Ifac’s Food and Agribusiness report launched this week reveals that cost increases are hitting 71% of small and medium enterprises (SMEs), twice as many as in last year’s survey and nine percentage points ahead of 2019.

Recruitment was identified by SMEs as a problem, with lack of interest in roles the main issue for 58% of businesses followed by people not having the necessary skills, an issue for 48% of businesses.

Money, surprisingly, came well behind these as the third biggest issue, applying to 25% of the businesses surveyed.

David Leydon, head of food and agribusiness at ifac, highlighted the issue of engineers and welders in particular as being in very short supply in a podcast with the Irish Farmers Journal.

Despite the problems with recruitment, 98% of food SMEs intend to maintain or grow their business over the next year and the level of optimism at 77% is at a four-year high.

Although 86% of SME sales are in Ireland, Brexit still has had a negative impact, with 64% of companies surveyed saying it has affected them. Increased costs, transport disruption and accessing raw materials have been the biggest Brexit problems for SMEs

The report touches on COVID-19, but only in the context of finding that 55% of the businesses surveyed see the biggest long-term impact of the pandemic as being a change in consumer habits.

Some 78% of SMEs don’t have a strategic plan in place, which probably reflects that many SMEs are driven by a single owner who carries the strategic plan for the business in their head, as is the case in 28% of businesses surveyed.

While small businesses are often at the leading edge of developing new technology and innovation, formal research and development investment is not undertaken by 44% of businesses surveyed. Similarly, almost half, 47% don’t have a succession plan in place.

Environment and climate issues have moved centre stage according to the report, with 87% of companies saying they are making positive climate action plans and 52% having a formal advisory or board structure in place.

Leydon said that as well as businesses being proactive in their own right, they were also driven by often being part of a supply chain for larger businesses that were working to reduce greenhouse gas emissions.

A total of 213 businesses were interviewed for the survey.