Teagasc launched a campaign called Get Farm Financially Fit this week. It started in Carlow on Monday and continued with a number of events across the country. They pulled together no less than 22 stakeholders, including banks, farm organisations and the Irish Farmers Journal. More interestingly, there was a few not normally seen on the pitch, such as Money Advice Budgeting Service (MABS) and Mental Health Ireland.
The roadshow clearly set out why farmers need to focus on their finances and outlined how they should do it. The big question is: do farmers really want to get financially fit?
I ask that because just like getting physical fit it takes a commitment that normally involves doing things that you would rather not do. Things like budgeting and asking yourself the hard questions. Cashflow planning on the farm and in the household is the first step that farmers are being asked to commit to in 2015.
Launching the initiative, Prof Gerry Boyle, Teagasc director, said it is vital to look at the overall income situation, as a drop in farm income means there are less resources to keep the household intact.
“This increases the risk of severe poverty and stress that is borne unfairly by farm women,” he added.
Minister of State at the Department of Agriculture Ann Phelan highlighted the importance that prudent financial planning has on income. She also said that additional credit at longer terms and more favourable rates is available from the new Strategic Banking Corporation of Ireland for the agricultural sector.
Minister Phelan had just come from the launch of the next step for LEADER funding and said that projects that got LEADER grants can use them as collateral to access loans, a major obstacle under the last programme.
As the event went on, the reason for why the campaign is needed became clear. Despite an overall increase in headline output and exports from the agricultural sector, farm income in some farm enterprises remains a serious challenge.
Fiona Thorne, Teagasc economist, highlighted that over one-third of all farm households could be considered vulnerable as they are not economically viable and they have no off-farm income, according to recent Teagasc research.
Based on data from the Teagasc National Farm Survey, the proportion of economically viable farms in 2013 was 35%. A further 32% of farm households in 2013 could be considered sustainable, but only due to the presence of off-farm income.
Being financially fit means families can start to look at how to improve income inside the farm gate and also how to go about looking for other sources of income outside it. Sarah Bourke, Social Justice Ireland, said a couple in rural Ireland needs €20,000 to live. A couple with two young children needs €30,000. This would be similar to what I saw from the families involved in Operation Cashflow over the years where little money was wasted.
Even the farmers that were making enough to pay a wage and give a return on the investment have to be financially fit to ensure they make the right decisions to keep it that way, particularly if they plan to expand. You have to get better before you get bigger – that’s the Teagasc mantra.
While there are huge opportunities with milk quotas going next week, we are heading into a time of increasing volatility and continued upwards pressure on inputs.
Convergence of direct payments will take from some farmers, mainly those who have had high production in the past, and give to others. GLAS, while welcome, will not replenish what has been lost from REPS.
It is easy for farmers to blame all their problems on the market and prices that are outside their control. However, that’s a bit like standing on the sidelines and shouting at the ref. To start getting financially fit you have to make the decision to get onto the pitch. That means you have to start to use the tools that are readily available.
When the financial toolkit was opened at the end of the day the message was clear. There was no magic wand. There were no new tools that will magically make you financially fit. The campaign is more about the lack of usage of the existing tools in the farming community.
It is about highlighting the benefits of what is actually there, dusting them off and using them. One advantage that was focused on was the cashflow planner. You can do it on paper or in a notebook if you want, said James McDonnell, Teagasc financial specialist.
He also encouraged the use of the Teagasc cashflow planner that is available for Teagasc clients – it will help make it easier and also gather the information needed for the other major financial tool, the eprofit monitor.
So if you really want to get financial fit in 2015, you should not just say, it but do it.
In brief
• Get Farm Financially fit is an initiative launched by Teagasc and stakeholders.• It highlights the importance of cashflow and long-term planning.• Visit www.farmfinanciallyfit.ie for more details.
Teagasc launched a campaign called Get Farm Financially Fit this week. It started in Carlow on Monday and continued with a number of events across the country. They pulled together no less than 22 stakeholders, including banks, farm organisations and the Irish Farmers Journal. More interestingly, there was a few not normally seen on the pitch, such as Money Advice Budgeting Service (MABS) and Mental Health Ireland.
The roadshow clearly set out why farmers need to focus on their finances and outlined how they should do it. The big question is: do farmers really want to get financially fit?
I ask that because just like getting physical fit it takes a commitment that normally involves doing things that you would rather not do. Things like budgeting and asking yourself the hard questions. Cashflow planning on the farm and in the household is the first step that farmers are being asked to commit to in 2015.
Launching the initiative, Prof Gerry Boyle, Teagasc director, said it is vital to look at the overall income situation, as a drop in farm income means there are less resources to keep the household intact.
“This increases the risk of severe poverty and stress that is borne unfairly by farm women,” he added.
Minister of State at the Department of Agriculture Ann Phelan highlighted the importance that prudent financial planning has on income. She also said that additional credit at longer terms and more favourable rates is available from the new Strategic Banking Corporation of Ireland for the agricultural sector.
Minister Phelan had just come from the launch of the next step for LEADER funding and said that projects that got LEADER grants can use them as collateral to access loans, a major obstacle under the last programme.
As the event went on, the reason for why the campaign is needed became clear. Despite an overall increase in headline output and exports from the agricultural sector, farm income in some farm enterprises remains a serious challenge.
Fiona Thorne, Teagasc economist, highlighted that over one-third of all farm households could be considered vulnerable as they are not economically viable and they have no off-farm income, according to recent Teagasc research.
Based on data from the Teagasc National Farm Survey, the proportion of economically viable farms in 2013 was 35%. A further 32% of farm households in 2013 could be considered sustainable, but only due to the presence of off-farm income.
Being financially fit means families can start to look at how to improve income inside the farm gate and also how to go about looking for other sources of income outside it. Sarah Bourke, Social Justice Ireland, said a couple in rural Ireland needs €20,000 to live. A couple with two young children needs €30,000. This would be similar to what I saw from the families involved in Operation Cashflow over the years where little money was wasted.
Even the farmers that were making enough to pay a wage and give a return on the investment have to be financially fit to ensure they make the right decisions to keep it that way, particularly if they plan to expand. You have to get better before you get bigger – that’s the Teagasc mantra.
While there are huge opportunities with milk quotas going next week, we are heading into a time of increasing volatility and continued upwards pressure on inputs.
Convergence of direct payments will take from some farmers, mainly those who have had high production in the past, and give to others. GLAS, while welcome, will not replenish what has been lost from REPS.
It is easy for farmers to blame all their problems on the market and prices that are outside their control. However, that’s a bit like standing on the sidelines and shouting at the ref. To start getting financially fit you have to make the decision to get onto the pitch. That means you have to start to use the tools that are readily available.
When the financial toolkit was opened at the end of the day the message was clear. There was no magic wand. There were no new tools that will magically make you financially fit. The campaign is more about the lack of usage of the existing tools in the farming community.
It is about highlighting the benefits of what is actually there, dusting them off and using them. One advantage that was focused on was the cashflow planner. You can do it on paper or in a notebook if you want, said James McDonnell, Teagasc financial specialist.
He also encouraged the use of the Teagasc cashflow planner that is available for Teagasc clients – it will help make it easier and also gather the information needed for the other major financial tool, the eprofit monitor.
So if you really want to get financial fit in 2015, you should not just say, it but do it.
In brief
• Get Farm Financially fit is an initiative launched by Teagasc and stakeholders.• It highlights the importance of cashflow and long-term planning.• Visit www.farmfinanciallyfit.ie for more details. 
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