Source: Farm Management Canada and MNP
Financial literacy is a fundamental starting point for effective farm business management, helping producers understand the direct impact of their business decisions and the options and opportunities available going forward. Yet, research shows that basic financial literacy is a significant sore spot for the vast majority of Canada’s producers. A recent study by Farm Management Canada found that 63% of Canada’s producers report they understand and can use financial information for decision-making, while producers who have a financial plan and use their financial information to inform decision-making were found to increase their profitability by up to 525% (Dollars and Sense, 2020).
While lenders, accountants and financial advisors seek to work hand-in-hand with producers to manage financial risk while positioning farms for prosperity and to seize opportunity, the lack of financial literacy amongst producers is hampering these opportunities.
While we know the majority of producers didn’t get into farming to be business managers, producers who follow beneficial business practices like financial analysis and planning are not only rewarded with increased profitability, but also family and farm team harmony, confidence in decision-making and peace of mind. “Increasing farm financial literacy is the key to unlocking important information about the farm’s risk and potential,” says Heather Watson, Executive Director of Farm Management Canada, “and we are excited to find a partner who is just as devoted to supporting farm financial literacy as we are.”
In recognition of the need for greater financial literacy amongst Canada’s producers, Farm Management Canada and MNP have joined forces to offer a new Farm Financial Fluency training program for producers. Producers of all types and across all commodities will benefit from a deeper understanding of their financial situation and the different options available to remain competitive and take calculated risks for continued success.
“Agriculture producers are and always have been business owners. Over time, the dollars at stake have steadily increased, raising the potential reward, but also enhancing the risk of failure. This has made the financial management side of the business become increasingly important. In order to be actively involved in the financial management of the farm, producers need a proper level of training in financial fluency, and we at MNP are well positioned to help those producers who need some help with this challenge,” says Stuart Person, Senior Vice President, Agriculture at MNP.
Together, Farm Management Canada and MNP will host and deliver six Farm Financial Fluency training programs from October 2021 to March 2022, specifically designed to help producers understand, interpret, and use financial tools including balance sheets, financial statements, cash flow, budgets, and financial plans. Producers will learn how their financial information can be organized for quick and easy analysis and interpretation and how to use basic financial tools to calculate their financial position, options and explore what-if scenarios. Participants will be better equipped to have progressive discussions and planning sessions when working with their lenders, accountants and financial advisors.
As we find ourselves in the midst of a global pandemic, the program will be delivered virtually over the course of three 2-hour sessions coupled with an optional follow-up session with an MNP advisor for those seeking additional support. Virtual sessions will also help accommodate producers who may be sensitive signing up for financial literacy training, as participants can remain anonymous.
Interested in hosting Farm Financial Fluency training for your members, clients and stakeholders?
Feel free to get in touch with the Farm Management Canada team.
About Farm Management Canada
Farm Management Canada is dedicated to increasing the awareness, appreciation, and adoption of proven business practices to establish a foundation for farm management success. We do this by providing and connecting producers with the business management resources and tools to assess performance and make sound business decisions.
MNP is a leading national accounting, tax and business consulting firm for Canada’s agriculture industry. We have invested more time and resources into understanding agriculture than any other firm. With more than 18,000 agriculture clients and a team of more than 600 agriculture specialists, MNP delivers a diverse suite of services to protect producers and maximize results.
For more information contact:
Heather Watson, Executive Director
Farm Management Canada
Caitlin Dika, Nation Marketing Manager, Client Services