PROFITS NO MATCH FOR HOURS PUT IN
PROFITS NO MATCH FOR HOURS PUT IN
Farming has always been a labour intensive industry. But just how much time is
invested is rarely assessed. A new survey provides some interesting pointers
MOST farmers would say they work too hard for the returns they currently achieve from farming. Now a new study shows just how right they are.
On average farmers are working a 70 hour week and some are doing even more, according to initial findings from the study by Deloitte & Touches Food & Agriculture Group and the Royal Agricultural Society of England.
The Cost of Time is the latest in a series of studies combining a survey of RASE members with accountancy input from Deloitte & Touche.
"There is a lot of talk of farms increasing in size with fewer people involved in running them, so we felt it would be timely to get an understanding of how farmers are spending their time," explains Micky Griffith, development manager at the RASE.
"In addition, there is continual complaint of ever increasing form filling and red tape. Again we wanted to quantify that."
The survey attracted 200 responses, which detailed how farmers and managers spent their time. This took account of practical farming and management, managing non-farming businesses and personal time.
The average working week was around 70 hours, with some exceeding 90 hours.
"The comments reflected how many farmers feel under tremendous time pressure," says Mr Griffith. "There is concern among farmers that they are constantly firefighting, going from one problem to the next."
Overall farmers on average commit 70% of their week to business commitments. Analysis shows practical farming accounts for no more than 42% of the average farmers week. Paperwork and administration take another 19%.
"Many farmers acknowledge that they ought to be spending a considerable amount of time looking at the future of their businesses in the face of squeezed profits and depressed markets," says Sarah Anderson of Deloitte & Touche.
"On average 16% of the week was spent on this. But many farmers commented that they would like to devote more time to cost analysis and developing longer term strategies."
For the coming year, Deloitte & Touche has forecast that on average net farm incomes will be negative. Aside from planning, there is a need to focus on achieving the best prices for produce and the best deals on inputs, it notes.
Yet the Cost of Time survey shows the average farmer spends just 3% of his time on buying and the same on selling.
"In part this may be a reflection of the growing use of buying groups and marketing organisations," says Mrs Anderson.
The challenges of operating larger businesses on tighter margins will demand good up-to-date management skills. However, the survey showed that farmers give this important, but non-urgent task low priority, particularly outside the winter season. Overall less than 6% of time was spent on personal development.
However, most of the farmers contacted put a much higher priority on developing skills in their staff than in themselves.
Another headline fact to emerge from the study is the increasing involvement away from farming. Managing diversification, property and investments is now taking 10% of the average week.
"This correlates with the Deloitte & Touche Farm Results, which show an increasing amount of revenue being generated from non-farming activity," says Mrs Anderson.
Sarah Anderson of Deloitte & Touche – Cambridge.
Cost of Time study
The full Cost of Time study, to be published in mid-June, will look not only at how farmers spend their time, but what remuneration they receive for it.
Time pressures in modern farming are intense. But are you spending too much time on day-to-day issues and too little planning the future? A new RASE/Deloitte & Touche study suggests that for many that may be the case.