Farmers need to plan their cash flows for 2007

Farmers need to start planning their 2007 cash-flow now, according to Ian Kenny, head of agricultural policy at NatWest bank.

Talking to Farmers Weekly at the Royal Show, Mr Kenny said he expected there to be fewer delays by the Rural Payments Agency in paying the next round of the single farm payment.

However, he said he was still not confident that this would happen until some time in 2007.

A large number of farmers who had taken out loans to cover the delay in the SFP had also been disappointed because they had overestimated the level of payments they were likely to receive, he added. “Some still have residual loans left.”

Mr Kenny said it was also apparent from speaking to farmers at the show, that many had still not even thought about changing their businesses sufficiently to cope with CAP reform.

 “They need to be thinking about things like what impact say a 20% increase in modulation in five years time will have.

“There needs to be a culture change. People look on their farming businesses as a way of life and something that is there for their families. That’s a good reason to farm, but there has to be a profit.”

Too few farmers were embracing management techniques like benchmarking or adopting looking after the environment as a mentality rather than a form-filling exercise, Mr Kenny added.

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