Good Morning. Largely dry with sunny spells for most, although a few showers possible today. Some rain in the north on Friday. Feeling warmer in the sunshine with light winds going in to the weekend.

In todays email:

• Complex VAT issues arising from farm diversification: Key Points to Consider

• Vertical farming market to grow by $18.8 Billion: Revenue forecast, company rankings, competitive landscape, growth factors, and trends

• E.coli outbreak: Dozens of stores are part of the recall including WHSmith, Boots, Asda, Tesco, Co-op, Aldi, Sainsbury's and Amazon.

VAT and diversification: Beware of the Pitfalls

Diversifying farm activities can bring about complex VAT issues. Here are some important points to keep in mind:

• Complex VAT Legislation: Accountant Julie Butler of Butler & Co highlights the complexity of VAT rules and the need for simplification.

Confusing Treatment Examples

• Horse Livery: The VAT treatment can be zero, standard rated, or exempt.

• Barter Arrangements: Exchanging services or goods, like woodland maintenance for timber or looking after cattle in return for grazing, can be tricky.

New Markets and Products

Introducing new products can change VAT rates. For example, food is generally zero-rated, but processed and packaged products might fall into the standard rating net.

• Hay for Pets: When sold for pet consumption, including for horses, hay should be charged the standard 20% VAT rate.

• Confectionery Trap: Farms moving into food retailing should be aware that baked and sweet goods, ice-cream, crisps, and alcohol are standard rated.

Food Bars Classification

An appeal by WM Morrison argued that Organix and Nakd snack bars should be zero-rated but were found to be confectionery due to their appearance and marketing.

Supply of Land and VAT

The temporary use of land for non-farming activities is also under scrutiny.

• Land Hire: Generally VAT-exempt unless significant ancillary services are provided.

Understanding these VAT nuances can help farmers navigate the financial implications of diversification effectively.

Why Investing in Ag Biorationals Is a Smart Move

The global biorationals market is booming, making it an attractive sector for investment. Here's why and how to succeed:

Why Invest in Ag Biorationals?

Strong Market Growth: The sector is experiencing rapid expansion.

• Supportive Influencers: Governments, health-conscious consumers, and market-attuned food companies advocate for biorationals.

• Bankers' Support: Biorationals help ensure sustainable farming, making them appealing to financial institutions.

• Technological Advancements: Improved formulations and understanding of biorationals’ benefits drive their adoption.

• Financial Appeal: Biorationals offer attractive margins and growth potential, appealing to private equity and traditional crop protection companies.

Key Success Factors for Biorational Suppliers

1. Manufacturing Capability and Capacity: Ability to scale production as demand grows.

2. Formulation Technology: Ensuring efficacy and shelf life of products.

3. Understanding MOA and Biological Efficacy: Targeting effective pests and crops.

4. Market Access Business Model: Deep market penetration and strong distribution channels.

5. Dedicated Marketing: Investment in marketing beyond product claims.

6. Technical Salesforce: Skilled sales team knowledgeable about biorationals.

7. Resources to Execute: Financial backing and ability to attract top talent.

Execution Challenges and Watch-Outs

• Business Model Complexity: Managing both traditional crop protection chemicals and biorationals.

• Financial Sustainability: Deep investment in R&D and achieving profitability.

• Entrepreneurial Mindset: Experience and adaptability are key.

• Intellectual Property: Protecting patents and innovative delivery methods.

• Cultural Focus to Adapt: Ability to pivot and maintain profitability.

Four Key Questions for Investors

1. Adoption Rate: Monitor the speed at which biorationals reach critical mass in agriculture.

2. Monetization Plan: Clearly defined strategy for making money.

3. Acquiring Company’s Characteristics: Ease of integration and financial capability.

4. Exit Plan: Strategy for divesting if necessary, considering market conditions.

Investing in biorationals is promising but requires careful consideration of various factors and stakeholders to ensure long-term success.

🍯 Buz-Worthy

Vertical farming market projected to Hit $18.8 Billion globally by 2030.

Rolex 'eaten by cow' reappears after 50 years.

Interest on government farm loans could be reduced.

Agriculture Ministry funding illegal farming outposts.

Hill farmers afraid to visit lands at weekend due to threat from walkers.

🎥 Creators on Farm

Charles Dowding explains the maintenance behind flowers under the fruit trees in early June.

Andrew Ward announces they will be hosting the Cereal 2025 Event on the 11th - 12th June.

John Pawsey posts a tribute to his late father for fathers day.

Will Kaleb Cooper be on the next I'm A Celebrity Get Me Out Of Here?

🛒 Products Under £1000

360 Degree Camera gives you the peace of mind you deserve as a farmer or rural business owner.

Luda FarmCam HD complete farm camera system.

Steel Jacks are used primarily for assembly appllications, to brace or support loads.

Verve post hole digger is ideal for the quick removal of dirt in the soil and perfect for digging holes for fence posts.

🧀 Farm to Fork

Recalling products over fears they could make people sick with E.coli.

World-famous Gloucestershire Cheese Rolling is back for another year in May 2025.

Top 10 key requests from the meat sector for the next government.

BEIC launches manifesto for a sustainable British egg industry.

Your feedback is important to us. Please email us to share your thoughts or any suggestions you may have.

Thank you for reading and please take moment to share and follow us on social media.

If you haven’t already, consider subscribing below.