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 sources.

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 these plans.”

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 dedicated areas
  • Lower-carbon food systems
  • A reduction in water consumption in the food chain
  • Less chemicals used
  • Less waste
  • 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 varieties
  • New livestock varieties, diagnostics and management practices
  • Better tools for risk management
  • Help for poor farmers to use new technology
  • More productive, sustainable agricultural practices

£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:

  1. Strategic planning

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.

2. Cashflow

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 tax credits.

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.

Contact us today for a friendly chat and to learn more.

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