How can you prepare your farm for the post-COVID future?

Three actions you can take to prepare for the new reality

Over the last decade, Canada’s agriculture industry has navigated changing consumer behaviours, adverse weather, globalization and trade challenges, digital innovation, and a shift in workforce demographics and labour supply. These forces of change have already been reshaping the industry and the conversations around it.

In our report, Farmer 4.0: How the Coming Skills Revolution can Transform Agriculture, RBC highlighted that the agriculture sector today has evolved from its traditional function of physical labour to a highly industrialized and digitized industry requiring broader skills in digital and data analytics, economics, business acumen and environmental studies. In the last few years, we’ve started seeing how advanced technologies can transform farm operations, their integration within the food and agri-business supply chain and connectivity to global markets.

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The winds of change have already been in motion. The post-COVID reality will only expedite this change in our industry, education system, labour market and governments. Anticipating the agriculture sector of the future will require us to evolve the way we produce food, invest in talent, and use technologies to make our agri-supply chain stronger, smarter and more sustainable.

To prepare for this future, there are three things farmers can do.

Plan for the best — and the worst. As farms become more complex in an uncertain post-COVID world, having a clear business strategy and contingency plans will be critical to adapt your operations quickly. This should be a living document that outlines where you are, where you want to go and how you plan to get there.

A good starting point is a review of your financial statements. Gather a clear picture of your costs to assess them against your goals and prioritize where changes need to be made. Map out a living cash flow plan and include best, realistic and worst-case scenarios. While certain macro-challenges are out of your control, you can still plan ahead to avoid surprises and minimize your losses. How would the scenario of a diseased crop or livestock, or a particularly dry or wet season impact your production and cash flow? If a sudden trade war with your largest market is prolonged, how might that impact your storage and supply chain costs and losses?

Scenario projections will enable you to create more proactive contingency plans. They may not be perfect, but you’ll be better prepared to pivot quickly and sustain your operations.

Have early and regular succession conversations. According to our report, nearly 110,000 farmers are expected to retire in the coming decade. For many farms, ensuring they have the skilled talent to replace retiring workers and safeguard business continuity is one of the top issues. If you’re a farm operator facing this issue, consider having early and regular conversations about succession planning. Just because you’re ready to pass the baton, doesn’t always mean your successors feel prepared to accept. Learn about their aspirations and concerns and support educational opportunities in non-traditional disciplines. You can also explore professional mentorship opportunities to offer personally, or through industry associations and professionals so they can become more resilient leaders.

Don’t go it alone. As the world continues to change at lightning pace, farmers are faced with more complex challenges than before. When facing these challenges, don’t hesitate to turn to your financial advisor, lawyer, mentor or others within your professional network for advice. Lean into the entrepreneurship, technology and start-up community; sometimes it helps to get an “outsider’s perspective” to spark new ideas and opportunities. As the agriculture sector evolves, collaboration will become the most beneficial and in-demand skill of all.

Ryan Riese is the national director, agriculture, for RBC.

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