Whilst coronavirus has proved to be a major distraction, both to us and politicians around the globe, we continue to move speedily towards the end of the transition period on 31 December 2020.. Yet many farmers haven’t started to prepare and there are many reasons you might recognise:
- I don’t know enough to plan – what exactly am I planning for?
- The impact won’t come immediately, there’ll be time to work out how things will pan out.
- I’m committed to farming, things might not be as good as they are now, but I’m intending to keep going regardless.
- I don’t have that many options, I can’t afford to do something else or spend money preparing, I’m going to have to keep going and hope things work out ok.
- The government will come up with something, they can’t let farmers go to the wall.
- Brexit will bring opportunities in my sector, I don’t need to plan for challenges!
However, even if you feel that there’ll be a bump in the road and then things will settle out, you need to be clear that you can weather that bump. You might see opportunities arising from brexit, in which case you need to plan now so that you’re in a strong position to take advantage of those opportunities. A plan needn’t be a complex document. The following questions will get you started. Jot down your response in the box opposite – and this then is the basis of your Brexit plan.
|Over the past three years has the business been sufficiently profitable to meet your needs, i.e: Have you had sufficient funds to invest where needed?|
Has there been sufficient cash to meet finance repayments comfortably?
Has there been enough cash to satisfy your need for drawings?
If not, what can you do?
|If your income (from whatever source) was reduced significantly (10/20/30%+), would you still be sufficiently profitable to answer ‘yes’ to the questions above? For how long could you cope with that reduction in income?|
|Do you rely on goods imported from within the EU? How far in advance do you typically order? If there were delays in getting these products into the UK how would that impact you? What steps could you take now to reduce that impact?|
|When it comes time to market your produce, if a major EU market were disrupted (i.e. temporarily unavailable) what would you do with the stock/crop? |
Have you feed/storage space on farm to hold stock if you had trouble getting them/it away?
|Do you have some ‘wiggle room’ in your cashflow? If some of your sales were at a significantly reduced price, could you cope in the short term? If you had to delay selling produce for 2, 4, 6+ weeks would this cause a cashflow problem? How much additional borrowing might you need to allow for this?|
|How vulnerable would you be to a problem elsewhere in the supply chain. If an abbatoir or processing facility were to close, where would your stock go? What would be the risk that you’d not be paid for stock? Are there steps you can take to reduce this risk?|
|Brexit will present opportunities. What might these look like - are you in a position to recognise these? What’s you longer term aim? Have you the resources available to capitalise on these (e.g. cash) opportunities?|
The Farm Advisory Service can fund one-to-one support of up to £1,000 to help with the cost of the planning exercise, go to www.fas.scot/specialist-advice/
Using the funding in this plan a consultant can review your existing business and help to you understand whether you are sufficiently profitable already, how well you’d weather any Brexit impacts, and what practical steps would be worthwhile to be as ready as you can be.
Sign up to the FAS newsletter
Receive updates on news, events and publications from Scotland’s Farm Advisory Service