FARMERS SHOULD use the New Year as an opportunity to re-evaluate their businesses, and get themselves into the strongest possible position ahead of Brexit and the 2020 CAP reform.

“The past year has been extremely tough, particularly for farmers in the dairy sector,” said Dan Knight of farm accountant Old Mill. “But I’ve been encouraged by how many families are using this time to take a hard look at their personal and business strategies.

"Some businesses have found new cost efficiencies, others have drawn up succession plans, while still more have either committed to growth or refocused efforts on alternative enterprises."

With all commodity prices now looking more optimistic, the New Year was a perfect time to examine the direction of any farming business, said Mr Knight – but as prices improved, it was important not to allow inefficiencies to creep back in: “With CAP reform looming in 2020, as well as the uncertainty of Brexit, we don’t know what lies ahead. Right now, the weak Pound means British agriculture could enjoy a buoyant couple of years, so it’s important to make and keep as much money as possible, in case another downturn – or loss of government support – sits on the horizon.”

In the short-term, Mr Knight suggested that farmers should consider how to reduce their tax liabilities ahead of the 2017 tax year-end. They should then sit down and examine their longer-term strategy, to ensure the business is in the strongest position going forward.

“To begin with it’s essential to have a frank conversation with everyone who has an interest in the business,” he said. “Involve future generations and ensure every party is clear about their personal and business objectives; that may not be to maximise turnover, but to earn enough to have the lifestyle of choice.”

When it comes to succession planning, he said that families often failed to recognise the distinction between being equal and fair: “Trying to split assets equally between siblings may not be fair or good for the business. If one child gets a house and an income stream, while another gets the farm, that may be a fair outcome which enables the business to continue.”

Every business will find a different way to take advantage of emerging opportunities, he said: “But by having a conversation about their strategic direction families will feel more confident about the future. It’s an exciting time to move ahead.”