Comment: A missive that banks on the generosity of financiers…

‘DEAR Sir, as Deputy Assistant to the Regional Head (South East) Financial Management (Budgets, Cash Flow and Forecasting) Agricultural Section of your fine bank, you will be aware that the past financial year has been a difficult and trying one for many of your customers.

Put it this way, you should be aware, because I’ve written before. In 40 years of farming I and my family have come through some blo… very bad years, but I suggest that weather-wise 2012 and now 2013 are among the worst and, as you will know from many years of experience of our industry – five, isn’t it, but I’m sure university taught you something? – financial results are usually closely linked to the weather.

It has been suggested by some farmers that I may be wasting my time in asking you to re-consider my application for an increased overdraft at rather more favourable terms than recently offered. Old jokes such as “‘Here lies a banker and an honest man’ – How did they get two bodies into the same grave?, spot the difference between glass eye and real eye, what do you call 50 bankers in a crashed jet? A good start, etc have been heard.

Words such as “leeches”, “bloodsuckers” and “parasites” may have been bandied about by some, along with amusing play on the word “banker”. Naturally, I do not subscribe to all, or indeed any, of the above. In any discussion I have steadfastly defended the right of any bank to increase its overdraft interest rates, refuse to extend an overdraft, to reduce an existing one without prior notice, foreclose, or in fact behave like a complete bas… that is, in a professional and business-like manner.

Loyalty such as I have shown is, of course, its own reward, but I would like to think it might have some slight influence on how you regard this renewed application for a slightly larger overdraft – a £50,000.98 extension should do it – for the next few months until the early potatoes are lifted and lambing and harvest returns start to come in.

As at time of writing, no early potatoes have yet actually been planted – the main field is still, regrettably, under water – sowing of spring barley is unlikely until the present foot of snow clears and lambs are refusing to be born until the temperature rises. But I confidently expect that returns come July and August will be at record levels and justify extension of my credit facilities.

In making such an assertion, I would like to point out that I am taking a leaf from Chancellor George Osborne’s Budget speech last week. Indeed, I have taken his pragmatic approach to heart and have used it, as you will note, in the full cashflow and budget attachment sent with this letter (please excuse the children’s crayons and old wallpaper used to set that out, but needs must).

I accept that in the past your fine bank has disagreed with some of my cashflow and budget outlines, suggesting my talents would be better suited to writing fiction (the publishers suggested that next time I just send the punctuation and they would fill in the story).

But surely – back to farming – following the example of the Chancellor, or indeed the excellent John Swinney’s recent SNP financial forecasts at Holyrood, must be a sound and approved approach?

Viz, as a farmer I echo the Chancellor: “I’m going to level with you about the difficult economic circumstances we still face and the hard decisions required to deal with them. It is taking longer than anyone hoped, but we must hold to the right track.”

I could not put it better. And as part of the Chancellor’s “aspiration nation” no-one aspires more than I do to take part in a financial recovery. So I confidently predict that record-breaking yields and record prices in future will not only reduce, but even eliminate, my overdraft and bring my business back to profitability.

That future, I agree, is not immediate. Regrettably, huge losses in the past year mask underlying profitability and my accountant indicates that this year’s returns might not be as good as that.

But, following the Chancellor’s splendid example – and I contend this is the important point as far as your wonderful bank is concerned – my budgets for 2014, 2015 and 2016, clearly prove that my profits will increase by 47 per cent, 89 per cent and 142 per cent.

Demand for borrowing will obviously decline in line with this – and remember, all that is needed to achieve this is three years of uninterrupted good weather, a 60 per cent increase in grain yields, prices consistently above £350 per tonne, a lambing percentage of 290 and finished quality beef cattle selling for £2,000 or more per head. All eminently achievable, as you will know from your economics course (the one designed to make astrology seem ­respectable).

I look forward to your favourable reply and it would be appreciated if this time you remember to stamp the letter.

Yours ever so sincerely…”