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Self-assessment
Increasing self assessment of their own economic performance by farm businesses – through benchmarking against others, discussion groups and better knowledge of business and risk management techniques.
By using benchmarking tools, farmers can compare their financial performance to other similar types of farm business. Although any increase from the very low level of benchmarking in farming (an estimated 76% farms do no benchmarking) would not, in itself, lead directly to an improvement in productivity or resilience, it would help to highlight where improvements can be made to many businesses. For example by making better use of resources or taking more effective approaches to risk management.
While agreeing that benchmarking can be an excellent thing, it should be remembered that it isn’t entirely without its’ down side. I have been part of several schemes and I have noted over the years that a ‘competitive’ element can creep in, so that certain participants creep up the league table.
Also the usefulness of the benchmarking is limited by the accuracy of the figures used. If a scheme is to be set up, the parameters chosen should be easily verified and simple to collect.
Finally it should be remembered that by introducing benchmarking you are imposing an extra workload onto someone who is already working far too many hours. Agriculture has shed labour due to low profitability, and at the same time bureaucracy has imposed an even greater burden. The extra work benchmarking brings will normally be done at the end of the day, after the person has already done a full days work. It should be seriously questioned whether imposing even more paperwork on these people is good of their physical and psychological health.
I would suggest that a lot of people in agriculture would improve their risk management if they had more time to think and discuss things, and spent less time chasing their tails frantically trying to catch up.
Jim
The AIDA model (awareness / interest / decision / action) is used regularly in marketing communications when considering the decision making process. With regard to prompting change in agriculture, the industry needs to take action and benchmarking has a clear role to play in creating awareness of relative competitiveness of farmers and helping signpost the future options available to them. This is not a challenge of data availability (despite what SFFS indicators may say), and the information available for benchmarking already exists whether it is from publications such as EBLEX Business Pointers or Defra’s Farm Business Survey. However, more consideration must be given to uptake by farmers and the formats presented. How easy is it for farmers to take existing information and compare it with their own key business metrics? Is there a straightforward process for identifying key differences between farms? Does the process generate appropriate actions? Providing the information is only part of the process and ultimately this requires some understanding of where the disconnect exists between information provision and on-farm action occurs.
Although the document talks of benchmarking being at a farm business level, an element of international benchmarking would be of benefit to the sector. It would be particularly relevant given the potential to evaluate our competitiveness and productivity against competitors. This would also be an essential tool for flagging up the gaps between England and other member states in terms of implementation of CAP, relevant regulation and fiscal policy, which ultimately shape industry competitiveness and resilience. Also, benchmarking could be expanded beyond the farm level, acknowledging the wider supply chain and including comparative assessments of our food manufacturing and processing sectors.