A co-author of the Oxford Farming Conference’s new research report on entrepreneurship in British farming told Agri Investor that investment from private equity in agriculture could help farming businesses be more entrepreneurial.
The report Farming Entrepreneurs: Born or Bred? says the importance of entrepreneurship in agriculture because it is “a commodity industry with multiple producers of homogenous goods. Buyers therefore purchase on price. In this business model, margins are inevitably tight and so volume has to be high and costs ruthlessly low.”
Andersons Centre partner and research economist Graham Redman, who co-authored the report alongside Cranfield University’s Muhammad Azam Roomi, said that although this paper did not specifically analyse how entrepreneurs could benefit from private equity: “finding an idea and executing it is difficult, and you often need more than one person to have an idea and get it off the ground. Very large corporate businesses also run the risk of being overly bureaucratic if they are not careful. There is probably a sweet spot somewhere in the middle,” he said, adding this could be a private equity investment intended to help farmers grow their businesses by bringing in new expertise and financial funding, or something similar.
Farming Entrepreneurs: Born or Bred? will be presented at the Oxford Farming Conference on Wednesday. The paper includes tips and case studies aimed at anyone involved in agricultural businesses, explaining how farmers can be more entrepreneurial and arguing that more agriculturalists in UK agribusiness need the drive to feed off and create change.
In a world where agriculture is becoming an increasingly competitive industry, the paper says that farming is less entrepreneurial than many other industries in the UK. It describes entrepreneurial agribusinesses willing to test new ideas and create opportunities for themselves as “more profitable”.
The report identifies how entrepreneurs take carefully considered risks and find new ideas within and outside their current businesses. California’s Prather Ranch, for example, diversified its market by selling bovine pituitary glands and bones to the medical and pharmaceutical industry on top of its meat sales.
Geoff Sayers, one of the top examples of successful entrepreneurship in the report, is an ex-City global financier. He organised his business through contract farming and share farming agreements, and now owns five organic dairy farms as well as the Well Hung Meat Company through his Carswell Group.
“Geoff shows how an individual person can manage several poultry farms with an analyst from one location. It shows how you can grow a business by hiring a good analyst, as well as using a good system and technology. It is a remarkable achievement,” said Redman.