Help is at hand for debt-laden farmers, advises Teagasc

Teagasc is urging debt-laden farmers to contact their Teagasc adviser, agri consultant or bank manager, as solutions are available.

With the winter feed crisis having severely impeded cash flow on Irish farms, Tom Kelly, director of knowledge transfer in Teagasc, is advising farmers to talk to their farm adviser and bank manager to work out a plan. Teagasc also suggests talking to a farm organisation representative, family, friends or other organisations.

“In many cases, the farm is experiencing short-term cash flow problems. This will recover when conditions improve as the underlying farm business is essentially sound.

“Such farmers need short-term access to additional cash to tide the business over and the farmer’s track record would support a high level of confidence in paying off this short-term debt when conditions improve.”

Teagasc has cited unfavourable weather conditions, both in summer 2012 and spring 2013, as leading to increased costs on many farms. Poor quality forages and now a shortage of grass and forage has led to increased feed bills.

“Farmers should act now and involve their advisers at an early stage,” he said. “Delay in taking action will only magnify the problems.

“The implication of the current cash-flow situation is likely to extend throughout 2013. In many cases it may not be possible to resolve current difficulties in 2013 and a planned approach extending into 2014 may be the most prudent way of resolving problems.”

Teagasc is encouraging those experiencing cash-flow difficulties to act early. It also suggests writing a list of all your debts, detailing “who you owe, how much you owe and the interest rate and term”.

It suggests drawing up a cash-flow forecast for the remainder of 2013 with a Teagasc adviser or agri consultant.

For meetings with bank managers, Teagasc suggests preparing a recent set of farm accounts and/or profit monitor; a statement quantifying the impact of 2012 weather-related issues on your farm business; and a cash-flow forecast for the remainder of 2013.

Mr Kelly said: “Be realistic. Banks will respond to realistic budgets and up-to-date cash-flow projections, supported by the farmer’s own records and accounts.”

Teagasc suggests arranging a meeting with your main input suppliers and those to whom you owe money. Explain your situation and offer a repayment schedule you can realistically meet.

In more severely affected farms, check out your entitlement to income supplements like farm assist and carers’ allowance.