Flexible payment options for wheat growers
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With the wheat crop now coming off and prices at five year highs many growers are looking for ways to manage their cash flow through grain marketing products.
AWB’s Geraldton Zone manager David Cripps says while selling for cash at harvest is attractive, every business is different and some growers would prefer to defer when they receive payments.
He said growers who deliver to their Harvest Pool and choose the Deferred Distribution option receive their first payment in July 2019.
“As farm businesses are different, pool payment options may have tax consequences for your business so it’s important that you seek professional tax advice in relation to your particular circumstances,” Mr Cripps explained.
While deferring payment suits some growers, some growers want the majority of their cash flow upfront, but don’t want to lock down all their sales at harvest. This can be achieved through a harvest loan.
“AWB has reduced its variable loan interest rate from 3.5 per cent to 2.95 per cent offering a very competitive way to access funds,” he said.
“Growers who deliver to the Harvest Pool receive a loan of 80% of the Nominated Estimated Pool Return less costs, within 5 business days of delivery. The loan is then automatically repaid via pool distribution payments as the grain gets sold over the year.”
If you prefer upfront payments and less paperwork, you could also choose the Advance Payment option, he continued, this option works in much the same way as the harvest loan, but there is a fixed fee rather than monthly interest and there are no monthly loan statements.
Mr Cripps has been in the ag industry all his life. He farmed in the Geraldton zone, before going on to work with CBH before joining AWB. His mantra is to look after growers.
“That’s what I am here for,” he said.
Mr Cripps believes it is important that growers have choice of tools to help their business and get the most from their crop. This often means taking a diversified approach and ensuring all their eggs aren’t in one basket.’
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