Farmers are shooting themselves in the foot

Over the past few months, I’ve been driving around a lot looking for investment opportunities in the farming industry. In the process I discovered something I’d never realised before in all my years of involvement in agricultural risk management. It’s strange how something that you know suddenly acquires new meaning when the penny drops.

Very few farms are investment material, which is actually shocking. Our farmers may well be the best in the world when it comes to farming, but when it comes to business principles and administration we lag far behind the rest of the world. It’s not that our farmers can’t handle their administration – in fact they’re quite good at it, because keeping two sets of books for the same business isn’t easy. It’s a juggling act, my friend, a tricky juggling act. So if they’re so good at their administration, then you’re probably wondering what the problem is. The problem is a lack of principles – both moral principles and accounting principles.

The principle of keeping two sets of books, which is of course dishonest and unethical, is something that gets passed down from generation to generation. It’s so much a part of some farmers’ lives that the mere suggestion of having their books done correctly, ethically and professionally is met with the strongest objection. In some cases it’s so much a part of their lives that the dishonesty of it doesn’t even enter their minds anymore.

Let me explain why it’s not just dishonest, but in fact criminal. Let’s use one of the simplest examples: it is unlawful to not put cash income through the books. Some people will ask what’s wrong with that. And by the way, it’s not only farmers who are guilty of this – thousands of business owners do exactly the same thing. Those who are guilty of this think they’re saving on tax by doing it this way. Friends, that’s not how it is. You aren’t saving tax money, you are stealing tax money. There’s a very big difference between saving tax and evading tax. The former is legal, but the latter is a criminal offence. One person told me he’d rather keep the money than give it to the government, because there it gets stolen by crooked government officials. That is wrong! As the saying goes, “Two wrongs don’t make a right.” You can’t steal the government’s money because you’re scared somebody else is going to steal it!

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