Managing your finances like you manage your farm


Dawie Maree | Head | Information & Marketing | FNB Agriculture | mail me |

Farming is a long game that requires patience, perseverance, and strategic planning across all aspects of the operation.

While every farmer understands this when it comes to tending crops and raising livestock, the same can’t always be said for managing their finances; and taking a short-sighted approach to financial planning can be as devastating to a farmer’s livelihood as a flood or drought would be to his or her operations.

Financial planning & working with banks

Farmers must understand the long-term cycles of their commodities and be adaptive to short-term changes and challenges in their environment.

Farmers need the flexibility to adjust tactically in the short term while keeping their long-term vision in focus. This mindset is just as critical when it comes to financial planning and working with banks to develop and monitor finances as circumstances evolve.

Farmers need to stay cognisant of uncertainties and have the financial buffers in place and the only way to achieve this is through a highly strategic approach to financial planning.

A comprehensive approach required

The level of strategic financial flexibility requires a comprehensive approach encompassing numerous components, some of the most important of which are the following:

  • Rigorous budgeting

Developing detailed, data-driven budgets using the SMART approach is crucial for effective farm management and securing financing. Budgets need to be very detailed, and account for production costs, capital expenditures, and cash flow projections.

  • Long-term strategic planning

Having a written long-term financial strategy that aligns with breeding or production plans is essential. This strategy must be regularly reviewed and revised to adapt to changing market conditions.

  • Meticulous record keeping

While few farmers would readily admit to being excellent at paperwork, running the farm as a business requires robust systems to track all financial records, no matter how small. This enables farmers to reconcile accounts and make informed decisions.

  • Cyclical mindset

This may seem obvious, but Maree explains that, in challenging times, it’s easy for farmers to lose sight of the cyclical nature of their operations. Recognising the cyclical nature of farming avoids the temptation to chase short-sighted quick fixes, when patience and a long-term mindset are vital given the inherent timelines of production and breeding cycles.

  • Estate planning

This is a critical aspect of long-term farming success that many farmers mistakenly overlook. Each farmer’s assets and circumstances are unique, so a one-size-fits-all approach doesn’t work, and a good estate plan is much more than just drafting a will. It requires a detailed look at everything you own, and careful consideration of what you want to happen with it when you pass away. One of the most common pitfalls is bequeathing the entire estate to a spouse without considering his or her ability or desire to keep on managing the farm.

  • Succession planning

Spend time on succession planning to ensure you are planting for your children’s future. In the past, few farmers thought about retirement and found themselves overly dependent on the land and next generation, which only adds to the burden they will face when they take over the operations.

  • Optimised legal & operational structures

Evaluating and establishing appropriate structures like trusts or companies can be an excellent way of optimising tax efficiency, mitigating financial risks, and enabling seamless continuity during generational ownership changes.

  • Professional guidance

Partnering with a specialised agricultural finance expert provides valuable guidance, which enables farmers to make well-informed decisions that help ensure their financial sustainability, while still being able to focus on their core operations.

In conclusion

Building a strong relationship with your bank at the outset, rather than just when a crisis hits, is key because it enables your bank to fully understand your operations and be more willing to provide the financial support you need during the difficult times.

By integrating these components into a strategic financial plan, farmers can effectively navigate uncertainties and facilitate their operation’s long-term sustainability.

Financial planning needs to align with the strategic long-term vision for the farm, farming success is not just about this season’s crops and livestock; it’s about planting seeds that will benefit future generations.



  1. This is a wonderful advise, it really fit to any farmer, big or small. Interestingly, it also fit to other off-farm businesses, as well as on a personal level, I really enjoyed reading the article. As a young agricultural economist it really set a good tone when I see my seniors speaking out and reaching out to farmers.

    If possible, I would love to see an advise like this for small scale farmers and trying to factor them in and how they could potentially benefit from FNB. I know you have a lot of financial portfolio for cooperatives including those that involves smallholder farmers. In addition, I would also love if the advise could also go to informal fresh and produce market on the potential benefits and structure that could ensure success and security

    I was reading an article by PotatoSA and it indicated that 60% of potato produce are directed to the informal market. Which indicate a potential of these market and the need for more attention.

    An advise in these areas would be interesting as we look up to you as financial experts in agribusiness


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