Every farmer worries about economic conditions. Farmers often have assets but no cash, so they end up buying at full price and selling wholesale. Farm production expenses are climbing, but farm income is decreasing. As a result, many farmers are struggling to stay afloat and pay their existing debt.
Obtaining financing can also be challenging for farm owners. Lenders are concerned about market volatility, weather conditions, and other external factors. They worry the farmers won’t be able to pay the loans as agreed. As a result, farmers have limited financing options.
Their options are further reduced if they live in a rural area with limited access to broadband internet. The government acknowledges that farmers are barely able to make ends meet. Hopefully, it will make changes designed to benefit the industry.
Until it does, Rabo AgriFinance is ready to help. It offers financing for farmers and provides the following tips to increase the likelihood of a farmer’s success.
Track Finances
Farmers must carefully track their finances. Fortunately, tools are available to help them do so. Apps and other software can help them identify trends in their spending and make more informed financial decisions based on data rather than instinct.
Establish a Budget
Every farm needs an operating budget. Once a farmer begins tracking expenses, creating and adhering to a budget becomes easier. The budget ensures farmers don’t overspend in one category, leaving other areas short. Furthermore, the budget makes it easier to file and pay taxes accurately.
Grants
Every farmer should take advantage of grants whenever possible. Grants may be used to offset expenses or explore new initiatives. A farmer might use the funds to improve their marketing strategy or invest in the latest technology.
Technology
Farmers work the land and often have limited financial resources to invest in technology or the time to learn how to utilize it. However, they benefit significantly from integrating technology into daily operations. They can utilize the technology to stay informed about new trends that may benefit them or compare the costs of different farming methods to determine the most suitable one.
Conservation Easements
A farmer might benefit financially by protecting their land with the help of easements. Conservation easements may lead to tax breaks while securing the land’s future. The owner will know their land is being used for agriculture, and the easement will prevent developers from coming in and turning it into a tourist mecca.
The landowners can work with a conservancy, foundation, or other organization to create the easement. This easement may last for generations if the legal agreement is crafted correctly.
Create a Succession Plan
When a farmer passes, they want their land to go to someone who will love it as much as they did. The succession plan ensures it will. This plan may also outline what will happen to the equipment and other details. Farmers should consult with an attorney to create the plan and ensure their wishes are carried out.
Farmers often need financing to invest in technology or work with an attorney to create an easement or succession plan. They need a lender familiar with the agricultural industry. Grants can help secure funds, but farmers should utilize all available resources to their advantage. Learn more today about the methods outlined above that will help increase cash flow. Those who do find that their operations improve.
