While bankruptcies and insolvencies in the agriculture sector are down nationwide this year, BC has seen the number of businesses facing financial trouble grow.
The first five months of 2020 saw 58 businesses in the province declare bankruptcy or make proposals to creditors, according to the Office of the Superintendent of Bankruptcy, up from 45 in the same period last year. Just one of those businesses was a farm, one engaged in the fruit and vegetable production.
The disruption caused by COVID-19 has raised fears that the number of bankruptcies in the sector could rise. The fear was particularly acute in the horticulture sector and prompted the BC Landscape and Nursery Association to launch an insolvency triage program for producers. The initiative was soon picked up by the BC Ministry of Agriculture, which has contracted four consultants to assist producers.
“If you are facing a cash flow crunch that puts you on a collision course with your banker, mortgage holder or financial backer affecting your 2021 spring, we strongly urge you to make contact and take advantage of this program,” the BCLNA told growers.
According to the ministry, the program supports growers facing “a severe financial impact from COVID-19 (i.e. farms and operations facing insolvency or bankruptcy).”
Consultants work with farmers to address topics including dealing with financial institutions, effectively managing cash flow and understanding financial options.
“The farm business consultants have extensive farm debt mediation, insolvency and coaching experience, and can quickly work with individual producers, on a fee for service basis, who are facing financial uncertainty to assess their situation and find solutions,” the ministry says.
Response to the program was not indicated by the ministry. Confidentiality of participants is assured.