Financial Analysis In The Irish Farming Industry Its Uses And Its Usefulness

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5.6 Conclusion

There is a deficiency in the use of financial analysis in day-to-day management in the farming industry – farmers have incomplete records, and an unwillingness to engage in accountancy services beyond compliance work. Three out of the ten farmers suggest that financial record keeping is more of a burden than a use. While the lack of control and the small number of transactions justifies this attitude to some extent, cost efficiency and monitoring the financial return is controllable by the farmer. Yet, only one farmer interviewed employs consultancy services (Farmer F), one farm uses computerised accounts (Farmer J), another three are members of IFAC (Farmer A, B, C), others use discussion groups (Farmer E, H, I). None of the other farmers admits using any detailed techniques or discussion groups, so these must be using intuition or concentrating on non-financial information, yet output does not correlate directly with bottom line profits.

Subsidisation of the industry allowed this under-use of non-financial information in the past, and an allegiance to culture and tradition. However, cost efficiency and effective decision-making will become central in the future, and farmers who wish to have a sustainable level of income will need to expand or invest off-farm. The changing economic and political structure of the farming industry will require a new structure for the individual farm – this includes a greater emphasis on financial analysis.

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