Challenging times for farmers

In today’s challenging times farmers can feel locked in a very lonely place.  As the losses mount there may seem to be no obvious route out of the situation and discussing this with close family or friends might not be easy.

But it is often worth discussing your worries with someone you trust who also has an understanding of the farming industry.  Whether that is your accountant, farm consultant or land agent doesn’t really matter. The important thing is to get a fresh perspective on your business because the answers may be staring you in the face but for one reason or other are difficult to address.

Probably the first thing you need is to get a clear understanding of your fixed and variable costs so you can start to benchmark yourself against industry standards and this may help to identify where the issues lie.  

You might for example identify that you have high machinery costs which may indicate you need to consider running the farm in a different way, perhaps selling some machinery and employing contractors to carry out work you have traditionally done yourself.  This could also lead to the possibility of reducing your labour requirements which could either release family labour to earn money off the farm or simply cut your employed labour.

Or you may identify high finance costs are a problem and restructuring your debt may be a possibility.  If this is the case don’t be afraid of speaking to your bank manager.  Most of them are pleased to hear from borrowers looking to take proactive action to address difficult times.  Extending the length of a loan to reduce the level of capital repayments or paying interest only for a couple of years may help the farm through a short term cash flow problem.

These are just a few examples of things that you may identify if you take the time to look at your business closely and it often needs a trusted third party to ask you those difficult questions that will make a difference.  

The easiest thing to do is nothing, but if you want your business to prosper in the long term, carrying on doing the same as you have done for decades is rarely the answer. 

James Stephen MRICS FAAV
Partner
Rural Practice Chartered Surveyor, Wells
T: 01749 683381
E: james.stephen@carterjonas.co.uk