Farmers need to adapt fast in a high-rainfall season like the one we have just had, says Groenewald. A changed environment will almost definitely have an impact on cash flow, and farmers need to communicate with their banks or financial institutions about alternative strategies. <\/p>\n

\u201cIt\u2019s common knowledge that most of the inputs are financed by banks and other commercial institutions like the co-ops. Farmers need to inform them of altered plans so that they can keep abreast of developments,\u201d he says.\u00a0<\/p>\n

From a crop-cultivation perspective, a wet season is better than a dry season, and farmers can adapt more easily in a wet year than they can in a year of drought, Groenewald explains.\u00a0<\/p>\n

\u201cAt an early stage, when farmers start changing their plans, they should inform their banks. A change in crop can mean a change in costs, so the finance guys must know about it,\u201d he says. <\/p>\n

He points out that a switch, for example, from maize to sunflowers will mean an adjustment to the time of harvest, resulting in the cash coming in later. \u201cAll the stakeholders must be on board with this,\u201d Groenewald adds. Communication is critical when farmers are dealing with their lenders, and keeping the banks informed does make a difference.\u00a0<\/p>\n

The commercial institutions provide credit to a diverse agricultural sector and are up against challenges of their own that are not insignificant. <\/p>\n

While the sector\u2019s appetite for risk is said to be small, farming is inherently a fairly risky business and most of the country\u2019s farmers are financed by commercial lenders. It certainly makes good sense for farmers to take their lenders with them on a journey of change.\u00a0<\/p>\n

For more information on Standard Bank visit www.standardbank.co.za<\/strong><\/a><\/p>\n<\/p><\/div>\n

\n
Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"