The business of farming is a constant process of decision making. While decisions can be made on instinct, taking time to thoroughly consider the decision prior is generally more valuable and profitable.

Farmers consider numerous factors including weather conditions, soil quality, market demand, financial resources and environmental sustainability when making decisions.

How we make decisions:

There are many ways people tackle decision-making but generally it comes down to three approaches or a combination of these:

1. The head:
   This is the logical approach to decision-making, where information is gathered, analysed and processed rationally.
2. The heart:
   This is the emotional aspect of decision-making. It includes a farmer’s beliefs, values, fears and preferences. Sometimes these feelings (like a strong connection to the family farm) are deeply entrenched, making it hard to apply other approaches.
3. The gut:
   This is intuition, which is shaped by knowledge and prior experience. It usually bypasses rational processes by linking past experiences (good and bad) with the present. Intuitive decisions often “just feel right”.

How to make better decisions:

There are several strategies you can employ to enhance your decision making:

1. Be prepared: allocate sufficient time to thoroughly asses the decision at hand.
2. Identify key variables: Focus on critical factors and avoid being swayed by non-essential ones.
3. Utilise available tools: employ methods such as creating pros and cons lists.
4. Seek expert advice: listen to experts to broaden your perspective but make decisions based on your own judgment.
5. Establish a clear purpose and business goals: align decisions with your purpose and objectives, remain consistent with your vision and mission.

Effective decision making is crucial for successful farming. By understanding your decision making styles and employing structured strategies you can approach challenges with confidence and work towards achieving your goals more effectively.

“The most valuable aspect of the support our RFC gave us was that he broke down where we were in our life cycle and what our options were which helped us make our decision to sell the farm and retire.” Geoff, Broken Hill.

Remember that you don’t have to navigate complex decisions alone. RFCS NSW offer support and guidance tailored to your unique circumstances. Engaging with others can provide valuable insights and help you make more informed choices. To speak to your local Rural Financial Counsellor and access the services of RFCS NSW call 1800 319 458.

As we approach the end of the financial year, now is the time to review your farm business and ensure you are on track for success. The Rural Financial Counselling Service NSW is a professional, confidential and free financial counseling service that can help you improve your farm business, whether you are planning for growth, succession or sale. There are many services and support that our team can provide to assist farmers. 

One of the best ways to maximise the efficiency of your farming business is with a thorough business review. This in-depth review will provide you with valuable insights into your current performance, identify areas for growth and highlight future opportunities. By reviewing, you can make informed decisions that lead to long-term success, identify new opportunities and mitigate risks.

Bank reviews are another important aspect of maintaining a healthy business. They serve as a financial health check, helping banks understand their risk and ensure you can continue servicing your debt. While these reviews can be stressful, RFCS NSW makes the process as smooth as possible by offering support and guidance every step of the way. 

Setting clear goals is crucial for any farming business. Goals provide direction, keep you focused and drive your strategic decisions. Whether you are setting short, medium or long term goals, we can help you define a clear path for your business and your life.

A business plan serves as a roadmap for a business. It guides you toward your goals by analysing factors like your business's purpose, target market, competition, strengths and weaknesses, opportunities and threats (SWOT). Just like a map helps you avoid getting lost on a trip, a well-developed business plan minimises uncertainty and helps you navigate challenges effectively.

Farm budgeting, particularly cash flow budgeting is essential for understanding the financial impact of your on-farm decisions. Despite the unpredictable nature of farming, having a cash flow budget is critical. RFCS NSW can help you create an accurate cash flow budget, understand your farm's cash position and anticipate best, worst and average cash outcomes. Ensuring that your farm income covers all running costs and produces a profit is key to maintaining and growing your business. A profit target helps determine the size and type of business needed to meet your income requirements, repay loans, pay taxes, reinvest and cover living expenses.

Making decisions in farming involves evaluating different options to select the best one to achieve your goals. Factors like weather conditions, soil quality, market demand, financial resources and environmental sustainability all play a role. RFCS NSW provides tools and techniques to make decision-making simpler and more effective.

Succession planning is all about creating a strategic roadmap for smoothly transferring the farm business and assets from one generation to the next. RFCS NSW plays a crucial role in facilitating this process, ensuring a harmonious transition.

Risk management is about identifying and managing the inherent risks in farming. Whether the outcomes are positive or negative, RFCS NSW helps you handle these risks effectively, preparing your business for any eventuality.

Accessing government support can be overwhelming but RFCS NSW is here to help. We assist you in understanding what assistance you might be eligible for, explain different loan interest rates and help you consider long-term business changes to improve your financial position.

For more information, please click below to access our “Unlocking Success” booklet which contains tools and tips for your farm business. To speak to your local Rural Financial Counsellor and access the services of RFCS NSW call 1800 319 458.

The below article is written by CEO of RFCS NSW, Craig Hough.

On the 18 June 2024 the NSW Treasurer the Hon. Daniel Mookhey MLC released the NSW Budget 2024-25.

The Budget is based on a relatively stable economic outlook. Gross state product (GSP) is forecast to hover around 2% over the forward estimates. This is a slight increase of 0.5% from 2023-24. Similarly, the unemployment rate is forecast to stay between 4 and 4.5 per cent over the forward estimates. Inflation, which has been the central problem for the Australian economy, has declined from a peak of 7.6 per cent (Sydney CPI) in the December quarter 2022 to 3.7 per cent in March quarter 2024. Weak growth in demand is expected to continue to move inflation downward to the Reserve Bank’s 2-3% target range in mid-2025. It is when this occurs the Reserve Bank is likely to start lowering interest rates.

Against this backdrop the NSW Budget prioritises cost-of-living relief (around $8.7 billion in 2024-25), infrastructure ($119.4 billion over four years) and bolstering essential services like healthcare. These respond to substantive issues across the economy – high cost of living, asset maintenance and upgrade requirements, housing shortage, school performance and emergency response times. Over the longer term there is an acknowledgement that improving productivity is critical to future economic growth. Specific Budget measures likely to have a direct impact on RFCS NSW clients are:

1. $351.4 million from the Australian Government for the Sustainable Diversion Limit Adjustment Mechanism acceleration program over the years to 2026-27, to achieve similar or improved environmental outcomes for rivers, wetlands and wildlife using less water as part of the Murray-Darling Basin Plan.
2. $212.2 million for Wagga Wagga to be a sustainable hub of high-value agricultural and food manufacturing, supporting industries and businesses to connect to the world.
3. $189.5 million for Fire and Rescue NSW to permanently maintain 286 ongoing firefighter positions, approximately 70 of which are based in regional areas.
4. $100 million increase to the energy social program in 2024-25 to support up to 1 million NSW households with energy bill relief. This increases total program expenditure to $435.4 million in 2024-25 and is in addition to the Australian Government’s $300 energy bill relief payment.
5. $89.8 million over four years in water rebates to eligible pensioners and others experiencing financial hardship, to maintain access to water and waste-water services in the Hunter Valley and Far West NSW.
6. $55.3 million for the eradication of red imported fire ants
7. $45 million to support farmers and agribusinesses in the adoption of digital technology and on-farm connectivity solutions, to improve resource management, boost productivity and enhance water security.
8. $39 million to establish a new Mental Health Single Front Door
9. $36.2 million to increase the resilience and capacity of beekeepers, horticulture and other industries in managing Varroa mite incursions
10. $25 million to support specialist scientific skills to boost the State’s frontline surveillance and preventative capabilities to defend against biosecurity risks
11. $21 million to establish a modern, fit for purpose animal welfare framework
12. $13.1 million for the continuation of the Feral Pig and Other Pest Management Control program
13. $10.4 million for the Weeds Action Program to reduce the impact of weeds through the implementation of the NSW Invasive Species Plan and the NSW Biosecurity Strategy
14. $6.2 million to target White Spot disease, supporting prawn fishers, farmers and businesses
15. $5.8 million to continue implementing the Good Neighbour Program to tackle weed and pest infestations between neighbouring public and private lands
16. $5 million to provide low-interest loans to eligible small and medium businesses to encourage economic growth and employment in regional NSW

The Budget records a deficit of $3.6 billion in 2024-25. This is a decrease of $4.1 billion from the $0.5 billion surplus projected in the 2023-24 Half-Yearly Review. While taxation revenue has been revised up by $9.6 billion over the forward estimates since the 2023-24 Half-Yearly Review (due to a strong NSW property market providing more transfer duty and land tax) changes to GST distribution, weaker payroll tax, higher depreciation and interest costs and new expenditure announcements are driving the change. Budget deficits are forecast to continue on a downward trend over the forward estimates to a $1.5 billion deficit in 2027-28. These deficits are forecast to add to the state’s record public debt. In 2024-25 gross debt is forecast to be $166 billion or 19.3 per cent of GSP. This is forecast to increase each year over the forward estimates to $199 billion or 20.3 per cent of GSP in 2027-28.

Navigating the Farm Household Allowance

On 1 July 2024 a new 10-year period for the Farm Household Allowance commenced. This Australian Government program provides assistance to commercial-scale farmers and their partners who are experiencing financial hardship for any reason. The allowance can be accessed for up to 4 years at any time over a 10-year period. The start of the new cycle means those who exhausted their 4 years in the previous cycle can now re-apply.

What is the Farm Household Allowance?

The farm household allowance is a government initiative designed to provide financial support to farming families who are experiencing financial hardship.

1. Income support: Fortnightly payments to help meet everyday living expenses, this support is provided for up to four years over a ten-year period (this doesn’t have to be consecutive years).
2. Farm financial assessment: Professional advice to understand the financial position of the farm business.
3. Activity supplements: Up to $10,000 for activities that enhance financial self-reliance such as training, business planning or professional advice.

Changes for Farm Household allowance:

• The new 10-year period started on 1^st July 2024, and some new changes have been put in place.
• Income requirements have increased, you must now prove that your commercial business has a gross income of $60,000 per year and be able to show financial records for the previous three years.
• It has been confirmed that the activity supplement is a lifetime amount, and farmers will not be able to reset this every 10 years.

Who is eligible for Farm Household Allowance?

• Farmers and partners of farmers
• Australian residents living in Australia
• At least 16 years of age
• Farmers experiencing financial hardship, which means your income and assets are not sufficient to meet your basic living needs
• If you are experiencing a loss or are breaking even, consider applying for FHA.
• Applicants must meet income and asset tests. These tests assess the financial situation of the farmer and their partner.

Benefits of the FHA:

1. Financial relief: Helps cover essential household expenses during tough times.
2. Professional advice: Access to improve the farm's financial situation
3. Skill development: Opportunity to undertake training and activities to enhance skills and farm productivity.
4. Planning for the future: Encourage long-term planning and sustainability for the farm business.

The Rural Financial Counselling Service NSW offers free, confidential support to help you plan for the future. Accessing government assistance can sometimes feel overwhelming, but support is available to help you understand the process and discussing with your local RFC can a great first step. RFCS NSW is a not-for-profit organisation with a goal to strengthen communities by helping farmers be prepared, responsive and sustainable.

Call 1800 319 458 to contact your local Rural Financial Counsellor today.