access non-‐traditional sources of

capital.