There are a few accountancy best practices you could implement to help you prepare for innovation in agriculture.
When the governments of the world met in Glasgow earlier
this month, agriculture was a hot topic. At COP26 – the latest United Nations
climate change conference – much of the focus was on land use, reducing global
greenhouse emissions and how the world can develop more sustainable food
In short – much of the discussion, debate and promises centered around Innovation in Agriculture.
Why focus on Innovation in Agriculture?
As the Climate Shot statement for COP26 says:
TO SOLVE OUR CLIMATE CRISIS AND PROTECT NATURE, WE MUST
TRANSFORM AND ACCELERATE INNOVATION IN AGRICULTURE.
Climate change is bringing major challenges to food systems
all around the world. It’s destroying resources and some agricultural practices
are exacerbating the problems. Because agriculture is an essential global need,
a massive part of our entire ecosystem, it has to be a big focus in any efforts
to protect nature and support the planet.
Environment secretary George Eustice said:
“We need to put people, nature and climate at the core of
our food systems. There needs to be a fair and just transition that protects
the livelihoods and food security of millions of people worldwide – with
farmers, indigenous people and local communities playing a central role in
That much is clear. Agriculture is of huge importance and
there needs to be as much innovation as possible to secure all our futures.
But what does that mean in practice for UK farmers and their businesses?
What changes does that mean?
Right now, we don’t actually know what kind of impact COP26
– and the announcements made there – will have on British farmers.
Much of the agreements made at COP26 are very top level –
generic promises to work together to make changes in the near future.
For example, 45 nations have agreed to “pledge urgent
action and investment to protect nature and shift to more sustainable ways of
farming.” We don’t know what that actually means in practice, on the farm.
Those 45 national governments, led by the UK, have joined
both the Policy Action Agenda and the Global Action Agenda on Innovation in
Agriculture. Some of the changes promised by these agendas include:
Reducing deforestation and actively re-foresting
Lower-carbon food systems
A reduction in water consumption in the food
Less chemicals used
Improved soil quality
Increased UK funding of £38.5 million has been announced for
CGIAR (the Consultative Group for International Agricultural Research) which
will focus on:
Climate-resilient crops and more nutritious
New livestock varieties, diagnostics and
Better tools for risk management
Help for poor farmers to use new technology
More productive, sustainable agricultural
£65 million has also been allocated to a Just Rural Transition support programme which will help farmers have their voices heard in the policy-making process and encourage them to try out new technologies, pilot programmes and innovative approaches.
How will it affect me?
There are currently no specific details on any of the above
announcements, but the UK government and all other major parties – both
governments and organisations – have made clear that change is coming.
As George Eustice says:
“The UK government is leading the way through our new
agricultural system in England, which will incentivise farmers to farm more sustainably,
create space for nature on their land and reduce carbon emissions.”
That sounds like there will definitely be developments that
affect British farmers and how their land is managed. Changes to business
operations and livelihoods.
We might not know how those changes will affect you yet, but there are a few accountancy best practices you could implement to help you prepare. They include:
To prepare for the future, you need a plan. Now is always
the best time to start planning and get all your financial affairs in order if
you haven’t done so already.
Putting a strategic plan in place will help you see where your strengths and weaknesses lie. You’ll see where you need to focus your efforts, where you need to innovate and how you can prepare your farm business for a secure, successful future – whatever changes might come your way.
Good strategic planning will also help you get your cashflow
in order. A good healthy cashflow is a must have for any strong successful
business, especially one that would like to take advantage of new technologies,
systems and approaches.
If you want to innovate on your farm, then chances are you’ll have to make some investments. A good cashflow, with money set aside for such investments, will help make sure you can buy the latest gadgets or the newest products to help your farm.
3. Research & Development tax credits
Thirdly, the UK government has already been helping
businesses who are innovating in agriculture, with research & development
If you can show you’ve invested in a new product or process,
you could be eligible for either a cash pay-out or a reduction in your
corporation tax, depending on your circumstances. In some cases, you could
claim up to 33% of your costs back!
If you want to find out more about R&D tax credits,
capitalise on innovation in agriculture now or make sure your business is
prepared for any changes from COP26, then get in touch with us today.
As climate change continues to impact farmers livelihoods,
we want to help you make your business as sustainable as possible.