Tag: Farmers

Farmers cannot be the forgotten heroes of the coronavirus pandemic

The coronavirus pandemic has amplified the uncertainty and fragility of the conditions within which farmers operate.

The coronavirus pandemic has caused us all to become acutely aware of our own mental health, as a “new normal” has emerged. In the UK, there is sharp focus on the mental health of keyworkers supporting the nation in an array of fields such as the NHS, social care and education, but one industry’s contribution that should not be overlooked is the farming and agricultural workforce.

Seasonal labour

Concerns around levels of seasonal labour also predates the pandemic, and concerns have been raised by those within the industry throughout the Brexit debate. UK seasonal farming has been chronically understaffed since the UK voted to Leave and the value of the pound fell. As has been widely documented, an estimated 70,000 seasonal workers are required throughout the year, and around 90 percent of those are from outside the UK. But with restrictions on travel due to coronavirus, farmers in the agricultural, horticultural and dairy industries in particular are reporting severe labour issues.

The Government recently launched its “Pick for Britain” campaign to mobilise a land army of British pickers to help fill farm vacancies. This did not come without concerns from farmers, as many seasonal workers are normally returnees, arriving at the start of the season fully trained in the necessary skills and machinery to hit the ground running. By stark contrast, training new UK recruits can be costly and initially result in lower productivity. Furthermore, recent reports note that, following tens of thousands of initial sign-ups, just 112 people were hired by UK farmers last week. Many applicants cited that they could not commit to the full length of the contract, farms were too far away, or they had caring responsibilities and therefore could not work long hours.

Change in consumer demand 

Changes in consumer demand during the coronavirus pandemic, with a move from out-of-home eating to more meals eaten at home – an estimated 500 million more per week – has resulted in some farmers losing their market overnight. This is down to difficulties in redirecting food produce once destined to the foodservice sector, as it been noted that consumers often wont replicate the meals that they would have had out of home, and there are issues with repackaging foods for retail. The impact on dairy farmers has been widely documented with videos of many having to pour away milk – an estimated 1m litres worth – along with the effects on the meat and horticulture sectors. Further to this, farmers have been faced with an increase in the theft of animals by criminals seeking to “cash in” on public concerns about food shortages.

To compound the challenges, the instruction by government to close B&B accommodation and farm cafés amongst other restrictions, and the subsequent loss in public demand, has also impacted farmers who have diversified their sources of income. These diverse streams of income are often vital to small farms’ survival, as many do not make a profit from their farming activity alone, so the financial consequences of this collapse will undoubtedly impact many in the sector.

5 tips for farmers facing financial difficulties

Farmers facing financial challenges should act immediately to identify and resolve problems before they become more serious.

Poor cash flow, falling prices, increased competition and Brexit uncertainty are all causing UK farmers a financial headache.

It is a difficult economic climate for the farming industry and farmers must practice careful financial management, keeping a close eye on their debtors and cash flow to avoid running into serious financial difficulties.

If your farming business is already in distress, it’s important to act quickly to prevent the problem from spiralling. Here are five tips for easing financial pressure. 

Check your cash flow– If your farm business is lacking cash flow it puts you in a precarious financial position and can prevent your business from growing. It’s important to keep accurate and up-to-date records of all income and expenditure and ensure that you always know where you stand with your cash flow at any one time. 

Review your budget– If cash flow is a problem for your farm then it’s time to review your budget and financial plan. Make cutbacks where possible to reduce your costs and improve your margin.

Consider diversifying– More than half of England’s farmers are now successfully diversifying their business. Look for alternative sources of revenue by thinking about ways you can leverage your existing assets. 

Farm asset finance– If your business is struggling or stagnating because you can’t generate the funds to purchase new machinery, vehicles, or other assets, then consider farm asset finance. Asset finance makes the best farming equipment more affordable, helping farmers to boost productivity and reach their full potential.

Farm asset refinance– Unlock the cash that is tied up in unused machinery or vehicles by refinancing them. Refinancing farm equipment can help to free up money to ease cash flow problems or fund the purchase of a new asset to increase your efficiency or production rate.

For more information about farm asset finance, or to discuss other funding solutions available, give our team here at Richmond Asset Finance a call on 0113 288 3277.

Farmers – Are You Exploiting This Tax Allowance?

It may not be all good news for farmers this year but there is one particular piece of news that every farmer should be aware of and that relates to an opportunity to take advantage of machine purchases with the help of the government.

Farm machinery is often a major purchase with tractors alone costing in excess of £100,000 so if these savings can be offset it has to be good news. Fortunately, the government stepped in to help farmers with a change to the Annual Investment Allowance that will go a long way towards helping farm businesses make some big investments in farm machinery.

The fact that the move isn’t permanent should alert farmers to take advantage before 2021. The AIA threshold was £200,000 in 2018 and this has temporarily risen to £1million for the next 2 years.

With a lot of uncertainty at present and for the future of some farms in the UK this allowance could make a difference. Specialist finance could help ease costs further for farm businesses and enable more investment to improve efficiency and explore new opportunities for farm business development in the future.

If you would like to find out more about farm finance contact one of our advisors today who will be able to help.