Rural sector has reasons for optimsim amid the Covid-19 crisis

By James Petty,
Partner, Rural Land Management, Aberdeen

In recent years these old WWII posters have become popular as wall art and as a humorous comment on modern life. Now they have real resonance as they did with their original wartime purpose. In the current circumstances arising from Covid-19 to “Keep Calm and Carry On” might seem easier said than done with such a major impact on society and business causing huge anxiety.

Many businesses, particularly those in the hospitality sector, have seen income dwindle to nothing in the space of a few weeks and no knowing when normal life will return. Rural businesses are affected in a number of ways, those with diversified incomes relating to tourism will have also suffered a drop off in income, just at the start of the main season while those in the soft fruit and vegetable sector are expecting to have major labour shortages to get crops harvested over the coming months.

Government announcements have been some help in that workers can be put on “furlough” with 80% wages. That seems like a great idea and will help preserve jobs until things recover however, as always, there is a catch, one being that staff put on this scheme are not allowed to work. This will limit its usefulness to those who need work done yet have cashflow pressures.

For many rural businesses the furlough scheme will be of little use and the subsequent announcement of help for the self employed will be of assistance to some. The difficulty is that it will be based on taxable profits. For those on low profit levels, which is all too common in the struggling farming industry, 80% subsidy based on not a lot is, well, not very much at all. At the other end of the scale businesses with profit shares in excess of £50,000 are excluded and yet these businesses may be suffering huge impact on cashflow.

The government scheme to underwrite emergency loans to businesses will be of help to some, however it is still debt and the banks will want to know the loan would be viable proposition in a “no virus world” so many businesses may struggle to obtain funding.

It is early days in this crisis and very difficult to plan ahead. We all need to batten down the hatches and try to ride out the storm, hoping that businesses are still afloat when the storm passes.

There are reasons to be optimistic, however. The rural sector is mainly involved in primary production and we all need to eat. The unemployed staff laid off from the hospitality industry may be the new army of seasonal workers the soft fruit and vegetable producers need and there is surely a strong market for produce given the bare supermarket shelves and difficulties importing supplies.

Despite all the inevitable worry and anxiety the current situation has caused we should remain optimistic and remember that instruction on the old posters – Keep Calm and Carry On.


Article posted on 01/04/2020

Sign up to our newsletter

Areas of interest