While it’s been the subject of considerable speculation since May when the news broke of the collapse of the grain merchant Alexander Inglis and Son, the release last week of the administrator’s preliminary report finally put some hard figures on the scale of the losses faced by Scottish farmers.
And, with an overall financial deficiency likely to be significantly higher than had been indicated in the directors’ statement of affairs, the administrators anticipate this could be in excess of £70 million – making the collapse one of the biggest events to hit Scottish agriculture in recent years. 
The report makes it look likely that the Australia-based Macquarie Bank Ltd is probably in for the biggest hit, despite being the ‘secured’ creditor, – but the so-called ‘unsecured’ creditors also face a substantial bill. 
This group (which includes growers, hauliers, other grain merchants and fertiliser companies) are, according to the report, set to be £6.1m out of pocket – but a week on from its publication the administrators now believe that this debt could also be even higher – estimated at closer to £17.5m – when claims from stock shortfalls are considered.
The effect which such a blow will have on the farming community as a whole is bound to be devastating – especially as farm businesses (many of which have lodged six-figure claims) are unlikely to see much of the colour of their money again after claims of secured and preferential creditors have been settled. 
The report released last week by the administrators which looks into the whole tangled issue shows a number of farm businesses facing individual losses of well over £200,000 – while two dozen of the largest farm creditors are believed to be out of pocket to the tune of close to £3m in total.
And while the individual claims lodged with the administrators might be lower than some of the wilder figures which were floating about the rumour mill, there’s no getting away from the fact that the scale of losses – and the likelihood of receiving only pennies in the pound at best – must represent an existential threat to the dozens of farm business across the country that have been caught up in the fallout of the collapse. 
Even before the possible scale of the losses was known, when the news broke that the company had gone into administration it sent considerable shock-waves through the arable sector and marked a further decline in competition within the grain trade which has recently fallen into fewer hands through failures, acquisitions and mergers.
The business, which was run by former Scotland rugby star, Jim Aitken, operated five grain stores, four of which were owned, across East Scotland and the Borders area, had a turnover of around £100m and employed 37 staff through Alexander Inglis and Son, Inglis Grain Driers Ltd and the incorporated company, Tayside Grain at Errol in Perthshire.  
The administrators said that the core gain trading business had been suffering from weaker trading following the poor harvest in 2020 and a contraction in demand stemming from the Covid pandemic. 
The report also stated that the group had entered into futures contracts to hedge grain that was financed or owned by the Macquarrie Bank – but due to movements in commodity prices it had to make payments on margin calls. 
“From 2020 this is understood to have been a significant issue with large cash outflows given high volatility in world grain markets and larger differences between old crop and new crop prices,” it read.
“In order to meet the margin calls stock was sold to raise liquidity. The Group ran a short stock position and was unable to replenish the stock sold due to cash flow constraints, with the result being that over time levels reduced to finance trading losses and margin calls.”
Additionally, the report said the company had continued to be impacted by legacy losses on dealings with the failed Philip Wilson Group, a situation which had led to involvement with the development of land at Wallyford through a joint venture, which the administrators said had failed to realise the forecast level of returns.
But also core to the problem facing growers in the complicated picture investigated by the administrators was the fact that there appeared to be a considerable discrepancy between the stocks of grain claimed and those which were actually held by the company. 
And while the administrators noted that the stock assessment process was still underway, wheat stocks at 30,000 tonnes were believed to be 90% lower than claims received; malting barley stocks at 50,000 tonnes 60% below claims; feed barley at 3000 tonnes 40% below; oilseed rape at 3000 tonnes 30% below; while oat stocks at 2000 tonnes were close to the claim figure.
Those claiming ownership of stock in the stores have been hampered by the requirement to identify individual quantities of grain in store, with batches being mixed even where contracts obliged them to be separated – and this loss of identity, after being lumped into heaps with grain from other farms, has made legal proof of ownership or retention of title a nigh-on impossible nightmare.
However the ownership of some of the grain in store is still being challenged – by those who bought it, those who sold it and those who were simply using the facilities to store their own grain – and the final ownership is to be subject to determination at a court hearing in late August.
The administrators also reported that the majority of the actual grain stores and other facilities owned by the business were currently under offer from buyers, although sales had yet to be concluded so no indication of funds realised could yet be given.  
But the shortfalls in the amount of grain held in these stores are both staggering and confusing. For while the report indicates there was an overall shortfall of around 30%, that doesn’t square with the figures given for individual grains. It might be my dodgy arithmetic but, taking wheat as an example, a 90% shortfall would indicate to me that 30,000 tonnes were found where 300,000 tonnes were expected. 
So with today (Friday 16) marking the last day for submitting creditor claims to the administrators, anyone yet to do so really has to get their skates on and  act as a matter of urgency rather than waiting for the tangled web of issues to be clarified.
It’s also worth noting that anyone who has claimed before this deadline can still provide further information to support their claim after that date, either to the administrators or to the court.
But although the level of losses is still under investigation by the administrators, so too are the reasons behind the sudden and catastrophic collapse.
While it would be unwise to publish the wilder areas of speculation which are currently floating about on this front, at the end of the day there is one thing that is for sure.
And that’s the fact that it’ll be those who were innocently caught up in the whole sorry affair who are likely to end up paying the price of one of the biggest financial shocks to hit Scottish agriculture.