THE most important job farmers should do in December is to plan their cash flow for 2010, according to Teagasc.
Dr Tom Kelly, Teagasc financial specialist, urged farmers to act now and plan finances for next year.
He told a meeting of the Teagasc Authority that farmers need to prepare a budget for the next 12 months detailing the main flows of cash into and out of the farm business.
“Profitability in all farm enterprises is low and 2009 has been a difficult income year for most farmers. All costs must be controlled including family living expenses and debt repayments,” he said.
A Teagasc campaign offering farmers a Financial Health Check was launched in March of this year. Through this contact with farmers, two categories of individuals needing assistance have emerged.
The first are those efficient farmers who face temporary cash flow problems and need help to overcome these difficulties.
The second category is those more heavily borrowed, with low profit and inadequate repayment capacity.
Dr Kelly said in both situations the cash flow budget is critical and will help to minimise the cost of financing the business and avoid the risk of extending credit beyond agreed limits.
Teagasc advisers have a range of financial planning tools such as a cost control planner, a three-year budget planner, an eprofit monitor, repayments calculator and farm assist calculator.
These tools can be used to analyse an individual farmer’s financial situation and allow for clear decisions to be taken.
Dr Kelly said Teagasc advisers are well equipped and trained to help farmers make better financial decisions based on individual financial circumstances.
The Teagasc Authority reiterated its support for the organisation’s campaign to assist farmers who are experiencing income and financial difficulties.
Meanwhile, Irish Farmers Association president Padraig Walshe said the challenge for the Government in next week’s budget must be to support primary production through one of the worst crises farmers have ever faced. He said farm incomes in 2009 are set to fall by 28% through a combination of low product prices, Govern-ment cuts and wet weather during the summer and in recent times.
The closure of the REPS4 scheme, and cuts in the Disadvantaged Areas and Suckler Welfare Scheme have had a devastating impact on the income of thousands of farmers.
“Average farm income this year is expected to be around €13,000 for all farmers and €16,000 for full-time farmers which has to pay for living costs and meet bank repayments.”
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