Date:
____________________________
Venue: ___________________________________
Hydros Consulting Pty Ltd
Question for Irrigators in Goulburn-Broken Catchment
Note: (1) Questionnaire is to be completed during workshops. (2) Approximate values only are required. (3) If you are unable to
respond, or to make a reasonable assessment, mark the item “n/a”.
1. Background Details
1. Your name ......................................................................................................................................................................................
2. Business name ................................................................................................................................................................................
3. Address ...........................................................................................................................................................................................
4. Phone number ................................................................................................................................................................................
5. Email address .................................................................................................................................................................................
6. Irrigation scheme ............................................................................................................................................................................ :
7. Business description: ......................................................................................................................................................................
8. Size of land: .....................................................................................................................................................................................
9. Number of employees: ....................................................................................................................................................................
10. How long has your business been established in the region? .......................................................................................................
11. Permission to speak to accountant and name and address of accountant ...................................................................................
.........................................................................................................................................................................................................
2. Continuation of Irrigation – Response to Buybacks
1. Would you be inclined to sell your water licence as part of the Government’s buy back – assuming the price and conditions
are appropriate? ............................................................................................................................................................................
Focus:
We need to understand how
many of the farmers are likely
leave irrigated farming.
2. What price would the water have to trade at to convince you to sell your permanent water entitlement? ...............................
All responses will be kept confidential
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Hydros Consulting Pty Ltd
Question for Irrigators
3. How many ML entitlement do you have? ......................................................................................................................................
(a) What is the size of the high reliability water share ? ..........................................................................................................
(b) What is the size of the low reliability water share? ............................................................................................................
(c)
What has been your actual allocation for your permanent water over the past 3 years? .................................................
4. Have you traded away permanent water entitlements and purchased temporary water allocations instead? ..........................
Are the irrigators currently in a
distressed state?
5. If you sell your water entitlements would you be likely to remain on your land and dry farm the land instead? .......................
6. What would be the capital costs involved in converting to dry land farming? .............................................................................
7. Will the dry land farm be likely to provide the income needed to maintain your present lifestyle? ............................................
8. Would the sale of the water licence finance the required capital costs to convert to dry land farming? ....................................
9. Would you sell water entitlements if needed to help manage financial difficulties? ...................................................................
3. Managing water cuts
Scenario 1: Assume your entitlement is not reduced because the targeted water reductions in the catchment are achieved by
buybacks and therefore your allocation is not reduced:
Focus:
Need to determine the effect of
water cuts on farm cash flow
1. What do you then see as the effects on your business and its revenues? ....................................................................................
2. Will the reduction in water by neighbouring farms impact on your cost structure? ....................................................................
3. Will you change your operations? .................................................................................................................................................
(a) If so, how? ...........................................................................................................................................................................
(b) Does it require capital and how would finance it? ..............................................................................................................
4. Will you be in a position to expand your business and its production? ........................................................................................
(a) If so, how? ...........................................................................................................................................................................
(b) Does it require capital and how would finance it? ..............................................................................................................
Scenario 2: Assuming it did come to the point that across the board reductions were imposed as, say, only 50% of the required
All responses will be kept confidential
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Hydros Consulting Pty Ltd
Question for Irrigators
reduction for the catchment was able to be bought back and the balance of the targeted reduction was therefore achieved via cut to
allocations imposed (say 20%):
5. How would your farm cope with such a significant cut in allocation? ..........................................................................................
6. Would you be able to continue operating your farm? ..................................................................................................................
7. What do you believe your bank’s view would be of such a significant permanent cut to your water? ........................................
8. What can you do to counter any reductions in income or cost increases imposed by reduced water? .......................................
(a) do you need capital to implement? ....................................................................................................................................
(b) how will you source the capital ? ........................................................................................................................................
4. Farm Cost Structure / Debt Service
1. What is the ratio of net income before interest to interest payments? .......................................................................................
Q4.1
= net income before interest ÷
interest expense
2. What are your business’ total annual expenses excluding interest? .............................................................................................
(a) Are you paying yourself a full salary for the time you are putting into your business? .....................................................
(b) Is this included in your business expenses? ..........................................................................................................................
3. How much of total annual business expenses excluding interest are fixed - ie if you do not produce anything, what costs do
you still have to cover in addition to interest?
.........................................................................................................................................................................................................
4. What is your total interest cost per annum?
(a) Secured short term ..............................................................................................................................................................
(b) Secured long term ...............................................................................................................................................................
(c)
Leases / suppliers / crop lien / other ..................................................................................................................................
Simplified definitions used:
Revenue (cash receipts)
- expenses excl. interest (cash
payments)
= net income before interest
- interest
= net farm income
Focus:
Debt coverage is essential to
understanding how close
irrigators are to debt distress
and what latitude they will
have to manage changes and
lenders will have to grant
credit.
(d) Total .....................................................................................................................................................................................
5. What is your total debt? (breakdown below)
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Hydros Consulting Pty Ltd
Question for Irrigators
(a) Secured short term ..............................................................................................................................................................
(b) Secured long term ...............................................................................................................................................................
(c)
ATO ......................................................................................................................................................................................
(d) Unsecured loans to financiers ..............................................................................................................................................
(e) Crop lien ...............................................................................................................................................................................
(f)
Unsecured loans to family and friends (Ie “soft” loans) ......................................................................................................
(g) Finance leases / suppliers / other ........................................................................................................................................
(h) Total .....................................................................................................................................................................................
6. Percentage of equipment that is leased? ......................................................................................................................................
7. Does the household have off-farm income? ..................................................................................................................................
(a) How important is this financially to your ability to continue farming? ...............................................................................
5. Recent profitability and cash flows
1. How has the drought or other uncontrollable conditions (eg flood, locusts etc) affected your net farm income over the past 3
years? .............................................................................................................................................................................................
(a) Are you able to indicate what % reduction you have suffered? .........................................................................................
Note: Net farm income cash
receipts less cash payments.

(b) Do you have cash reserves? ................................................................................................................................................
(c)
What have you been able to do if anything to minimise the impact on your cash flows? .................................................
2. Do you know the proportion of your expenses (excluding interest) that are fixed? (see 4.3) .......................................................
(a) What proportion of these fixed expenses could be cut back within 6 months? .................................................................
All responses will be kept confidential



Understand current cash
flow position and how
drought, floods etc have
affected your cash outflow
Understand current
profitability
Understand revenue trend
Understand fixed costs
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Hydros Consulting Pty Ltd
Question for Irrigators
6. Recent financial adjustments required
1. Has a reduction in net farm income caused your lenders to raise any concerns with you? .........................................................
2. Has your lender undertaken a review of your borrowings and your capability to service your loans? ........................................
Focus:
 Any current debt stresses
 Ability to reallocate capital
(a) If so what was the outcome? ..............................................................................................................................................
3. Have you been required to reduce your debt level in the past 3 years by your lender? ..............................................................
(a) If so, why? ............................................................................................................................................................................
(b) What was the percentage of your borrowings required for reduction? .............................................................................
(c)
Have needed to borrow additional funds over the past 3 years? .......................................................................................
4. Have you needed to trade your water to maintain your business? ..............................................................................................
(a) If so what effect has that had on your production levels from your farm? ........................................................................
5. Have you invested in water efficiency improvement measures during the past 3 years? ............................................................
(a) If so how was this financed, (government and/or bank and/or own funds) ? ....................................................................
(b) Have you had support from the bank for financing on farm efficiency measures? ............................................................
(c)
If not, why? ..........................................................................................................................................................................
6. Have you needed to increase your borrowing over the past 3 years? ..........................................................................................
(a) If so why? .............................................................................................................................................................................
(b) What % increase has occurred in your debt level? .............................................................................................................
7. Capital Structure
1. Total debt? (already noted in question 4.5) ..................................................................................................................................
2. Approximately what do you believe is the fair value of the business (incl water entitlements), assuming debt free and willing
buyer, willing seller?
...........................................................................................................................................................................................................
All responses will be kept confidential
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Hydros Consulting Pty Ltd
Question for Irrigators
3. Do you believe you could sell the business for close to its value within 6-12 months? ...................................................................
(a) If not, why? ............................................................................................................................................................................
(b) Do you think you could sell your business today and receive enough proceeds to cover your debt? ...............................
4. Ratio debt to total value (“LVR”) – how has that changed in the last three years? ........................................................................
5. How has total debt that changed in the last three years? .............................................................................................................
6. Has the value of your farm changed in recent years? ...................................................................................................................
Availability of capital
Impact on land values
7. Value of any non-farm assets that are pledged as security for farm debt (eg family home if off-farm)? .....................................
8. When did the bank last require you to value your assets? ............................................................................................................
9. If you sold your water entitlement, do you expect the proceeds would cover your outstanding debts? ....................................
(a) If so what percentage of entitlement would you need to sell to just cover your debt? .....................................................
10. Do you presently have cash reserves available? ............................................................................................................................
11. Amount of any unused or undrawn loan facility or overdraft? .....................................................................................................
12. How has the drought effected the value of your farm and on-farm assets? ................................................................................
(a) Has the bank taken into account the movements in value of your farm and on farm assets? ..........................................
13. How has the value of your water entitlement changed? ..............................................................................................................
(a) Has the bank taken into account the movements in change in value of your entitlement? ..............................................
8. Ability to reallocate capital
1. Do you have other assets or savings/investments that you could sell to continue to support your business if you needed to?
(a) Would you do so if need to support the business (ie invest more)? ....................................................................................
2. Have you tried to sell all or part of your property in the last three years? ...................................................................................
(a) Were you successful, if not why? ........................................................................................................................................
All responses will be kept confidential
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Hydros Consulting Pty Ltd
Question for Irrigators
9. Expenditure in Local Economy
3. What proportion of your business expenses are from suppliers within the catchment? .............................................................
4. What proportion of your personal expenditure would be spent within the catchment? .............................................................
Flow on effect to SMEs – cross
referencing
5. Has your personal expenditure changed during the past 3 years? ...............................................................................................
(a) If it has been reduced, please indicate whether this is likely to be a permanent reduction? ............................................
10. Opportunity to apply capital
1. Percentage of land under irrigation? .............................................................................................................................................
2. Percentage of land farmed? ...........................................................................................................................................................
3. Have you been able to maximise the planting on your land during the past 3 years ? .................................................................
If capital is available are there
any opportunities to deploy it
efficiently to achieve business
growth/continuity
(a) If not please explain why? ...................................................................................................................................................
4. Have you moved to a higher value crop in the last three years? ..................................................................................................
(a) Are there opportunities for you to do so? ..........................................................................................................................
(b) What capital costs would be involved? ...............................................................................................................................
(c)
How would you finance them? ............................................................................................................................................
11. Policy mitigation
1. What practical measures do you see could be implemented to mitigate the financial impacts of cutbacks in water? ...............
.........................................................................................................................................................................................................
Collect ideas and views on
policy mitigation from the
community
.........................................................................................................................................................................................................
.........................................................................................................................................................................................................
2. How effective has any assistance or any mitigation measures been to date? ..............................................................................
All responses will be kept confidential
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Hydros Consulting Pty Ltd
Question for Irrigators
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All responses will be kept confidential
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