IT in agriculture: On top of the crops

Feature

IT in agriculture: On top of the crops

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.


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This was first published in March 2003

 

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