Groundswell preview
Benchmarking group shows regenerative
farming works • Take action to ease financial strain • Loss of payments poses challenge • Yield is king approach doesn’t work
tems and benchmarking your business can help to manage the change. Farming is embarking on a period
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of huge change that most growers and livestock producers have never expe- rienced, says farm consultant Gary Markham, who helped initiate the Groundswell Benchmarking Group. This will see the industry move
away from the comfort of area pay- ments – which make up around 84% of income on many arable farms. In- stead, farms will have to apply for spe- cific funding for environmental work. “This will inevitably put farming business in financial strain as there will be a funding gap over the forth- coming few years,” says Mr Markham. “Farming has become very capital in- tensive.”
Inevitable change Mr Markham, of the Land Family Busi- ness farm consultancy group, will ex- plain his thinking further at Ground- swell 2021. “Change is inevitable – but managing the change is where the dif- ficulty comes,” he says.
The economic production value of arable land is about £4,000 per acre and the additional £4-6,000 has no bearing on production capacity. Add- ed to this is the increase in the capi- tal cost of machinery over the past few years to over £300 per acre. Many farmers have quite correct-
ly attempted to expand as a means of dealing with these pressures, says Mr Markham. But this has normally meant tendering for contract farming agreements and losing about £40-60 per acre on the extra land.
This results in many arable farms becoming increasingly unviable as businesses. The margin from arable farming before direct payments and in- come from other enterprises has been minimal over the past two years. “One of the best tools to monitor the change and provide achievable targets
64 ANGLIA FARMER • JUNE 2021
egenerative agriculture can achieve similar financial re- sults to traditional arable sys-
is to benchmark against farming busi- nesses that have already made these changes,” says Mr Markham, who set up the Groundswell Benchmarking Group.
The group has been benchmark- ing a number of regenerative agricul- ture farming businesses for the 2017 to 2020 harvests – to identify if regener- ative agricultural production systems can be financially viable. Key findings for the performance of regenerative systems include: • Average output 25% lower • Variable costs 24% lower • Gross margin 28% lower • Labour and machinery costs which are 30% lower
This results in an average margin very similar for both systems of pro- duction. But the range of results with- in the group is wide with the top per- formers achieving results well above conventional top 25% group. In addition to margins, there are
savings in working capital of around £148 per acre which can have a large impact on a farming business. Lack of profitability in arable farms is mainly driven by high machinery costs and in particular depreciation which represents the capital per acre. Mr Markham has therefore developed a key indicator of machinery capital per tonne. The average machinery cost among the Groundswell group of regenera- tive farmers is £74 per tonne of wheat. This compares with an average cost of about £91/t for arable farmers employ- ing a conventional production system. “The difference has been around £20 to £30 per tonne over the past four harvests.” says Mr Markham, who says it shows that the traditional ‘yield is king’ philosophy does not work. It also shows that expanding the area farmed is not feasible by using tra- ditional contract farming structures he adds. Furthermore, Mr Markham says benchmarking data proves that there is a different approach that is economically viable.
Traditional contracting agreements will be barely viable without basic payments, says Gary Markham
Five principles of regenerative agriculture
1. Don’t disturb the soil Soil supports a complex network of worm-holes, fungal hyphae and a labyrinth of microscopic air pockets surrounded by aggregates of soil particles. Disturbing this, by ploughing or heavy doses of fertiliser or sprays, will set the system back.
2. Keep soil surface covered The impact of rain drops or burning rays of sun or frost can all harm the soil. A duvet of growing crops, or stubble residues, will protect it.
3. Keep living roots in the soil In an arable rotation there will be times when this is hard to do but living roots in the soil are vital for feeding the bacteria and fungi that provide food for the protozoa, arthropods and higher creatures further up the chain.
4. Grow diverse range of crops Ideally at the same time, like in a meadow. Monocultures do not happen in nature and soil thrives on variety. Companion cropping (two crops are grown at once and separated after harvest) can be successful. Cover cropping – growing a crop which is not taken to harvest but helps protect and feed the soil – will also have the happy effect of capturing sunlight and feeding that energy to the subterranean world, at a time when traditionally the land would have been bare.
5. Bring back grazing animals This is more than a nod to the permanent pasture analogy, it allows arable farmers to rest their land for one, two or more years and then graze multispecies leys – great in themselves for feeding the soil and for mob-grazed livestock.
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