The fodder shortage could have been eased by smoother farm-to-farm trading of feed.
However, many farmers fear farm-to-farm trading, because they are not confident of securing payment for goods they sell to a colleague, unless that colleague is a trusted and known neighbour.
Too many farmers have unpaid bills for fodder they sold to other farmers previously, and they now stay out of farm-to-farm trading for fear of getting caught again.
Noticeably, Lakeland Dairies has offered to buy any fodder surpluses from farmers for redistribution — which is one way of overcoming fears of bad debts in farm-to-farm trading.
However, farmpay.co.uk has shown another way forward to develop farm-to-farm trading, as the first electronic payment system specifically developed for farmers.
It is designed to boost farmer-to-farmer livestock and crop trading in the UK, “FarmPay removes an obstacle to those who feel more confident working through third parties rather than trading direct,” says Jamie McInnes, founder of Hectare Agritech, the company behind FarmPay, and other online trading platforms used in the UK such as SellMyLivestock and GraindexHectare.
“The buyer’s money is held securely in the holding account until they can see the stock on-farm and finalise the purchase.
“Equally, the seller knows the buyer is genuine, once their funds have been received into FarmPay.”
FarmPay is managed through Stripe, an online system for accepting payments online and in mobile apps, which handles transactions worth billions every year (based in the US, Stripe was set up in 2010 by Patrick and John Collison, brothers from Co Limerick).
The first step for FarmPay users is for the buyer and seller to agree a price, either online, by phone, or in person.
The seller will then create an invoice for the agreed amount using FarmPay, which is automatically sent to the buyer via email.
The buyer then pays the money online into the FarmPay “holding” account (using a credit or debit card), and the seller is notified that the payment has been made.
Next, the goods are collected or delivered as agreed, and the seller notifies FarmPay that the goods have left their holding.
Once they have arrived on the buyer’s holding, the buyer must confirm, via FarmPay, that everything is as expected.
The buyer has 48 hours to raise any problems.
If there are no issues, the money is transferred from the holding account to the seller without delay.
If a problem arises, the buyer should raise this using the FarmPay dispute resolution centre.
Payment for haulage is agreed between the buyer and seller, and can be invoiced for using FarmPay if you that is agreed. FarmPay charges the seller 2% commission on each transaction. This commission is deducted from the total received by the seller.
The buyer pays no fees.
This recently launched farmer-to-farmer payment service isn’t the first electronic payment system specifically developed for UK farmers, but it is more ambitiously designed to unlock more value from the supply chain and support new farming entrants.
It guarantees funds by providing an ‘escrow’-type account which holds transaction monies securely until the deal is completed successfully. For example, the service can support those wishing to expand through livestock leasing.
Revealing longer-term farmPay ambitions, Hectare director Andrew Loftus said: “With fragmented livestock supply chains, and poor communication of market signals from consumer and retailer back to breeder and finisher, better information flow will benefit farmers, and help ensure more of their animals meet clearer specifications.”
He said up to £500m (€573m) could be recouped annually from the beef supply chain alone if FarmPay improves productivity by improving the flow of information from livestock buyer to seller.
He also outlined how FarmPay can improve UK farmers’ access to working capital. “Hectare plans to release a range of highly competitive livestock leasing options shortly. These will not only free up working capital to invest back in the farm, but are tax efficient too”.
“In countries such as New Zealand, a more flexible approach to leasing livestock has reduced the huge capital outlay required to start up in or expand in farming”.
“It’s time these finance options were available here.”
Whatever about farmers, FarmPay has impressed “angel investors” of the kind who helped finance the start-up of online giants such as Uber, Snapchat and Dropbox.
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