Managing budget during dry times

26 Jul, 2001 07:12 AM
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LOOK after the pennies and the pounds will look after themselves - an adage that will ring true this season as farmers throughout the grainbelt endure budgetary pressure.

Budget scrutiny will be crucial this year, as farmers manage reduced incomes as well as increased livestock feeding costs.

The Department of Agriculture has drawn on information provided by consultants Falconer Hackett in 1999, which was used to address similar financial pressures due to frost, to prepare a budget checklist

The checklist is designed to assist farmers to plan their budget and property management over coming months.

Farm management adviser with the department Allan Herbert said the key was to try and create a balance between income and expenses.

"Don't worry about expenditure so far, they are sunk costs and you can't do anything about them, so just worry about the expenditure you are about to make," he said.

"Make sure you know your financial position inside-out, so you can plan and compare budget options and review and revise your plans as circumstances change. And don't forget to communicate with your lenders, they have a vested interest in working through this situation with you."

The checklist identifies some key factors to take into account when making decisions about income and expenditure.

DRY SEASON CHECKLIST

Income:

*asset sales - sell any carryover grain, fertiliser, chemicals, wool and surplus equipment

*off-farm income - other work opportunities

*off-farm assets - can they be re-arranged to provide more income relative to growth

*draw on farm management deposits

*forward pricing risk management

*access assistance schemes

Expenses

* reduce wages costs - work with neighbours, friends

* abandon paddocks or crops that will cost more than they are worth

* compare supplementary feeding with agistment or selling stock

* purchase sprays on an as-needs basis

* rates - discounts for early payment

* defer capital improvements

* plan for quality seed next year

* reduce telephone calls, subscriptions, bank fees, household expenses etc.

The complete checklist will appear in upcoming AGMEMO publications.

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