Financial advice for farmers: In tough times, count blessings

Financial advice for farmers: In tough times, count blessings

The coronavirus pandemic is picking up pace and now represents a significant worry for all of us.

Of course, farming continues, regardless of whether the country is in lockdown or not, and this is most definitively a good thing. In contrast to us farmers, many others are now without the distractions that work can provide, and they were even severely criticised when last weekend saw large numbers (too large for social distancing) escape to nature.

That was unfortunate, now that the uplift in the weather over the past few days has lifted some of the winter gloom. There is a definitive move into Spring, with buds now visible on trees and grass actively growing, thanks in no small part to glorious sunshine earlier this week.

Reflecting on the unfolding events of the past few weeks and months, I am thankful to be a farmer. Farming might be hard work, and the financial rewards are, more often than not, disproportionately small for the amount of time and resources committed, nonetheless us farmers have some benefits. We work in a socially distant environment which, hitherto, was seen as isolating and for some lonely, but less so now.

For a farmer, there is a degree of confidence in knowing that the farm can provide at least some of the dietary and other needs of the household, whether it’s milk, beef, lamb. or wood for the fire. Perhaps there will be a return to farmers keeping the kitchen garden, or swaying back towards diversification, rather than intensification.

Perhaps one of the innate qualities that farmers possess is their resilience and perseverance, no matter what the circumstances. We faced many challenges before, from foot and mouth, to cliff-edge threats of a crash-out Brexit, BSE, TB outbreaks, snow storms and electricity outages.

Of course, this time it’s different, in that the threat posed by coronavirus is to our own personal health rather than an external factor which affects how our farms perform.

But history shows us that farmers, and other self-employed people, plough on even where crisis is layered upon crisis. I have every confidence that Irish farming will rise to the challenges, we will do our part in providing high quality and nutritious food for the inhabitants of this island, and much further afield. We must of course protect ourselves personally, taking heed of the advice issued from the Department of Health, and must protect the livelihoods of ourselves and our families.

It’s not yet apparent how the global recession predicted to swiftly follow suit from the outbreak will affect commodity prices, and ultimately, Irish farm incomes.

The disruption to global supply chains might bring either good or bad tidings to our domestic economy, because more exotic foods might become harder to secure, boosting demand for local product.

However, the prospects of an adequate CAP budget might be waning swiftly, as the EU will need to divert more and more of their financial capacity to repairing distressed economies.

On the flip side, Europe and indeed the world might place more weight on food security, and importantly, the way in which food is produced, going forward, to minimise anti-microbial resistance, and improve the environmental profile of farming, all to minimise the potential transition of diseases to humans.

For the immediate future, it is worthwhile making business disruption plans, and making the survival financial plans I covered here in the past two weeks.

Business disruption plans identify who is to take over your business, should you be unable to carry on, how to operate your business, who the critical contacts are (such as suppliers and service providers), and enabling others to take over the financial running of your business, should the need arise.

For the short term, reassess spending by the business, and personal spending, and consider whether each expenditure is fulfilling a need or a want. Knowing the difference between needs and wants is fundamental to slimming down cash outgoings, preserving the capacity of the business to weather these difficult times.

For some people, the loss of employment, and the loss of social connectedness, will propel them into shock, leaving them stranded and without the reference points by which they usually chart their way through life.

For us farmers, the day-to-day need to look after animals and crops will provide that much-needed distraction.

Focus on your own surroundings, enjoy the simple things in life like a crisp, fresh morning blessed with sunshine, and the cycle of a new spring.

Chartered tax adviser Kieran Coughlan, Belgooly, Co Cork.


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