Finances: Labour, Diversification and Financial Planning

Theo got the session going by making the point that a farmer is more likely to lose his farm to his neighbour instead of the government as commercial farmers continue to become bigger and bigger.

 

Jannie agreed to an extent but added: “It’s also market forces, exchange rates and climate conditions. South African farmers have a reputation for adopting new technology very quickly and precision farming has helped us to survive during the drought for example. But I think we do need to up our game when it comes to the marketing and financial planning of running a farming business.” 

 

Marelize weighed in saying that financial planning was vital to the success off any business. “Producers really need to make the time to plan ahead and to address issues like capital gains tax and Estate tax which can have a huge impact on family business especially.”

 

Pieter said that although the agriculture sector was in R45bn debt, “the debt relationship is at an acceptable level.”  He added that producers had to spend their money on realistic things and diversify smartly, knowing and planning for the risks that came with diversification.

 

On family businesses Pieter said communication was key. “What we often find is that family members do not talk to each other and when the father dies, the testament can sometimes not been executed due to conflict.”

 

Johan re-emphasised that financial planning was important “as it brings all the aspects together that affects your business and enables you to see where the risks and opportunities are.”

 

Jannie said a mind-set change was necessary on the marketing side: “We need to realise that the grain marketers are  not our enemies and invest in fostering relationships with them and do proper planning in this regard.”

 

The series celebrates its fourth year being broadcast from Nampo and has seen the conversation on the importance of agriculture being widely spread via various mainstream media outlets such as KykNet, 702/Cape Talk, Soweto TV, Business Day TV and many others. The series is also available via YouTube. Download the Nation in Conversation App at www.nationinconversation.co.za to join the conversation and to access the full broadcast channel where you can watch this entire episode.

 

Ends.