Warning over long-term effects on land during contract deals

Farmers have been advised to beware of the potential pitfalls when entering a contract farming agreement – and warned of the possible long-term effects of arrangements which lead to land being exploited to the detriment of the soil fertility and structure and to the wider environment.

Land agent Malcolm Taylor of Bell Ingram said that despite being seen as a positive way to maximise flexibility for the farmer or land owner, those looking to enter an agreement with contractors must do so with careful consideration. Most commonly used on arable units, farmers benefitfromsuchanagreement as they are guaranteed to obtain a first payment out of the contracting account whilst keeping an active role in the farm.

Taylor said that some might also be drawn to the potential for retaining subsidy payments while the contractor would gain economies of scale, a contracting and management fee and prospects of a profit from the divisible surplus share – if there was one.

But he indicated that while these arrangements might look good just now, such short-termism could store up future troubles:

“It is all very well retaining the Basic Payment Scheme (BPS) and a first charge on the contracting account but the question arises as to who pays to maintain and improve the fertility and quality of the soil,” asked Taylor.

“If a contractor is being pushed to increase output then the first things to suffer are soil structure and ultimately, the wider environment.

“Farming simply cannot continue the way it is at present. If we choose to ignore environmental issues, it is at our own peril.”