Max Sealy (FCG WhiteAvon)

Continuing a theme of articles on buzzwords that are being used in the industry and more generally, this month I thought I would focus on the word Resilience.

Dictionary Definition of Resilience:

1/ the capacity to withstand or to recover quickly from difficulties; toughness: the remarkable resilience of so many institutions supporting individuals to overcome adversity and build resilience, e.g. “our business has shown strong resilience during these unprecedented times”

2/ the ability of a substance or object to spring back into shape; elasticity; nylon is excellent in wearability and resilience

Resilience is defined as the ability of a business to withstand difficulty, to bounce back from those difficulties and hardships, and to be robust. Resilience as a word seems to have taken over from sustainability but indicates a very different characteristic. The ability to bounce back means that the business itself must be strong enough to support its commitments through periods of, for example, low income, low yields, disease and other external pressures such as high prices, volatile input costs, etc. All of these have been experienced by agricultural businesses and non-agricultural businesses in recent times.

A lot of emphasis in agriculture is placed on diversification and we in FCG would be very supportive of diversification in our clients’ businesses. A number of our client’s businesses have diversified over the last 25 years to give them a source of income away from food production and support the owners of the business, their financial commitments and future investment plans. However, you do have to question whether a food system is truly resilient if it relies on non-food income to support those businesses.

Diversification of course itself is not always resilient and if, for example, you are renting out buildings to a business that is struggling in the general economy then that income is not necessarily the quick fix that it might seem to be. Spreading risk of course is a great way of building resilience and diversification achieves this, but so also does adopting new farming practices, investing in new farming enterprises and using the knowledge and skills that are found within the family.

A fundamental review of your assets and your skills, aptitudes, attitudes and interests in the family is a really good place to start when thinking about how your business can be made more robust for the future. It’s clear that there are very few quick fix solutions to growing different crops or livestock and a lot of these take time to change and involve working capital. A recent discussion with a non-farming audience questioned why farmers can’t find new crops to grow. For example, onions and beetroots in the Cotswolds as featured in a recent TV programme. My response was that if growing onions and beetroots in the Cotswolds was a good idea then many of the enterprising and forward-thinking farmers in the Cotswolds would have done it years ago!  It may well be now that we see business contract in size, focus on areas that actually pay and invest the surplus capital (for example from the sale of surplus machinery) into other areas that actually build robustness and financial resilience for the future.

Above all of this we need to question for how long government and food supply chain can expect agriculture to shoulder its own resilience and focus more on how our customers will eventually need to contribute towards building a more solid food supply network for the future.

If you would like to discuss this further, please contact Max Sealy at maxsealy@fcgagric.com or your local FCG office.