Progress?

DrWazzock

Member
Arable Farmer
Location
Lincolnshire
Going back to the OP, he asserts that banks are cherry picking the most indebted customers as they are the most profitable.

So don't banks need depositors now? Maybe they can survive on printed money without needing the cash that savers pay in.

In my own experience, with no debts at the bank, just running a small balance in the current account to keep things ticking over, I do get the feeling they wouldn't miss me. But I still pay bank charges. Isn't this enough now?

I have often wondered what would happen if banks and other such service providers became really mercenary? The system would collapse as ordinary folk wouldn't be seen as a viable proposition to have a bank account. Not enough profit in it for the bank.

Is this what we are driving at? I'm slightly confused.
 

Spud

Member
Arable Farmer
Location
YO62
One needs to remember, @Walterp, that not every farms cashflow is as flat as say a pig or dairy Farmer.

When my father came here 30yrs ago, his new bank manager wanted to see flat cashflow forecasts. Father said that on arable farm, that's nigh on impossible. Still he was insistent. Father told him to bugger off and learn about the seasons of agriculture.

I have a simple rule re the overdraft. The figure matters not one jot, as long as the balance goes as high in the black as it does low in the red, I'll not worry.

There are many industries running with more debt and lower profit margins than farming, with less assets too. With that, and the fixed nature of farming (it's not like we can empty an industrial unit and do a moonlight flit is it!) farming is a far safer bet to a bank than many other professions.
 

stewart

Member
Horticulture
Location
Bay of Plenty NZ
Few farmers appear to grasp the link between the increase in agricultural lending and the increase in the value of UK farmland, though it is concomitant. Human nature, I guess: all enjoy seeing their assets increase by value, fewer enjoy exploring the underlying mechanism that makes this possible.

But it gets worse: more and more, we see farmers complaining that their banks 'don't understand farmers' when, to my mind, banks understand farmers all too well - what is the reduction of specialist agricultural managers, and the cherry-picking of only the most 'profitable' (aka the most indebted) farming customers, but a gradual retreat from the agricultural market?

With, of course, obvious implications for UK farmland prices.

I reckon banks understand English farmers better than they understand themselves. Here are a few facts and figures from DEFRA which suggest their own conclusions:

1. The average English farm debt is £150,000 per farm;

2. Ten percent of all farms have liabilities of £400,000 or more and therefore would require consistent income flows to ensure that interest on borrowing can be paid.

3. Back in the day fewer than half of all farms carried any debt, now just over a quarter of farms have liabilities of less than £10,000.

And now interest rates are rising....
I am not sure how accurate your figures are,they look low to me. There would be numerous families with mortgages on a family home higer than your figures and they do not have the asset backing of a farm.
There should be nothing to be concerned about unless the business cannot service the debt, if it cannot do that at the low debt levels you are quoting then with land values at a high level maybe it is time to sell up and move on.
 

beefandsleep

Member
Location
Staffordshire
If English farm debt per farm is 150k, what is it for Scotland and Wales?

Don’t be ridiculous. Welsh and Scottish farmers are far too sensible and prudent to ever carry any debt. Don’t you realise interest rates are on the rise and all the foolish English farmers will go bust? Serves them right for their own greed. They all covet their neighbours acres you know, and have to have a newer or bigger tractor. It could be down to the incredibly small size of their manhoods. Fortunately Welsh farmers are extremely well endowed and so do not suffer from feelings of inadequacy leading them further and further into debt as they try to compensate.
 
What about Honda finance - Have Once, Never Did Again?

It is usually simply keeping up appearances, I would venture....?

Sure, debt can be viewed as just another farm input, but the best inputs are free IMO


Banks run on love??? :eek::eek::eek::facepalm: What next , you'll be telling me you don't watch the ice hockey on TV at home or the bar?:rolleyes::banghead::D
 

stewart

Member
Horticulture
Location
Bay of Plenty NZ
The English are, undeniably, very sensitive...

It's enough to get (some) going , just by mentioning that they are, in fact, 'English.' They should, perhaps, just accept this and move on with their life - it's not my fault that they are as a nation both dissatisfied and angry.

Anyway, I focused on DEFRA's stats because they are the most topical, and available. Farm structure is rather different in Scotland, for several reasons, and debt averages are harder to find. Wales ditto*. *Anyone who can find these stats is welcome to put them up for discussion.

The Prince's Trust says farm borrowing across the UK has more than doubled 2006-2015 (to £11 billion) and in 2017 it reached £18 billion. Those facts speak for themselves.

Much as I disagree with my former neighbour on many topics, this is not 'progress', folks. It is merely the illusion of it.
Why do you consider it an illusion? It may be ok for a farmer who is born with silver spoon in his mouth to decry debt but how is a young person starting with nothing supposed to get ahead?
I fail to understand the stigma around debt. My views maybe slightly tainted by only ever having been debt free once,which was something I had been looking forward to since I was 18. I found it boring and within 6 months loaded the debt levels back up, debt is a great motivator.
 

Clever Dic

Member
Location
Melton
The English are, undeniably, very sensitive...

It's enough to get (some) going , just by mentioning that they are, in fact, 'English.' They should, perhaps, just accept this and move on with their life - it's not my fault that they are as a nation both dissatisfied and angry.




@Walterp
It appears your joy for life is positively spreading from your upbeat self.
Screenshot_20180615-205409.png
 

beefandsleep

Member
Location
Staffordshire
The English are, undeniably, very sensitive...

It's enough to get (some) going , just by mentioning that they are, in fact, 'English.' They should, perhaps, just accept this and move on with their life - it's not my fault that they are as a nation both dissatisfied and angry.

[emoji23][emoji23][emoji23][emoji106]
I really did laugh out loud.
Brilliant Walt.
 

Hilly

Member
One needs to remember, @Walterp, that not every farms cashflow is as flat as say a pig or dairy Farmer.

When my father came here 30yrs ago, his new bank manager wanted to see flat cashflow forecasts. Father said that on arable farm, that's nigh on impossible. Still he was insistent. Father told him to bugger off and learn about the seasons of agriculture.

I have a simple rule re the overdraft. The figure matters not one jot, as long as the balance goes as high in the black as it does low in the red, I'll not worry.

There are many industries running with more debt and lower profit margins than farming, with less assets too. With that, and the fixed nature of farming (it's not like we can empty an industrial unit and do a moonlight flit is it!) farming is a far safer bet to a bank than many other professions.
Interesting, can you give me some examples ?
 

Spud

Member
Arable Farmer
Location
YO62
Interesting, can you give me some examples ?

Haulage been the one I have first hand experience of. Have a few minutes on www.companycheck.co.uk - Some machinery dealers are doing very well indeed, some the opposite. Its not always the big and shiny stacking up the profits either! There are some shops in the retail world fit the category too - you know the drill - expensive rented premises in town, lots of internet competition, lots of staff to pay, restricted trading hours, smaller margins, few assets.

There are many farmers (many) who have a solid 52weeks work a year, and rarely drop below 60hrs a week. There are also lots of pure combinable arable farms (no stock, roots or veg) with very little work for half the year. Divide your income across the hours you actually spend working, its not as bad as some make out.
 

Kiwi Pete

Member
Livestock Farmer
everyone is racist to a degree
Quite.
Especially people from other races !:rolleyes::ROFLMAO:

One thing for sure, we all carry prejudice of some sort... some wear it with pride....

It isn't a bad thing, we just need to be self aware enough to recognise it, and ask ourselves if it is rational or not.
Lots of livestock farmers do the same, I was also lambasted for making that suggestion.
..... because it is seen as progress!!!!

I often allude to similar.... but I don't think the English who can be singled out as sensitive, few really appreciate other perspectives and counter with justification and excuses... if only excuses had a market :whistle:

I have concluded that most farmers are quite happily enslaved by their lenders, or input suppliers, and are enthralled by the opportunity to intervene because it gives them purpose (or the illusion of purpose).

I often question (quietly) the other illusion: that of being self - employed.....
:facepalm:

It all seems to be a race to go off the waterfall, to me.
Collapse of society is almost inevitable.
 
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Red Tractor drops launch of green farming scheme amid anger from farmers

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As reported in Independent


quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

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