Is Agriculture A Growing Industry?

The agricultural sector is multifaceted. There are many areas, some of which may be seen as steady whereas others are growing.

Here, we’ll briefly explore the world of agriculture, outlining the different sectors, which areas are seeing steady and exponential growth, where productivity stands on a global scale and more.

What Are the Types of Agriculture?

There are several types of farming in the agricultural industry, some of which overlap. Here’s a basic overview of the different areas:

• Arable farming – Growing fruit, vegetables and other crops
• Pastoral farming – Includes rearing livestock to sell meat, eggs, dairy etc.
• Mixed farming – Farmers who do both arable and pastoral farming
• Subsistence farming – This refers to small farms where the aim is to feed your family rather than produce enough to sell
• Commercial farming – Where stock is grown for profit. Both arable and pastoral farmers can be either commercial or subsistence farmers
• Intensive farming – Higher output is expected for this type of agriculture. Intensive farmers grow or rear enough to be sold commercially
• Extensive farming – This is similar to intensive, but focuses on low input (less use of fertilisers, capital and labour)
• Sedentary farming – This refers to farming that takes place in one location year on year
• Nomadic farming – Farmers will move around finding new places to rear and grow their stock
• Regenerative farming – Here, farmers put effort into improving soil and water conditions and working ‘alongside’ nature rather than ‘against’ it

In the UK, many farmers invest in mixed farming.

What Sector is the Most Productive?

Productivity fluctuates from year to year, although milk, beef, and poultry have had the highest output in both 2020 and 2021 in regards to livestock, with those three increasing in value.

The least productive in that category for both 2020 and 2021, were eggs, pig meat and mutton and lamb. Although productivity did increase for all three over the two-year period.

In terms of crops, wheat, fresh vegetables and plants and flowers have been the most productive. In 2021, wheat contributed considerably more than the previous year. The least productive are forage plants, other industrial crops and oilseed rape. Forage plants, fruit and potatoes were the only crops to be less productive in 2021 compared to 2020.

Has Agriculture Increased or Decreased?

This is an incredibly interesting question, and the answer really depends on what angle you look at.

If you look at it from a geographical perspective, Gov data published in October 2021 states that agriculture areas in the UK have stayed between 17-18 million hectares since 2000.

From this viewpoint, you could argue that the industry is neither increasing nor decreasing. However, in 2018, Defra announced a regime where land managers and farmers are paid for the environmental benefits they deliver, rather than the amount of land being farmed. It could be argued that this is leading to an increase in environmental farming.

The document also mentions that arable land utilised to produce bioenergy crops, for example, has risen slightly (by approximately 1%) since 2015.

Looking purely at outputs, in 2020, livestock was sold for £15,106 million. In 2021, this increased to £16,127 million. Crop outputs raised £8,866 million in 2020 and £10,660 million in 2021.

Another angle you could look at to ascertain whether the agricultural sector has increased or decreased is by looking into total factor productivity (TFP).

From this perspective, total factor productivity (how well the sector transforms inputs into outputs) has risen by 50% since 1973, with a 32% rise in outputs and a 12% drop in inputs.

From an international standpoint, the total factor productivity has increased by 18% since 1991. Comparatively, only Ireland had a poorer growth rate of 4%. Other countries saw:

• New Zealand – 35%
• Netherlands – 52%
• United States – 54%
• France – 82%

This suggests that while productivity in the agricultural sector is increasing, there are potentially plenty of opportunities to explore and more growth to harness.

On the whole, the agriculture sectors are growing, with some areas performing better than others.

Why Is Agriculture a Growing Industry?

If we agree that agriculture is growing, based on productivity, then it would be interesting to explore what lies behind this growth:

1) Long-term need

The global population is hypothesised to grow by around ten billion by 2050. With that, the demand for food production for fruit, vegetables, meat, eggs, milk and fish is expected to rise too.

Ensuring there’s enough food for the world’s population is incredibly important for global food security, and there has to be growth for the world to keep up with demand and ensure that everyone is fed.

2) Advances in tech

Technology such as artificial intelligence, connected sensors and analytics have been a real game-changer for this sector.

Tech can boost productivity by increasing the speed and scale of farm equipment meaning that farmers can get higher yields in less time and with less physical exertion.

3) Looking towards sustainability

We mentioned Defra’s move to distribute subsidies throughout the UK to provide additional post-Brexit support for farms that are taking on more sustainable practices.

With the rise of conscious consumerism and people wanting to know more about where their food comes from and the impact it has on climate change, agriculture is finally getting the attention it deserves as essential work.

Why is the Agriculture Sector so Important?

In another piece we’ve published, we’ve explained why the agricultural sector is the backbone of the economy, but financial security is not the only thing that makes this sector so vital.

• (Global) food security
  According to Gov.uk, agricultural yields account for half of the food we eat in the UK. The percentage of food imported is due to food preference within the UK including foods that cannot be successfully grown domestically. However, the UK also exports produce grown and reared at home. As an example from another government document, fish and seafood caught in the UK are mostly exported. By being part of an importing/exporting cycle, the agriculture industry is providing global food security, keeping people fed and happy.
• Employment
  In the UK, agricultural production provides jobs for almost half a million people. This will likely include employing individuals in rural areas. Agricultural sectors are able to employ both regular workers and seasonal or casual workers during peak periods in remote areas, potentially creating jobs throughout the year. Compensation for farm workers rose in 2021 by 83 million, showing the continuing support an agricultural business offers to its local community. 
• Safeguarding the environment
  In 2020, 71% of the UK’s land was managed by farmers and land managers. The government document mentioned earlier specifies that this allows us to better protect our natural environments. While agriculture has been poor at this historically, there’s currently a rise in regenerative farming – a farming practice that works in harmony with nature, improving the water and soil conditions (soil works to capture carbon) as well as enriching the wider environment. An agriculture organization on such farms has a considerable safeguarding role that other sectors aren’t able to provide.

How Can We Improve Agriculture?

There are numerous ways agriculture can be improved to increase productivity, one of which is the technologies being developed.

As one of the most dangerous sectors to work in, new technologies can play a major role in increasing the safety of workers. Just some examples here are:

• Smart headwear to regulate airflow, measure fatigue, heart rate and body temperature, etc.
• GPS monitoring on clothes and clothing that measures blood pressure, breath rate, blood oxygen, etc.
• Smart shoes and socks that measure gait, activity, calories, etc.

Technology can also assist in other areas of agricultural production. Advanced connectivity has the potential to radically transform farming by 2030, according to McKinsey, with tech helping with:

• Smart crop monitoring – watching over numerous field crops and making environmental adjustments to suit
• Smart equipment management – Extending the life of farm equipment and lowering input costs
• Self-operated machinery – providing higher yields through precise interventions
• Drone farming – to cover a large area in a shorter timeframe to reduce harvest losses
• Smart livestock monitoring – from individualised feeding to movement tracking and illness detection

As you can see, there are many factors at play as to whether agriculture is a growing sector. With that said, technologies and smart farming equipment have the potential to play a huge role in driving the sector’s development.

At Evolve Trader, we help B2B brands serving in the agriculture sector manage their eCommerce catalogues and create an ordering platform that puts the shoppers at the centre. If you’d like to find out more about our integration, please get in touch or book a demo.

Image by Pete Linforth from Pixabay