Max Sealy (Chippenham) 

Within the Farm Consultancy Group, we operate a number of contract farming agreements, both in the dairy and arable sectors.  As consultants, we often act for contractors who are contract farming on behalf of multiple landowners, as well as contractors operating very much 1:1 deals perhaps with neighbours or other family members.  Contract farming is a well-rehearsed principal, giving the opportunity for those who wish to remain actively involved in the farming business, but not physically involved, the opportunity to maintain the benefits of an active farming trading business, whilst delegating the expertise to someone who is suitably incentivised to carry out the work.  Often a contract fee is paid to carry out the work plus an incentive paid on division of farming margin.

For arable contracts, there are often limitations including grain storage and the ability of break crops to cover the cost of the contract farming fee in an ever increasing cost cycle.

For medium and low quality arable land, the introduction of legume fallow, herbal leys or wild bird food cover offers a different way for the landowners to earn an income from that land.  This could replace, for example, low earning break crops such as oilseed rape, peas, beans and perhaps second cereals.  This has the effect of also dramatically reducing cashflow requirement and gives both the contractor and landowner the opportunity to rethink their working relationship and will have implications with things such as machinery costings. 

It is important that if the legume fallow route is taken, that the crops are well established and it needs to be thought through whether the SFI payment is included in the contract fee, or a separate fee paid for the work on the SFI options.  By way of example, a one year legume fallow will have a lot less benefit than a two year legume fallow.  Method of establishment is critical to ensure crops are viable.  If a contractor is able to deliver min till and variable rate applications of fertiliser then this is likely to attract future SFI payments, thus again increasing overall income. 

One of the biggest advantages of taking the legume fallow route would be budgeted increase in wheat yields, but this would be very dependent on the effectiveness of the legumes.  Early establishment in August (possibly even by bulk broadcasting white clover in standing cereal crops would be preferential to trying to establish a legume mix later in the autumn).

Working with agronomists, we are able to offer cost effective practical advice that integrates well with the financial projections and can ensure that this type of farming operation is fit for the future. 

Contact Max at maxsealy@fcgagric.com or your local FCG consultant about how you can make either contract farming and/or SFI work together or independently for your farming system and business needs.