Nearly two thirds of Welsh farm businesses are focusing on surviving rather than thriving over the coming year, according to an annual survey.
For the fourth year running, professional services firm Baldwins Accountants conducted an annual survey at the 2019 Royal Welsh Agriculture Show to gauge the agriculture sector’s mood.
Out of the 100-plus businesses that took part, 58 per cent felt that Brexit will have a negative impact on their business, and as a result, 58 per cent of participants said they were not looking to expand over the coming year.
In addition to recording the highest ever level of negative responses, this year’s study also revealed that 72 per cent had no plans to raise funds.
The findings come at a time of chronic uncertainty for the UK as the nation waits to see what the consequences of a deal or indeed a no deal Brexit may look like.
The number of agricultural businesses that are optimistic about their performance has dropped by a quarter compared to the previous year, and 29 per cent now feeling pessimistic about the foreseeable future.
However, 47 per cent of those surveyed are maintaining an optimistic outlook, while 52 per cent are actively looking into how to diversify their existing land and other assets in preparation for Brexit – a 10 per cent rise on last year’s survey.
Succession planning is also becoming more relevant and important for agricultural businesses. The survey showed 74 per cent saw this as a concern, up by three per cent on the previous year.
Sarah Curzon, Partner at Baldwins, said: “Sitting tight is the main trend sweeping through Welsh agriculture as we wait to see what Brexit holds for the sector.
“A substantial number of respondents are now holding a negative view on the topic after initial optimism. This comes after countless political knockbacks and negotiations, and a Brexit deal still looking uncertain.
“There is widespread concern that a no deal Brexit will cause a great deal of harm to the wider UK economy with rising tariffs for importing and exporting.
“Until firms know what the post-Brexit playing field looks like, only then will we see a change in outlook and a desire to invest and expand.”
Rachael Ball, Associate Director at Baldwins, is also hoping the uncertainty surrounding Brexit will encourage business owners to think about succession planning.
She added: “Concerns about the future brings into sharp focus the need to think about succession planning of any given business, which is shared by the majority of Welsh agricultural firms in this survey.
“Successfully passing the farm onto the next generation or new owners is more likely to secure the farm’s future.
“Planning is important to ensure there are sufficient funds to enable the owner to retire and provide the incoming owner with a stable base from which to grow or weather the uncertain Brexit storm.”