Farm businesses in England are under pressure to intensify production sustainably while managing costs and meeting market demands. Commodity prices and support from Common Agricultural Policy (CAP) payments are important determinants of profitability. With the United Kingdom (UK) leaving the European Union (EU), revised policy will see farming more exposed to fluctuating commodity prices and financial support from Government more focused on encouraging environmental land management. The research reported here, investigated whether business management practices of farmers influences financial performance, and how policy could be tailored to better meet the needs of farm businesses.
The results show that business planning and benchmarking had a positive, statistically significant, effect on financial performance, as do business size and knowledge acquisition, albeit to a lesser extent.
The research reported here is the most extensive examination, to date, of the impact of management practices on the financial performance of farms. Thus, it sends strong policy recommendations.
The lead author is grateful to the Edith Mary Gayton Bequest and the Agriculture and Food Investigation Team (AFIT) at the University of Reading for financial support. Technical advice and assistance from Nenia Micha, Yiorgos Gadanakis and AFIT in the use of the FBS dataset is also acknowledged. Despite this, the opinions expressed here and the conclusions reached are the sole responsibility of the authors.
Vanhuyse, F., Bailey, A. and Tranter, R. (2021), "Management practices and the financial performance of farms", Agricultural Finance Review, Vol. 81 No. 3, pp. 415-429. https://doi.org/10.1108/AFR-08-2020-0126
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