Primary producers urged to take a long term approach

Andrew Bowcher

Andrew Bowcher

A CONSTANT news cycle of coronavirus woes and subsequent job cuts can quickly paint a negative picture however, one of Riverina/Murrays leading Reconstruction and Advisory Professionals says the outlook for agriculture is positive.

RSM Australia partner Andrew Bowcher said he has received plenty of phone calls from primary producers in recent times as they try and navigate the complex times.

"The agricultural sector seems to holding its own with good rain in the last few days, the outlook for eastern Australia is positive for growers," he said.

While agriculture is well positioned at the farm gate Mr Bowcher explained that issues arising from the COVID-19 pandemic were providing challenges with the availability of inputs and supply chain concerns.

KEY POINTS FOR AGRICULTURE:

  • Stay up to date and work with your existing advisers including available financial counsellors to prepare a cash-flow and look at your future income and expenses.
  • Negotiate, if necessary, with a view to revised and delayed payment terms with suppliers, banks, finance companies, Australian Tax Office, State Revenue office.
  • Finalise hardship applications and utilise linkages to Government and associated support initiatives.
  • Consider business reviews, restructuring, downsizing and industry consolidation guidance.
  • Conduct urgent structure and risk reviews to understand any gaps particularly in terms of individual Asset Protection and Succession strategies.
  • Consider debt negotiation, settlement and long-term agreements if required.
  • Assist in resolving any lingering commercial disputes.

There were also fears about the supply chains including machinery dealers and rural suppliers, banks and the associated mental health toll plus well-being given the change in how business is being conducted.

For those primary producers who rely on investments, or deposit schemes, which may not be performing well in the current climate Mr Bowcher's advice was to talk to Regulated financial advisers and take a long term approach.

"Make smart, informed decisions rather than relying on panic or emotion which can lead to hasty reactive decisions and potential longer term issues," he said.

Business operators were also encouraged to investigate the assistance available such as the job keeper package.

"Currently the real benefit to agriculture is to try and assist in keeping community businesses operating," he said. "If community businesses operate and service during this period then there isn't a significant knock-on effect," he said.

Those effects could be dire down the track if people moved from communities and resulted the number of people to support schools, medical services and food outlets.

He said it was important to note that at present most government initiatives did not cover or fully assist employers with overseas workers and the availability of seasonal staff.

MORE READING: