FOCUSSING on improving farm management through marginal gains, plus a willingness to invest and diversify, will be key to Scottish farms and estates preparing themselves for Brexit, according to top land agent Andrew Aitchison.

Mr Aitchison, who is head of land management for Strutt and Parker in Scotland, said that rural businesses need to embrace change if they are to thrive in the future – and now is the time for them to act.

“That will mean understanding new areas of opportunity, such as natural capital, which has the potential to create valuable new revenue streams for some," advised Mr Aitchison. "Investing in natural capital will involve landowners entering into long-term contracts where they are paid to produce environmental outcomes, such as improved water quality or a reduced flood risk.

“We are also on the cusp of a new agricultural revolution, driven by technological advances in which progressive farmers can invest to become more profitable," he said. “Smaller farms, which may be under-capitalised and may not have that opportunity to invest, need to think about what they are going to do. Joint ventures and new collaborative arrangements will be the key to survival for some.”

But while estates should be thinking about how they might diversify to fill the void left by the anticipated fall in agricultural income, Mr Aitchison stressed that they should not ignore the basics of good business management and investment in the core estate.

“This could mean investing in residential properties to ensure that they can thrive in a changing private rental market,” he suggested. “Rural landlords must adapt and make their rentals competitive with those in urban areas. Reviewing an estate, understanding its position in the local economy and developing a strategy around that will be vital. The availability of capital has never been better, so there’s a real opportunity to reinvest, too. The time for action is now.”

Strutt and Parker's head of farming in Scotland, Mary Munro, added that although the industry could only speculate on what agricultural and environmental policy will look like post-Brexit, it was highly unlikely that farmers would receive similar direct payments to now.

“Perhaps the key question is whether the government will continue to protect farmers as food producers or liberalise a sector which is perceived by many as inefficient,” said Ms Munro.

“We don’t know yet if the winds of change will be a gentle breeze or a hurricane, but we know change is coming. I think it is clear that trade deals will have a much bigger influence on farming fortunes than direct aid. This means that markets may be more difficult, or more volatile, but there will be opportunities as well as threats.

“Farmers need to be prepared for change and, crucially, that means getting their businesses into a secure financial position. Farmers need to be efficient at what they do, grasp opportunities to increase revenue (including non-farming income) and be light on their feet in many ways such as adopting new technology, tackling succession, and selling into new markets.”