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Key performance indicators

Every farmer in every sector should know their KPIs

Understanding and comparing relative farm performance is seen as a powerful management tool.

Yet only around 20% of farmers carry out some form of business bench marking and even fewer measure and benchmark against key sustainability metrics. There is significant scope to accelerate bench marking through the adoption of simple key performance indicators (KIPs) that are ubiquitous across the industry.This would deliver a step change in farm performance, increase the resilience of the industry and reduce environmental impacts.

Farming KPIs - where are we now?

In contrast to many other sectors of the economy, the application of KPIs in farming is at a relatively low level.

There are, of course, differences across the farming sectors in terms of uptake of bench marking related activity, but there remains significant scope for this to increase.

Using data to assess performance is not new to agriculture. There are many industry initiatives looking at KPIs and a potential wealth of indicators and metrics is available to farmers.

However, the concept of KPIs is complicated by a diversity of enterprises and complex farm businesses. Other challenges include:

• Variation across the industry in the terms used to define what is measured
• The need to agree how benchmarks are set and who decides upon them
• The need to align expectations around what measurements can be captured consistently across the industry

What is the APTF doing?

The priority of the Agricultural Productivity Task Force is to build on and co-orindate the KPIs work that is already taking place to make measurement consistent and easily accessible for farmers. The aim is that KPIs will become commonplace in farming, for the benefit of individual businesses and the industry as a whole.

To tackle the complexity associated with KPIs, the intention is that indicators should be broadly categorised around the key headings of:

• Business i.e. financial performance
• Production i.e. physical indicators
• Environment – these may be measures that are a proxy for environmental performance

Who is leading this work?

The APTF work on KPIs is Chaired by Phil Bicknell, AHDB Market Intelligence Director, with wide input from farm business consultants, trade associations, farmer representatives and industry specialists.

We would like to gain a level of consensus from farmers, growers and industry around what the KPIs should be and how they should be calculated. Any farmers or industry organisations who would like to be involved can contact Phil at phil.bicknell@ahdb.org.uk

What can you do now?

AHDB has done some preliminary work looking at previous research, data readily being captured by farmers and growers and existing KPIs in use.

This has led to a narrowed-down selection of indicators across business, production and environment for a variety of enterprises and farm businesses as a whole.

Farmers' help is needed to add to this list of indicators and to help identify which are the most important. Work will then take place to confirm how the KPIs should be calculated.

AHDB's pilot KPI Express tool currently has dairy indicators and some beef and lamb KPIs, mainly focused on production. Farmers are invited to try them out.