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Agriculture trends and the future of farming


As the world emerges from the Covid-19 pandemic, what is the direction of travel for the agricultural sector?  

With the first half of 2021 nearly behind us, the UK economy is making tentative steps towards economic recovery. Making post-pandemic plans might feel daunting during this period of uncertainty, however this period of transition also comes with an array of new opportunities for the farming industry.  

A recent survey we commissioned showed that SMEs within the farming industry are confident about bouncing back quicker than any other sector. The survey analysed sentiment about post-Covid recovery and found that, of the SMEs that participated in the survey, the agriculture industry holds the most optimism, with 81% of business owners believing they will be stronger than before the pandemic.  

We analysed some of the biggest trends and opportunities helping to power the industry forward. 

1. New digital and green ventures

There’s been a flurry of innovation in the digital space in recent years, with a focus on improving efficiencies, reducing emissions, and generally creating more sustainable processes.  

This seems likely to pick up pace in the equipment manufacturing space over the next decade as the industry continues to move towards greener solutions.  From autonomous equipment, such as robo-tractors, to biofuel crops and livestock technology, the industry is awash with digital innovation.

2. Demand for used equipment and land

Like many industries in the wake of the pandemic and Brexit, the agricultural sector is currently experiencing new equipment supply issues. This is due to a worldwide shortage of equipment components, which is creating long lead times in manufacturing, particularly for heavy equipment. This is driving the price of used equipment upwards, putting farmers who are currently looking at refinancing options in good stead. 

This trend has been accompanied by a massive increase in food production – manufacturers have large order books but can’t meet demand. This has in turn led to increased demand for land, as farmers seek to expand resources and increase production.  

3. UK produce boom

The increased demand for farming produce is due to a number of factors. Firstly, the pandemic created global supply issues and impacted the import of farming produce, meaning the country became more reliant on the UK farming industry to keep supermarket shelves stocked with fresh produce. Brexit also contributed to this trend by driving up the costs of imports, with products also facing considerable delays getting into the country.

There has also been an increased focus on provenance in recent years, as consumers pay closer attention to the carbon footprint of the food they eat and the ‘farm to plate’ journey. This is fuelling the demand for local produce.

4. Diversification opportunities

Farmers aren’t strangers to diversifying their revenue streams and we are seeing more creative and innovative examples of this across the industry. Many are diversifying their product range – for example dairy farmers will venture into producing butters, ice creams and other dairy products aside from only selling milk.  

The pandemic has also boosted the UK ‘staycation’ market as restrictions around international travel continue. Some farmers are tapping into this by converting unused barns into luxury accommodation, which they can rent out at a premium. Others are also finding ways to become more self-sufficient, investing into energy solutions that allow them to generate the electricity to power their own farms.  

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551