Points to Consider Related to Protecting Your Business

Review all your legal and contractual obligations both verbal and written. Contracts include mortgages, operating lines of credit, marketing and production agreements, land and equipment leases, etc. Assess areas where the farm operation is in a good position and where improvements can be made.

Are there any clauses in the contracts you have with packers/processors that outline a market disruption event, e.g. foreign animal disease, border closure?

How will contractual arrangements between animal owners and contractors and production decisions be handled during a disease outbreak or border closure?

How could you ensure a business relationship is maintained with these customers?

If income is lost due to market disruption (e.g. border closure), are you able to make minimum debt payments to meet your obligations? If not, talk with your lenders to see what options are available. 

If required, what non-essential equipment/capital can be liquidated or traded-in to eliminate or reduce debt payments?

Discuss the global threat of foreign animal diseases with your financial institution and business advisors. Ask them for advice on your current business situation and financial risk mitigation measures. Explain to them what measures you have in place to protect your farming operation in terms of biosecurity and prevention controls.

Do you have enough savings to service eight months of fixed debt payments, e.g. mortgage, equipment and building loans, utility bills, land tax bills, etc.?

Are your savings liquid and easily accessible,e.g. AgriInvest account?

Would large scale burial on your property impact your lender’s environmental assessment of your property and thus impact your mortgage and operating lines of credit?

 


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A special note on passwords: Have you considered how someone else might access your passwords, should you become incapacitated? Have a plan in place!

Protecting Records and Documentation

Critical business records should be backed up by one or more methods
(e.g. second print copy plus and electronic version or cloud) with at least one version stored off-site. To help determine whether a document or record is critical, consider the following questions:

  • Is the record required for business success?
  • Is it required for legal reasons?
  • Is it required by a regulatory agency?
  • Is it required to support recovery efforts?

If you have employees, payroll continuity is an extremely important consideration, especially if you are dealing with a widespread emergency. Providing this continuity would assist with disaster-related problems at home and meet their personal financial obligations. You may want to establish a farm business policy for:

  • Direct deposit of pay cheques for all employees;
  • Overtime pay during an emergency; and
  • One week’s pay or other amount even if your business is not operational.

 

A special note on passwords: Have you considered how someone else might access your passwords, should you become incapacitated? Have a plan in place!

Although market interruption is an industry-wide problem, we cannot fully rely on government to provide financial compensation. Do what you can to build a safety net to get you through a few months without income. 

If you had to evacuate or could not return to your home or farm, how would you access your important personal documents: passport, medical, (list of prescriptions or other medication, health card), financial, insurance, etc.? Ensure they are copied and backed up as well.

Use fire-proof filing cabinets or boxes for important documents and computer records stored on-site. If you are not able to scan documents, snap a close-up photo with your cell phone.

Lastly, contact your insurance agent. Review your insurance coverage. Consider additional coverage for “all-hazard” situations (e.g. flood, hail damage).


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Although market interruption is an industry-wide problem, we cannot fully rely on government to provide financial compensation. Do what you can to build a safety net to get you through a few months without income.

Should you focus on paying down debt and/or building up your savings in anticipation of weathering a large-scale market disruption?

Financial Considerations and Business Decisions Recovery

 

List what steps you need to take regarding legal, contractual and financial obligations if a foreign animal disease is confirmed in Canada.

Based on your planning activities, state what steps you will take to mitigate the financial impact to your farming operation, e.g. asset sales, flock depopulation or partial depopulation, debt restructuring, liquidating savings, off-farm employment. If you have a timeline when each activity will occur, note that beside the activity.

 

List Who to Call:

List people/offices to call and discuss the financial implications of disease detection and anticipated market interruption: Financial institution, Business advisor, Processor, Other Customers, Holders of leases and rental agreements, Accountant or tax advisor, Insurance Broker or Agent, and Lawyer.

Make contact now and again in the event that a disease outbreak does occur. Note any insurance coverage restrictions relating to on-site disposal:


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Deadstock, Mass Mortalities and Disposal