It is often assumed that if an individual owns a farming operation, then they must be well off financially. After all, they own a good parcel of land and what they produce no matter what type of farming they do should be in demand. This may be far from the truth for many farmers throughout the UK.
Reliance on Off Farm Income
Many of the costs that are associated with farming can outweigh the profitability of the farm. Which places the farmer in a precarious financial situation? Not only does a farm need to generate enough money to sustain the farming operation it has to support the family. In many cases, the farming operation is not able to do this. Which means that the farmers may have to take on work outside of the farming entity. This creates an additional challenge as the farmer does not have the time to fully commit to the farming operation that is already struggling.
Too Much Work Not Enough Help
Another financial challenge that the farming industry faces is the workload compared to the available manpower. The problem is that farmers that are struggling financially cannot afford to hire the extra help that is needed to grow the farming operation. Without being able to grow the farm there is little chance of getting it past the just making do stage.
Fluctuations and Instability
It can be very difficult to get a farming operation stable in its finances. There are good times and bad times. Such as a good time when lamb prices are up for example. During this time farmers who are generating extra money often must reinvest that money back into the farm for much needed equipment repairs and perhaps new equipment. There is no opportunity to save the extra money for the lean times.