Patrick Butterly, Agri Advisor AIB, advises the best course of action to take if cash flow difficulties are experienced or anticipated.
While the medium to long term outlook for the agri sector remains positive, 2012 is proving a difficult year for the Irish farming sector, caused in the main by the relentless wave of adverse weather conditions that persisted through the late Spring and Summer months. This resulted in reduced crop yields and quality, poor animal thrive, fodder shortages and is coupled with a fall in milk price and an increase in input costs, particularly feed. The likely result is a drop of over 20% in overall farm income compared to 2011 and this will impact on cash flow on some farms.
The difficult weather conditions and associated implications are likely to impact on cash flow for some farmers. We understand that the cash flow difficulties currently experienced, are in the main, largely short to medium-term in nature and we are encouraging our customers who may be experiencing, or expect to experience, short term cash flow difficulties to make early contact with their local AIB branch. No one solution will suit all farms and the bank is working with farmers on a case by case basis to find an appropriate solution to suit their farm.
When approaching your bank to discuss short term cash flow pressure, it is important to arrive prepared. Be honest, thorough and vigilant in evaluating your present situation. Identify the cause of the problem, establish how long it will last and determine the level of additional working capital you need to get through this period. It may be necessary to prepare cash flow projections for a 6-12 month period and bring a copy of the latest set of financial accounts. It may be beneficial to enlist the help of a consultant, Teagasc advisor or accountant. A cash flow projections template is available on our website at www.aib.ie/farming which may be of use. If your situation is urgent please advise your branch and they will prioritise your request.
AIB is aware of the cash flow difficulties currently experienced by many Irish farmers, and recognises that the medium-to-long term outlook for the sector remains promising. Our advice to those experiencing difficulty is to talk to their bank as early as possible. When meeting with your bank take time to prepare and bring the appropriate information to support your case. Early contact should facilitate the bank and customer, working together to arrive at the most appropriate solution.
Allied Irish Banks, PLC is regulated by the Central Bank of Ireland.