MSO is the big idea of this book, which is about Agricultural & Rural Economics and is published by Unbreaking, part of 5m Books, publisher of 2024's Six Inches of Soil.
The Profitable Farm is aimed at farmers with a plan for business improvement, academics who need to re-visit the ‘Standard Theory of The Firm’ as it applies to farming, and policy-makers "charged with responsibility to secure food-supplies and provide support programmes for the sector".
This book is not about farming practices, sectoral economics (at a national planning level) or environmental impact issues. It is about farming as businesses with "significant responsibilities to the natural environment and uncompromised animal welfare".
The objective of the business is to make a profit and to care for animals and the environment. You can make profit without compromising good farming practice, the book promises. This means downsizing operations.
Author Clark is a 'non-generational' upland farmer on 170ha in Nethergill, North Yorkshire, while Scanlon has a corporate background.
Maximum sustainable output "offers increased economic and environmental resilience at both the individual farm and wider industry levels". Farming involves two types of energy, sunlight and industrial energy such as fertilisers. Energy considerations drive all outputs.
There is useful information about accountancy, from filing your accounts, profit and loss, and working out cashflow, which is income against expenditure, including subsidies and taxes, both of which are rapildy changing areas under the current Government. The removal of subsidies will increase farm gate prices, say the authors and the best guarantor of food security is farm profitability. If farming profitability is maximised, then volumes will be maximised too.
Does the business make a profit? This means are sales higher than variable costs, expenses that change directly with the level of production or sales.
Analysis of 320 farm accounts finds 18% do not cover variable costs.
Then you take away fixed costs (rent, salaries, insurance) and see if you are still profitable. Fewer than 20% are.
The conclusion is that the UK is good at growing grass, so should concentrate on producing ruminant animals that eat grass.
