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The role of emotion in health communication
The role of emotion in health communication

Posts Tagged ‘Farming’

Dairy farming: private equity’s next cash cow?

You only need start an episode of Clarkson’s Farm and you’ll soon pick up some of the immense challenges facing farmers across rural Britain today – longstanding issues with supply, distribution and pricing have been propelled by the pandemic, complicated by Brexit, accelerated by the war in Ukraine, and intensified by the cost-of-living crisis. Nevertheless, there are significant and exciting opportunities for growth which make UK agriculture an attractive prospect for investors.

According to the 2022 Agrifoodtech Investor Report, $57.1 billion was invested in agrifoodtech companies in 2021, an increase of 85% on the previous year. 2021 also saw the UK’s highest ever deal flow with UK-based deals reaching £1.3 billion in value, the highest since data has been collected and up from £1.1 billion of investment in 2020. The UK sits 5th in the global ranking of deals by country, just behind Germany, India, China and the USA, though the UK government’s ambition is to be a world leader in this space. While investment in upstream technologies like on-farm tech, tools and services remains high at around $20m, there is a shift beginning to take place with interest now moving towards farm management software, indoor farming, ag-biotech (such as gene editing), and e-grocery. Going forward, agri-tech innovations will be crucial in helping the sector manage labour shortages, energy prices and food security. Private equity investment will be crucial in helping the sector get there.

Those close to the industry, both on the farms and holding the purse strings, are particularly excited about the dairy industry. While this farming discipline is not without challenges of its own (fluctuating prices, rising costs, environmental footprint and bovine TB to name but a few), the opportunities for growth are vast. Advances in genomics and precision livestock farming have underpinned recent productivity and efficiency gains across the dairy sector, supporting the transition towards net zero. For example, the application of precision livestock farming using animal behaviour monitoring via diagnostics and sensors have helped provide valuable data insights into the economic and welfare challenges affecting dairy farmers such as lameness, mastitis, fertility and wellbeing. Precision livestock farming systems are being trialed across farms in the UK, US and China and access to rapidly expanding markets in Asia is being supported by the UK government.

The demand for British dairy products remains high, and not just in the UK. The UK exports almost £2 billion of dairy products to more than 135 countries across Europe, North America, Asia and the Middle East. As a result, the UK dairy sector is well placed to capitalise on the government’s ‘Made in the UK, Sold to the World’ campaign as UK farmers are some of the most environmentally progressive and efficient in the world. One study assessed the dairy consumption of 90 dairy-importing countries with a population of nearly 5 billion. It found that between 2011 and 2019, dairy consumption in those countries increased from 258 billion kg to 304 billion kg – an increase broadly equivalent to two years’ worth of the total milk production volume of New Zealand. Countries such as these are expected to see an increase in demand over the next decade, currently projected at 5.6% per year from 2019 to 2025. It is unlikely that they will be able to meet these demands locally.

Alongside this, recent reports also suggest that the EU dairy industry is in decline. Production is expected to fall by as much as 6.3% in Europe over the next 6 years largely because of the implementation of the EU’s Green Deal and resulting updates to the Common Agricultural Policy. This represents a significant opportunity for UK dairy farmers, with dairy export markets typically more profitable than domestic ones. As a result, many dairy processors are undertaking investment to allow them to access growth markets overseas.

In 2022 the National Farmers’ Union expended considerable effort pushing forward a dairy export strategy with the ambition of doubling UK dairy exports in the next 10 years. Working closely with the Department for Business and Trade, the NFU continues to see this as a priority for 2023. Over the coming year we can expect the sector to push for trade and regulatory policy that supports the industry to compete at a global level. It will also court investors to inject vital funds into dairy businesses to maximise the industry’s innovation and resilience; the investors who do, look set for a good yield.

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Brave new world: Farming solar

Sitting in the audience at a recent agri-tech conference, listening intently to a panel of farmers discussing the future of farming, I was struck by how much of the conversation was centered not on harvest, yields or livestock, but instead on photovoltaic power stations i.e., solar farms.

The Fenland farmers, sitting on acres of expansive flat fields, boasted that photovoltaics left them without hefty energy bills in a cost-of-living crisis. The vertical farmers, growing herbs and salads in soilless conditions inside vast warehouses, insisted that photovoltaics reduce the carbon footprint of their otherwise eye-wateringly energy-intensive manifestation of farming. The eco farmers, down-sizing their productions to reduce the intensity with which they farm their land, claimed that diversifying is more sustainable for them and for the environment. “I truly believe,” one farmer told the conference, “that solar is the future of farming.”

There are clearly some advantages to solar farming agricultural land. It can provide, or contribute to, the farm’s energy usage, which is not to be sniffed at during an energy crisis. Any surplus energy generated can be sold back to the grid, generating crucial revenue for an industry where fewer than half of all farmers make any profit. Solar panels generate consistent yields and can be a more reliable source of income than crops or horticulture, which are increasingly affected by the changing climate and volatile weather conditions. And there is truth to the sustainability argument that reducing intensive cultivation increases future performance.

Farmers argue that they can also generate income by using the land simultaneously, commonly referred to as ‘agrivoltaics’. Sheep can graze underneath solar panels and free-range chickens can roam. Less sun hungry crops can be planted below and among raised photovoltaic panels and some fruit and vegetables can be grown. The lanes in between rows of panels can be used to increase biodiversity by planting pollinator habitat and native vegetation, providing ecosystem services. It sounds idyllic.

I found myself wondering if, given this proclamation for the future, any of them were concerned about the recent appointment of Liz Truss as Prime Minister. The answer was no. But perhaps they should be.

The expansion of solar power emerged as a campaign issue for the final two candidates in the Conservative Party leadership race. Both Liz Truss and Rishi Sunak warned of solar panels filling the UK’s highest quality farmland, joining a chorus of fellow Conservative MPs who have recently described solar projects as perils for rural communities and food supply. Truss told one hustings event “Our fields should be filled [with] our fantastic produce…[they] shouldn’t be full of solar panels, and I will change the rules.”

This idea is not new. For months, backbench Conservative MPs have been speaking out against new ground-mounted solar power projects, often citing local campaigns against projects in their constituencies. Among them is Matt Hancock, a former energy minister, who stood with local campaigners to protest a 2,500-acre solar farm in his constituency.

The government’s energy security strategy, published in April, contained various measures to deal with the UK’s energy crisis and achieve its Net-Zero targets. This included a pledge to increase solar power capacity up to five times by 2035. However, it also included language to appease those sceptical about ground-mounted solar, pledging to “consult on amending planning rules to strengthen policy in favour of development on non-protected land, while ensuring communities continue to have a say and environmental protections remain in place.”

Politics is not the only challenge for farmers to be aware of. Obtaining a sensible cost and timeframe for the connection of a newly constructed solar farm to the National Grid can derail a project. Some estimates place the earliest connection availability for new projects at 2028-2030. Reports of solar farms sitting unused because there isn’t capacity in the grid to transmit the electricity are not uncommon, according to the National Famers’ Union. Where capacity exists, the costs can be prohibitive.

Solar photovoltaics offer a versatile and scalable solution that warrants serious thought as part of the agriculture industry’s ambitions to reach Net Zero. However, solar farms are being refused planning permission in Great Britain at the highest rate in five years and proposals that would have cut £100m off annual electricity bills have been turned down in the past 18 months. Of the 27 proposals declined between 2019 and 2022, 19 are in Conservative constituencies, which are typically in the rural shires of the country. So clearly, the politics matters, and farmers looking to enter the brave new world of solar farming would be wise to pay attention.

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