Carter Jonas
Carter Jonas

Plan ahead to protect your finances

Rain sweeping across the country in mid-September, just as many arable farmers were hoping to harvest the estimated 50 per cent of the wheat crop that was still standing in fields, finally dampened the hopes of many that they would avoid the hard hit of shrinking incomes.

There has already been a great deal of focus on the travails of the dairy farmers, but livestock sectors have also suffered with supermarkets criticised this summer for heavy stocking of New Zealand lamb as British lamb output reached its peak for producers to find they were also facing a diminished market.

With no agriculture sector seemingly safe this Autumn from dwindling incomes as both world commodity prices and British weather conditions pour rain on the parade it’s also time to face up to possible delays in BPS payments, due in December but with the RPA struggling to check all the applications under the new system for accuracy.

Perhaps understandably, RPA is reluctant to make early payments that could bring possible errors and attract penalties from EU bureaucrats, even though those same officials have supposedly released funds early to ensure struggling farmers see some respite.

The message therefore is probably not to wait for an official lifeline to possibly 

be thrown but instead plan ahead to counter the combined effect of lower incomes from commodity prices and the end of year cashflow strangulation if BPS payments are delayed.

Talking to your bank manager sooner rather than later is the best course of action as he will more readily assist a customer who has considered forward planning and realises there will be a looming cash flow issue. This is much better than someone buries his head in the sand and assumes all will be alright who then finds his bank less willing to help.

The obvious answer is extending the overdraft but there are other options, such as AMC’s five year Flexible Facility.

As the name suggests, it allows drawdown of funds to an agreed limit as and when needed with repayments to suit individual business needs. Another key feature, unlike a number of banks, is that there are no annual reviews so the facility can provide a guaranteed source of working capital for five years. Carter Jonas has many years’ experience helping farmers as appointed AMC agents and, although it may seem obvious, our first advice would be not to contemplate any borrowing that the business cannot realistically afford to repay.

Planning ahead is the key to keep your farming business running on an even keel.

John read carter jonas


Associate Partner

John joined the firm in 2002 and is involved in a wide range of professional areas. He has particular expertise in valuations of farms and estates for lending and taxation purposes, agricultural landl...

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