Workshops help South Island farmers focus on financial literacy
Mark Hawkins, chairman of the Upper South Island Rabobank Client Council, wants farmers to increase their financial efforts. He runs a cattle and agricultural farm in Pleasant Point. Photo / Rabobank
South Island farmers are advised to closely monitor the internal finances of their agricultural businesses.
This is the message sent to them in the face of market fluctuations linked to Covid-19 and geopolitical tensions which are disrupting the production and supply of agricultural products.
A series of financial skills workshops in Timaru, Christchurch, Ashburton and Nelson, organized by the Rabobank Customer Council, was well attended last month.
Farmers and young professionals attended sessions on financial skills, reading financial statements, key ratios and calculations, and what banks look for when valuing a farm business.
Upper South Island Customer Council Chairman Mark Hawkins said there was a real need for farmers to improve their financial literacy.
He said it was not enough for farmers to go to their accountant once a year to ask how much tax they had to pay.
“We’re trading cattle and just at the moment it’s all up in the air,” the Pleasant Point cattle and crop farmer said.
“We have problems with navigation, works are struggling with Covid-19, there is drought in Southland and flooding on the east coast of the North Island. There is so much variation and there just keep your finger on the financial pulse.”
Hawkins said farm values had risen and farmers were now running very large businesses.
“You also need to be bankable. If you want someone to invest in your business, you need to be able to run that business… Customers’ financial literacy will affect your attractiveness to the bank.”
Farmers needed to know their balance sheet, profit and loss position, inventory reconciliation, and business basics. Even farmers with business degrees could pick up bad habits and needed to brush up on their financial skills, he said.
The Client Council runs other programs such as Growing Future Farmers – a two-year training course for graduates with specialist training and development in the agricultural industry.
Other initiatives include Ag Pathways workshops for young people and the Horowhenua Taste Trail to help bridge the urban-rural divide.
Until the arrival of Covid-19, the Upper South Island branch focused on a Food X initiative to encourage children – especially those in cities – to embark on a career in agribusiness. Young children stayed at Lincoln University for four days and visited farms and agricultural businesses.
Hawkins said those programs and other community projects were funded by the bank, including a $50,000 donation for the recovery of those affected by flooding in May last year.