Financial challenges facing farmers in Northern Ireland

I always remember the fear sitting in my office in Fermanagh House on a Friday afternoon, during my time in the Insolvency Service, wondering if the Bankruptcy list would come over from the Courts and include a case of a trading farmer.

The inevitable panic that set in when that happened was tangible, on the phone to agents, DAERA and anyone who would listen as I tried to ensure that the social plans made for the Friday evening remained intact, and that I could relax safe in the knowledge the animals were secured, and insured, in case they decided to try and stray.

It has been a long time since I have seen, or indeed heard of, a farmer going bankrupt. Undoubtedly a product of the Covid hangover which saw the numbers of insolvency cases plummet, and to date remain at a very low level. Anyone in the industry knows however that the farming sector, perhaps above all, struggle to deal with financial problems in a direct and efficient manner.

For farmers it is not just about money though. It is about the family history of the lands their forefathers worked, it is caring for the animals every hour of the day and indeed the dread of facing the reality of having to stop doing something they love.

I do not claim to know the intricacies of farming life, but I am fortunate to be involved in a football club nestled in the green pastures of Glenavy and have many friends in that particular farming community. It was only recently through a very normal conversation that the ever-evolving challenges to farmers in NI really hit home.

The exorbitant inflation of recent times has protected dairy farmers in particular from the real impact of increased energy costs but all of that is changing very quickly. In September 2023 the Northern Ireland average farm-gate price of milk was 31.52 pence per litre, 17.0 pence per litre lower than September 2022 and very close to pre-Covid prices. The value of dairy cows also around 50% of value compared with the same time last year.

The beef industry as well has faced real challenges with increased Bovine Tuberculosis resulting in greater holding costs and cashflow pressures that have come with the inability to move stock until they get the all clear.

The greatest worry has to be that those who need financial help just bury their heads in the sand. I have witnessed it too many times in the past, but those who have come to me for insolvency advice can see light at the end of the tunnel, and it is evident the relief that they feel knowing that there is a solution.

I have been involved in many different scenarios, preparing Individual Voluntary Arrangements (IVA’s) for sole trading farmers to avoid bankruptcy, trading a dairy farm through bankruptcy to allow a sale to a family member and protecting the business in the process. There is always a solution if farmers get the right advice.

The teeth of HMRC are beginning to bite post the Covid ‘kid gloves’ approach to their debt. The last few months have showed on the Company side how debt collection is very much on the agenda of the Government as purse strings tightened and they look to claw back Covid expenditure.

Insolvency is such a specialist area and early, trusted advice is what I believe Keenan CF can offer to anyone in difficulties, particularly in this sector. I have a responsibility as an advisor in the Agri sector, to ensure that this vital part of our heritage and culture does not suffer unnecessarily from the challenges ahead when good advice could make all the difference.

Thomas McKenna is a director of Keenan CF's Personal Insolvency department and a former Deputy Official Receiver for Northern Ireland. Thomas can be contacted at [email protected] for advice or information.

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