Farmer Responses to Brexit: Attitudes towards Risk in Scottish Farming – Briefing Note

The UKs withdrawal from the European Union presents multiple uncertainties for farm management planning. Encouraging growth within the agricultural economy requires some acceptance of risk within farming decision making. This briefing note outlines the results of a survey of 2,494 farmers, crofters and smallholders, run during the summer of 2018, on their approaches towards farming and how this may affect business planning post-Brexit.
We find three categories of farmers based on their risk perceptions. Risk averse farmers (39%), risk taking farmers (17%), and risk cautious farmers (44%). Risk taking farmers appear to be more likely to have increased their intensity of production and their level of diversification. In addition they are more likely to have invested in new technologies and new capital. On more environmental led approaches, the differences are less extreme, especially in aspects around woodland expansion which may indicate different motivates towards public good activities. There is a fairly even spread of risk perceptions across farming types, with risk takers more likely to emerge from very large farms, and risk averse farmers from very small farms. Older farmers are more risk averse, and a higher proportion of risk cautious and risk takers are under 45. Only a slightly higher proportion of new entrants are risk takers compared to established farmers.
Understanding risk perception is crucial as support systems may change. Risk taking activity can lead to higher levels of investment and therefore increasing on farm efficiencies. On more greener activities there is less evidence. However, whilst risk taking may lead to more sustainable growth, the high level of debt within Scottish farming may support more risk cautious approaches to investment. Nevertheless, supporting farmers away from risk averse behaviours (which compose 39% of the sample) should be encouraged.