AGRICULTURE NEWS - Almost every business experiences financial difficulties from time to time. Farming operations, however, face greater risks than many other businesses, which makes it even more important for farmers to stay on top of their game.
Theo Rabe, CEO of agribusiness NWK, explains that farming returns are significantly lower than for most other businesses, averaging between 5% and 7% depending on the commodity.
To make matters worse, farmers are price-takers, with little or no influence over the market. So a poor yield is not necessarily compensated for by a better price.
In addition to this, farmers have to cope with changing climatic conditions, and recent times have seen more droughts, changes in rainfall patterns and extreme weather phenomena.
To shield their businesses against these challenges, farmers should, first of all, be aware of their financial situation. According to Rabe, many do not have a clear idea of their income and expenditure.