UFU propose measures to help with cash flow on farms
Friday, 28 November, 2014
The Ulster Farmers’ Union has met with Agriculture Minister Michelle O’Neill and proposed a range of measures that would help farmers across Northern Ireland deal with cash flow issues. UFU President Ian Marshall, UFU Dairy Policy Committee Chairman Jonathan Moore, and Dairy Policy Committee Vice Chairman William Irvine tabled the proposals at the meeting, which was organised to discuss the current milk market situation and how it is affecting Northern Ireland dairy farmers.
Speaking after the meeting, UFU President Ian Marshall said: “This meeting was an opportunity for us to highlight the current cash flow issues facing not only dairy farmers but also farmers in many other sectors in Northern Ireland, and to discuss what can be done to help alleviate some of the current financial pressure. In terms of dairy farmers, while we have continued to press for the introduction of usual EU market support measures, such as an intervention at a more realistic price level, it is unfortunately all too clear that the European Commission are reluctant to do so. We therefore discussed a range of more local initiatives with the DARD Minister, which could be utilised by farmers across all sectors, such as ‘capital holidays’ for structured loan repayments. Another option discussed was for increased awareness of the existing accounting practice known as “profit averaging”, where presently profits for two consecutive years are added together and divided by two but also extending this from the presently permitted two to a five-year period as was done in the recent budget in the Republic of Ireland. We also discussed the introduction of a Farm Management Deposit Scheme (FMD) similar to the one currently operating in Australia, where price volatility is also an issue, to assist primary producers in dealing effectively with fluctuations in their farm business cash flows. This would be a new scheme for the UK, allowing eligible primary producers to set aside pre-tax income in years of high income in a designated bank account from which they could draw down in years of low income and the tax becomes payable at that point.”
Ian concluded: “The Minister was receptive of our proposals and intends to take them forward. She also acknowledged that the banks have a significant part to play in helping farmers at this time. We have also written to the Northern Ireland Finance Minster on these issues, which will clearly be of benefit for all farming sectors across Northern Ireland if introduced.
“Cash flow management, discipline, and good forward planning at individual farm business level are also essential to minimise price volatility impacts. While many farmers are experiencing difficulties at present, there are opportunities on the horizon for our entire agri-food industry to grow and expand. In particular, the growing demand globally for dairy products remains and in the longer term the prospects for the dairy industry do look good.”
The UFU will also be meeting with dairy representatives from the other UK Farming Unions in Edinburgh on Monday to discuss the present situation.