New investment by the Ministry for Primary Industries (MPI) is set to help enhance farmers’ financial risk management skills and prevent business failure.
MPI is funding the development of an innovative new programme, which will be piloted in six locations starting next month.
The Agri-Women’s Development Trust (AWDT) has been allocated $331,000 to research, design, and deliver the financial risk management training course.
“The primary sector is the backbone of our economy and it’s vital we ensure farmers and growers are equipped to withstand challenges facing the sector,” says MPI’s director of rural communities and farming support, Nick Story.
“This course will give them the skills, tools, and confidence to help make their agribusinesses more financially resilient. Farmers and growers can’t control the weather, commodity prices, or shifts in consumers’ shopping habits, but they can plan and prepare for change.”
Up to 130 people are expected to take part in the training course.
The AWDT’s general manager Lisa Sims says it will be piloted with sheep, beef, dairy, arable and horticulture businesses in the Hawke’s Bay, Manawatū, Canterbury, Otago, and Southland.
“The aim of the course is to empower farmers and growers to understand the different types of risks facing their business, and give them the skills to develop plans to manage the financial and personal implications of those risks,” she says.
Funding for the programme is part of a $1.15 million commitment in the 2020-21 financial year to reduce the risk of primary producers getting into financial strife.
MPI has earmarked $500,000 a year for 3 years to help enhance financial literacy and risk management skills, and a further $100,000 has also been allocated to the Farm Business Advice Support Fund to provide farmers with independent advice to help tackle farm debt.
“This fund is managed by the Rural Support Trust national council and has already been accessed by more than 40 businesses. It’s believed the support has prevented farmers from defaulting on loans and requiring the services of the Farm Debt Mediation Scheme,” says Nick Story.
The Farm Debt Mediation Scheme was launched in July 2020 and has an annual budget of $550,000 to help farmers and growers work through debt issues with their lenders.
“There have been 42 requests for mediation services through the scheme. Importantly, it has encouraged lenders to engage in conversations with at-risk clients earlier, avoiding the need for mediation,” he says.
Farmers and growers can request mediation at any time and hardship funding is available through MPI.