A decrease in turnover of at least 20% is now a reality for most pig farms as a result of the corona crisis. That is why business advisor Frank Steenbreker of ABAB Accountants en Adviseurs recommends using the NOW wage compensation scheme where possible. Applications can be submitted until August 31.
The Temporary Employment Bridging NOW scheme supports SME entrepreneurs who are confronted with a decrease in turnover as a result of the corona crisis in the wage costs of staff. This spring, this arrangement was mainly used by horticultural companies in the agricultural sector, but now it appears to be a possibility in pig farming as well.
If you have to pay back the wage compensation later, what's the point of applying?
"Whether you have to pay back the compensation depends on the price development in pig farming in the coming months. In the event of a rapid price increase, the threshold of at least 20% will be raised over the four-month period, which is the basis of the second tranche of the scheme. may not have been achieved.
When the application is granted, the wage compensation is not paid immediately for the full amount, precisely to prevent you from having to pay back a lot afterwards. An advance of 80% of the amount to which you are entitled will be paid. This is also done in two installments. It will be determined afterwards whether you have remained below the 20% threshold. And no power test is performed."
It is not easy to make a good estimate of the pig price development at the moment, not even in the short term.
"The current price level has been stable for weeks. Apart from the corona crisis, the current balance between supply and demand is currently a reason to take a price increase into account. Hope is of course also based on that.
Frank Steenbreaker, Abab
But the corona crisis makes everything uncertain. Demand from China can grow again, but the pigs must be able to be slaughtered. That is anything but certain if the corona problems at the slaughterhouses continue to exist. With the arrival of a second corona wave, all optimism about price increases will disappear."
Are most pig farms eligible for the scheme, given the price drop due to the corona crisis?
"There is no doubt that the price drop is the result of the corona crisis. However, the effect differs slightly per farm type. The negative income effect is greater on sow farms than on fattening pig farms, as the piglet price has fallen by more percentage than the fattening pig price. Sub-breeding farms have been hit the hardest. ."
Does the scheme only cover the wage costs of personnel?
"Indeed. It is not possible to continue to pay self-employed persons or hired staff through company care with this wage compensation scheme."
How do you apply for the scheme?
"That can be done digitally to go to the website of the UWV. Do it no later than next Monday, August 31, because as of September 1, the second tranche of the scheme will no longer apply."
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