The circular framework gripping the global economy

There is no getting away from the fact that in recent decades the agricultural industry has become increasingly resource intensive with the accompanying increases in capital and operating costs.

However, as buzzwords such as sustainability and traceability become more ingrained in our everyday lives, it begs the question: how can we work towards our businesses achieving these desirable traits that customers are crying out for, while ensuring we remain efficient and profitable?

The role of a circular economy

As a society, the majority of us will make, use and dispose of many commodities we come into contact with. However, there is a growing emphasis on the need to extend the life cycle of commodities to recover greater value from these resources, as well as minimise waste throughout supply chains. This not just being physical waste.

See also: Top ten business tips for farmers

The ‘circular economy’ model, as it is known, aims to keep products, components and materials at their highest utility and value at all times.

An example of a circular economy is the leasing of equipment or machinery. The process of ‘sharing’ assets, whether that’s a tractor or a packing machine, means there is the opportunity to reap financial benefits and optimise the utilisation of assets all while improving your sustainable impact.

For rural businesses, big or small, this concept could be a very effective means of improving efficiency and productivity by reducing costs - you no longer need to invest big sums of money on equipment that will need maintaining and replacing - and optimising outputs.

Another more common example of a circular economy is the utilisation of food waste. Rather than waste being sent to landfill, many people are now considering alternative uses for it from animal feed to biofuels. However, it’s not just food waste we should be looking to re-purpose, but many other aspects of waste too, from paper and cardboard to liquid waste products.

Analysing your supply chain

When it comes to thinking about your own supply chain and how this could be made more ‘circular’, look for opportunities. The circular framework is one of the biggest revolutions to hit the global economy for centuries. The concept very much challenges businesses to rethink their current business models and operations and consider the productivity changes which could be made.

See also: 2019 rural business trends and opportunities

As well as looking at the opportunities surrounding commodities, it’s also worth considering the softer aspects of your supply chain, relating to things such as your employees and their work environment. These are factors which are often overlooked but can have a significant impact on the business as a whole. You would be surprised how small changes here could make a big difference later on in the supply chain.

Working more collaboratively with your own teams and with external partners will go a long way in helping you make a success of your business.

The more integrated your supply chain becomes, the greater the opportunity to build capacity that allows for the realisation of economies of scale.

There are so many examples of businesses within the agricultural and rural sectors where people are working in silos when they could benefit hugely from working more closely with their supply chain, building a network of strategic partners all of whom would benefit substantially from improvements to efficiency and sustainability.

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