ONTARIO GRAIN FARMER BUSINESS SIDE 1.5 PAGES??? UNSURE Improving efficiency, delaying discretionary purchases, and waiting until crop sales are paid before committing those dollars elsewhere are all practical ways to gradually build an emergency fund. Crop insurance payments or government programs can also help boost those reserves. Q: WHERE SHOULD THE MONEY BE KEPT? A: The money needs to be easy to access without sitting idle. One approach is to divide the emergency fund among accounts or savings tools that allow both immediate and near-term access. For example, allocate 30 per cent to a high-interest savings account or cashable guaranteed investment certificates (GICs) for immediate needs, while investing the remainder in short-term products, such as a GIC ladder. This allows the money to continue earning interest while remaining relatively accessible. The goal is to strike a balance between liquidity and return. Investments that fluctuate significantly in value or lock money away for several years generally aren't a good fit for emergency savings. Q: WHEN DOES IT MAKE SENSE TO BORROW INSTEAD? A: Borrowing and emergency savings can both make sense and work together. This hybrid approach is often the most realistic for farmers and could combine two to three months' cash on hand with a prearranged line of credit for larger emergencies. For many farm operations, the most practical strategy is to maintain enough cash to handle immediate needs while also having access to credit for larger, less frequent events. Q: IF YOU COULD GIVE EVERY GRAIN FARMER ONE PIECE OF ADVICE, WHAT WOULD IT BE? A: Start building your emergency fund in a good year, not during a crisis. Most farmers tell me they wish they'd started sooner. It's not glamorous – it doesn't expand acres or buy new equipment – but it can make the difference between weathering a bad season and limiting your ability to grow the farm. Emergency funds provide flexibility, reduce financial stress, and help ensure one difficult season doesn't derail the operation's long-term future. I also advise farmers to speak with their adviser or agricultural lending specialist for guidance tailored to their operation.•
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