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The President’s Report

Mark Ormond

The past twelve months have been dominated by talk of Brexit and the negotiations which will lead us to it. It is clear that debate will continue at least until 29th March 2019 when the UK is due to formally leave the EU. Whilst we all worry about the impact that Brexit will have on our businesses, to date very little has changed in our industry. Farmers are still farming, grass is still growing, and the public are still spending. Let’s hope this continues throughout 2018 and beyond.

 

The Brexit referendum demonstrated a clear divide in the opinions of our nation. I am sure members’ views are also divided. Whether we support or oppose Brexit, we all recognise Britain’s exit from the EU will impact our businesses in some way. Will it be a hard or a soft Brexit, and what does that mean for the UK economy? How will labour supply be affected? What will be the impact on terms of trade? It is clear that we won’t know the answers to these, or other, questions until much closer to 29th March 2019. That makes business planning very difficult.

As AEA members, we can rely on the resources of the association to support us through this period of uncertainty. The AgriBrexit Coalition, of which the AEA is a founding member, has a stated purpose “to inform and influence UK Governments in order to achieve a positive outcome to negotiations for UK Agriculture as well as the EU and the wider world”. The regular Brexit Briefing being published by the AEA economics department ensures we have the latest information regarding the Brexit negotiations, and thoughts on how they might impact our industry. These activities are critical to ensure our interests are protected, and to help us prepare our businesses for continued success post Brexit.

Moving away from Brexit, readers might know that the AEA Presidency alternates between the Farm Equipment and Outdoor Power Equipment Councils. I as elected from the Farm Equipment side, and have been honoured to have served as President of our association during the last year.

My sector of the industry experienced a positive year in 2017. Combine retails were at a similar level to 2016 but tractor registrations increased by 13%. December figures were slightly inflated but preregistrations of Mother Regulation non-compliant stock doesn’t explain the entire increase. There were also significant increases in deliveries of lower value machines including ploughs and cultivation machinery; mowers, haymaking equipment and balers. This suggests farmers from both arable and livestock sectors remain profitable and prepared to invest for the future.

Farm subsidies are unpopular with many of the public. However, the government seems to accept that they cannot be turned off like a tap immediately after Brexit. When Michael Gove addressed the Oxford Farming Conference in January, he confirmed that the government would guarantee subsidies at their current EU level until the 2022 election and that a transitional period would follow in England thereafter. He also stated that the nature of subsidies will change in future, most likely with greater support for environmental issues. We must take account of this to ensure we understand how demands for farm machinery might change as a result of new farm policy.

Something that we will all have to contend with in 2018, whether we are from agriculture or outdoor power, is GDPR (General Data Protection Regulation). This new regulation comes into force on 25th May 2018 and penalties for breaching it can be severe. In fact, they can be up to €20 million or 4% of global turnover, whichever is higher. Although it is a European regulation, the UK will be affected by it irrespective of Brexit. GDPR is designed to protect personal data and ensure individuals are not bombarded by unwanted adverts and promotions. I am sure we would all be in favour of such. However, it means all companies will be restricted regarding the collection, storage, and use of personal data. That includes data relating to customers and to members of staff. The AEA has run a number of courses on GDPR to help members prepare for it. I, personally, was shocked by the implications to my business. I know others have been too. For example, we will now need an individual’s ‘express permission’ to send a product brochure to him/her. That means show enquiry pads must be updated to ensure we have the legal right to send the customer the brochure that they have requested from us. This is just one potential pitfall. There are many more. If you haven’t yet prepared for GDPR, I urge you to make it a matter of priority now.

I have tried to suggest a few of the challenges we might encounter in the coming months and years. I am sure there will be others as well. However, there will also be opportunities. The AEA is here to support us in our daily business and ensure we are as prepared as we can be to negotiate the challenges we face, and to take advantage of the opportunities that arise.