There has sometimes been a rather patronising assumption
that the UK’s farmers are unwilling to take the latest technology
on board and are all still working out their accounts on the backs
of envelopes.
In fact, UK farmers are not lagging behind other developed
agricultural economies in their use of computers (see Market Size
box) and they remain roughly level with other sectors with
businesses of comparable sizes. This should come as no surprise
since today’s farming sector is stuffed full of bureaucratic
requirements that are often more easily dealt with onscreen and
online.
The Department for Environment, Food and Rural Affairs (Defra)
is spending significant sums developing IT systems for various
aspects of agriculture, including its Cattle Tracing System Web
site and systems to help prevent animal disease. These include a
£5m veterinary network to combat TB, the £3m British Cattle
Movement Service, and almost £16m on support systems for the new
Common Agricultural Policy.
“These days, record keeping is very important for farmers,”
comments Ursula Deighton, marketing executive at Farmplan, the UK’s
largest specialist software vendor in the agricultural sector, and
herself the owner of some 50 head of cattle.
“The key requirement is management information, particularly the
traceability of animals and crops. It is also vital to keep up with
ministry legislation.”
The requirement to track practically everything a farmer does,
from crop-spraying to hedge management, together with the
government’s strategy of encouraging diversification, means demand
has grown in this sector for a very wide range of software. “With
crops, farmers have to keep track of what they spray on and when,
and what the wind was like,” says Deighton.
“So a lot of the software we offer is for crop management, but
we also do property management software for people who have
properties they rent out and so on.”
With farmers facing decreasing profit margins, the need for
accurate and timely financial software has become particularly
relevant. “Farmers need software from which they can get a spot
picture of how they are doing at any given time,” she comments.
“That information may also be necessary for their bank managers,
accountants, consultants and so on.
“Farmers also need to make information available if they are
claiming subsidies, because there are penalties if they do not meet
specific requirements. It is no longer good enough to do the sums
on the back of a cigarette packet.”
This is particularly the case where subsidies are involved.
Government bodies have tightened up their checks on subsidy claims
following a fraud case where a farmer made false claims for
subsidies from several different ministry agencies, including
making claims for the same land under two different schemes.
For farmers’ eyes only
The ability to save time on paperwork has become more acute as a
result of the pressures on the farming industry. Many farms have
had to lay off staff, or not replace them, which is increasing the
workload on those remaining. “People are having to do this
paperwork as well as run their farms, which can be very time
consuming,” Deighton points out.
Farmplan sells its systems on the time it can save farmers in
this area, but some farmers are still resistant. “A lot of people,
surprisingly, are still doing these processes manually, even when
they have thousands of head of cattle,” says Deighton. Since each
animal has to have its own passport, which has to be signed every
time the animal is sold on through the food chain, this involves a
great deal of paperwork.
General financial and administrative software packages are, of
course, available to farmers, but Deighton says the advantage of
systems, such as the Farmplan software, is that they have been
tailored to this sector’s needs. “Our software is written by
farmers for farmers,” she states. “It has the right headings. There
are plenty of cheap general packages, but our software fits what
farmers do.”
This is a sector dominated by relatively small, specialist
suppliers, many of which, like the farmers they sell to, are also
diversifying. Worcestershire-based software firm Agriplan, for
instance, which sells livestock software, has recently developed
its Agriplan Media marketing package to help small businesses,
particularly farmers, run marketing campaigns for the relevant
parts of their operations, such as bed and breakfast and cottage
hire.
These latter types of business have driven a lot of Internet
take-up among the farming industry, according to a recent survey by
the National Farmers’ Union (see Main Drivers box). Unlike some of
farmers’ more traditional operations, these areas lend themselves
to being run over the Internet and usage has risen sharply.
Peaks and troughs
But many of the specialised software vendors have felt the pinch
over the past couple of years. HM Boot Pig Systems sells
specialised software for pig farming and recently launched ePig, an
Internet-based package for handling pigs. Fraser Hollingworth, who
runs the company, says downturns in both the computer industry and
the agricultural sector have impacted badly on his business.
“It is not very good at the moment,” he comments. “Farmers do
not have the extra money to pay for the onsite training and
installation on top of the software itself. The big players that
are left in the UK are already our customers and many of the
smaller farmers are getting out of the business.”
This is part of an ongoing stabilisation taking place across the
UK farming industry, says Hollingworth. It has already had an
impact on suppliers of specialist software. “Many of our
competitors have gone bust,” he says. “It is the survival of the
fittest. But we charge good money for our software, so we have the
resources to tide us over.”
Strategy changes
Many of the software vendors in this sector sell direct, or through
specialised agents which are familiar with the farming community.
Some vendors, however, have changed direction.
Swansea-based Logicale is a subsidiary of the Microcompass group
that until recently developed and sold its own software to
agricultural distribution companies. Two years ago, it changed that
strategy and became a Microsoft Business Solutions reseller,
selling Microsoft’s Great Plains software package.
“We have been providing software for agricultural distributors
and suppliers for 19 years,” explains Nigel Lomas, director of
Logicale. “As the company has grown into several different vertical
niche sectors, we realised we hadn’t kept in touch with our
partners in the agricultural sectors. We chose Microsoft software
because we can take off-the-shelf software and structure it to the
business.”
This is no small undertaking. Lomas says a typical
implementation, including training, can take anywhere from three to
nine months. “It’s not about changing the software,” he says. “It
is more about turning on and off specific parameters.”
One of Logicale’s largest customers is the Wynnstay Group, which
manufactures and distributes feed and fertiliser. Wynnstay is
setting up a system for 60 users, based on hardware and software
from Logicale. An average sale, says Lomas, would be a 30-user
system, costing about £150,000.
“The biggest issue for our customers is margins,” he comments.
“Our systems give them better control over their stock and
information.” This is key in an industry with many complex
negotiations and arrangements.
“A farmer might buy 100 tonnes of fertilisers, for instance,”
says Lomas. “But that contract could be over a two-year period,
with the farmer picking up a couple of tons every so often, so a
rolling contract has to be negotiated, including all the details of
where the fertiliser will be held, whether the farmer will pay rent
for storage, and so on. In many ways, it is still an old-style
business, but technology can help.”
Another Great Plains customer is Masstock Arable, which provides
distribution and consultancy services to the agricultural sector.
It purchases its software from IT services group Touchstone, mainly
to provide a standardised, integrated approach to financial
reporting across its business.
But the competition is limited as the complexities of the
agricultural sector helps keep down the competition. “We have about
two or three other competitors, but because of the diversity of the
business and the intricacies that make a difference to the
software, it is not as bad as some other sectors,” says Lomas.
New developments
As the agricultural sector continues to consolidate, the technology
requirements of farmers continue to widen. Mapping, for instance,
is a major area. Farmers have to keep clear records of areas they
have treated with crop spray, fertiliser, and so on, and GIS
mapping is seen as one way to do this efficiently.
One area in which technology is widely used is in buying and
selling, particularly for farm machinery. Specialist vendor
Farmdata runs software that enables members of machinery buying
‘rings’ to contact each other when contracts are being placed. This
can now be done via a text message to a mobile phone, using
software from Justfone, cutting down the time and cost taken to
contact members and place contracts.
www.defra.gov.uk
www.farmdata.co.uk
www.farmplan.co.uk
www.hmboot.com
www.logicale.co.uk
www.microsoft.com
www.nfu.co.uk
Market size
The number of UK farmers with Internet access has risen sharply.
A survey in February 2003 by the National Farmers’ Union showed
that 83 per cent of UK farmers are now on the Web. This represents
a rise of a third in just over a year — in November 2001,
only
62 per cent of farmers had access to the Internet.
Almost all the farmers with Internet access were using it for
information purposes, 60 per cent were using it for research and 46
per cent for banking. The amount of use for e-commerce is still
small, however, with only 15 per cent of farmers using the Net
for
purchasing and just ten per cent selling produce online. The most
popular items being sold via the Web were farm holiday cottages and
bed and breakfast accommodation, followed by plants and other
nursery stock.
The average annual value of produce or goods sold on the
Internet was £13,000 — that is a total value of about £325m. And 92
per cent of the farmers surveyed expected their Internet sales to
increase this year.
The government’s long-term strategy is to develop a competitive,
diverse and flexible agricultural industry, which must respond
better to consumer wishes, be more environmentally responsible, and
play an integral part in the wider rural economy. About £1.6bn has
been put into developing this strategy in England via a six-year
rural development programme that runs until 2006. Scotland, Wales
and Northern Ireland also have their own rural development
plans.
In 2000, a further £200m Action Plan for Farming was launched to
help farmers find ways to make their businesses more resilient and
efficient.
Source: National Farmers’ Union
Key suppliers
Specialist suppliers dominate this sector. Farmplan is the
largest specialist software vendor in the UK agricultural sector,
with more than 8,000 customers.
Other software vendors include Agridata, which sells an
automated record system for beef, dairy and sheep farmers;
Agriplan, which sells livestock software; H M Boot, which
specialises in pig systems; Cowsoft, which specialises in full
details about cows; Datag, which has programs covering farm
accounts and livestock and crop management, as well as farm
planning; Farmdata; FarmMap, which specialises in GIS mapping for
estate management; Flockdata, which specialises in software for
poultry producers; Hydro Agri Precise, whose software helps keep
track of fertiliser use; Natural Farming Software, which
specialises in systems for organic farmers; Pear Technology, which
sells systems for crop recording, contracting and digital mapping;
Promar International, which sells financial management and taxation
systems; WoodPlan, which specialises in software for timber and
forestry management.
Main drivers
There are about 300,000 farm holdings in the UK. UK farming
contributes £6.6bn a year to the UK economy and employs more than
500,000 people.
The farming industry was badly hit by the foot and mouth
disease, and herd sizes are only now beginning to return to
pre-disease levels.
One of the main drivers in implementing systems is handling red
tape. Farmers have to keep track of everything they do, from
spraying fields to moving animals.
Since the BSE and foot and mouth crises, there has also been
renewed emphasis on keeping track of all animals and their
movements. This has led to increased interest in systems as a way
of keeping mounting paperwork under control.
Farmers also need to ensure they are aware of the latest
legislation and of the opportunities for various subsidies and
grants. Information and research were two of the key areas of
Internet use highlighted by the National Farmers’ Union survey.