Growth industry

Contract farming opportunities poised to grow – page 2

Perthshire producers have been told that opportunities for contract farming agreements (CFAs) are destined to grow as landowners and farmers strive for business efficiency in the wake of Brexit.

Delegates at a farmers’ business briefing organised by Strutt & Parker heard farm consultant, Stephen Whiteford, state that well-managed agreements north of the border are providing farmer and contractor returns that compare well with those achieved in the south-east of England.

His evidence includes data gathered for the 2017 harvest which shows farmer and contractor total returns of £353/ha and £367/ha respectively. Mr Whiteford quoted benchmarked figures which review the performance of CFAs under the firm’s management and said he expected to see a rise in these agreements as farmers continue to review the most efficient ways in which to manage farm businesses.

“Whilst we are less clear on the direction of travel of future agri-policy north of the border, it is quite possible that CFAs will become a more prevalent option for landowners and potential contractors alike as we move towards the post-Brexit era,” he said.

“Certainly, in respect of income, if the farmer is able to achieve returns in the region of £320/ha and above, that ought to compare very favourably with the

“Audience was also advised to consider undertaking carbon audits. STEPHEN WHITEFORD

alternative of letting arable land. It has the added advantage of being tax efficient.

“A well-structured contract farming agreement offers a means of maintaining agricultural activity for the landowner at the same time as maintaining access to potential rural development opportunities. For contractors, it offers a means of spreading fixed costs and increasing output, offering interesting opportunities for expansion.”

The farming audience was also advised to consider undertaking carbon audits in order to assess and improve both their business efficiency and environmental impact.

Contract farming gives contractors the option of spreading fixed costs and increasing output.