There have been significant advancements in technology within the farming industry in the past decade. The aims of these technological advances have typically been to improve productivity and profitability of the farming process.
Recent press articles have forecasted that there will be a lack of food for the world by 2050, based on current population trends and farming techniques. There are a number of business stresses in the farming industry. Some of these include the long term effect of Brexit, the changing of market prices and generally dealing with the day to day management of farming. These stresses increase the demands on farming for improvements, evolving processes and potentially higher productivity and profitability.
Such improvements may include detailed yield analysis or soil sampling technology, with further examples below being:
- To generate yield maps from satellite images. These are used to improve soil fertilisation and improve quality to reduce crop stress. The use of resolution technology is particularly useful for larger scale production and can be applied with incredible detail to a whole field, to soil readings and even to a particular plant.
- Auto steer technology on farm equipment and tractors. The benefits of using precision technology is to reduce overlapping of soil that has been fertilised, or in the distribution of seeds. Other efficiencies include reduction in running costs, wear and tear of farm equipment and maximising productivity. The cumulative effect of reducing fertilisation overlaps across a field may add up significant savings, some estimates include savings of thousands of pound a year.
- Robotics that will care for plants and treat infections. The application of robots will lead to increased monitoring and time efficiencies. There are also advancements in the application of treatments to infected plants by treating only the infected areas of a plant rather than the whole plant.
- Cows will “text” you. The health and yield levels of dairy cows can be automatically monitored, providing up to date data at all times.
If you are considering making an investment or have recently committed to a spend, there are a number of considerations in addition to the obvious operational pros and cons.
The costs of investment in plant and machinery may attract tax reliefs for the business. HMRC have specific rules on these types of tax reliefs and when they may be claimed. The nature of the expense and commitment date are important considerations before deciding on buying new technology. Examples of tax relief include capital allowances on equipment and research and development credits in relation to the introduction of technology.
In addition, the rate of return is a key factor to the business The upfront investment required and the short and long term financial impacts on profitability and cash flow is crucial. Business plans and forecasting may assist in making these key business decisions to ensure the required funding is secured and the desired outcomes are targeted and monitored.
If you require any assistance or wish to discuss any of these points we would be happy to help.