FARMERS heading for financial difficulties because of poor seasons or other factors should talk to their banker sooner rather than later.
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That's the advice of the head of agribusiness in NSW and the ACT for the National Australia Bank (NAB), Geoff Rose.
"If there's a major issue impacting on a farm, the quicker you can talk to your banker and work through the issues and challenges, the better," he said.
"The earlier we know the earlier we can assist - I can't emphasise strongly enough the need to discuss issues in the good times and the tough times."
Mr Rose said some farmers spoke to their bank virtually every week but some did it much less frequently.
Bankers understood farm production and incomes were subject to weather patterns.
"Farmers in our perception are becoming more sophisticated and are managing their businesses better than ever," Mr Rose said.
He said many farmers in NSW who had sold off livestock because of drought would be facing the need to finance restocking properties once the season broke.
Those farmers who had put money into the federal government's Farm Management Deposits (FMD) scheme would be able to draw down on that money for this purpose.
FMDs allow farmers to deposit surplus funds in good income years and only pay tax on any of that money in the year in which they withdraw it.
Mr Rose said the government had this year made FMDs available to more farmers by lifting the threshold of off-farm income above which farmers could not access the FMD scheme from $65,001 to $100,000.
"It's the perfect example of a tax effective saving," he said.
"It enables farmers to plan for the tough times."
He said the latest figures showed as at February this year there were 42,000 FMD accounts held by farmers throughout Australia with a total investment of $3.2 billion.
Despite the impact of drought on farm incomes in parts of NSW and Queensland, he expected to see more money deposited in FMDs than withdrawn this year, mainly because of good cropping seasons in South Australia and Western Australia.
Mr Rose said farmers looking to strengthen their business by expanding should consider leasing land.
"With the cost of assets leasing makes a lot of sense."
He said leasing was big in the USA where many farmers leased land from pension funds.
He believed it would be advantageous if that trend became more prominent in Australia.
"Influx of capital is a good thing for Australian agriculture, whether it comes from a local super fund or offshore."
Mr Rose said NAB had about 600 bankers at 110 locations throughout Australia ready to help farmers with their financial planning.
"Bankers are aware agriculture is a cyclical business," Mr Rose said.
"We are supportive of Australian agriculture and think it has a great future.
"We are investing more into agribusiness and are taking the long term view about the viability of the sector."
