That assumes that the spring wheat makes milling at a £60/t premium to the feed wheat. You're mixing your figures up here, unless the winter wheat was sold once drilled at a lot less than the spot milling price now. Lots of spring wheat didn't make milling this year due to ergot.
Contract farming agrements for 2020 season
- Thread starter jon9000
- Start date
That assumes that the spring wheat makes milling at a £60/t premium to the feed wheat. You're mixing your figures up here, unless the winter wheat was sold once drilled at a lot less than the spot milling price now. Lots of spring wheat didn't make milling this year due to ergot.
The Contractor also stands the costs of machinery & labour for redrilling any failed crops.
- Location
- Moreton-in-Marsh, Glos
I have seen so many CFV’s end up as having been a nightmare. It comes down to trust between the owner and the Contractor and always gets put under pressure when you get a bad year like 2020 and 2013. The owner cannot accept that he is the one taking the risk and wants something back from the Contractor.
So many have converted to having a true Contractor doing a fixed price Stubble to Stubble contract with no Farmer’s 1st charge and/or profit share. But even they often end up in tears.
I’ve seen it where a farmer-CF contractor builds up a few CFV’s and invests heavily in machinery, then one Farmer client, gets aggrieved and bad mouths him off to his other clients and the whole thing falls down like a stack of cards.
And it is mostly caused by the clients who are not from a farming background and most importantly, greed.
So many have converted to having a true Contractor doing a fixed price Stubble to Stubble contract with no Farmer’s 1st charge and/or profit share. But even they often end up in tears.
I’ve seen it where a farmer-CF contractor builds up a few CFV’s and invests heavily in machinery, then one Farmer client, gets aggrieved and bad mouths him off to his other clients and the whole thing falls down like a stack of cards.
And it is mostly caused by the clients who are not from a farming background and most importantly, greed.
He would be though. Half of it?
The Farmer needs to be taking trading risk to get all the relevant tax breaks. There's no problem with sharing this risk with a joint venture, share farming, partnership, CFA etc. There needs to be evidence of inputs bought, grain receipts received and minuted meetings with any major contractors to prove active involvement in the business.
I've tendered for what is basically a sham FBT where the Farmer had a high first charge, no interest in providing working capital beyond a quarterly inputs payment. Any profit on top of that was mostly ours. Luckily, we didn't get it.
I've tendered for what is basically a sham FBT where the Farmer had a high first charge, no interest in providing working capital beyond a quarterly inputs payment. Any profit on top of that was mostly ours. Luckily, we didn't get it.
What about CFAs 2021 and beyond?!
With Mid-Tier Stewardship and Wildlife Offers (Arable) currently offering all landowners totally unlimited access (in area terms) to AB1 (Pollen & Nectar) at £511/ha, AB8 (Wild flower) at £539/ha and AB9 (Birdseed mix) at £640/ha PLUS dregressing BPS, what relevance does an Arable farming agreement actually now have in England when the very best a landowner may achieve is ~£370-500/ha currently but with BPS removed will be sub £300/ha before he can blink. Wildlife Offers are not competitive with N.E. - if a landowner wants an option at a particular area, he can get it!
Landowners with no farming overheads and no farming succession just need to enter the scheme, grass the place down, get the place topped off every now and then and be better off by miles. As stated, Wildlife Offers are not competitive - landowners only need fill in the form online and bingo - instant, risk-free cash (kind off!!!).
Obviously DEFRA can’t afford to pay for the whole of England to be simply pollen & nectar and bird mix, so the handbrake on total area within agreements will no doubt be applied - but in the short-term, it isn’t! How do CFA farmers on here propose ‘bridging’ that gap? Sadly ‘production’ isn’t currently relevant - Interesting times for all.......
With Mid-Tier Stewardship and Wildlife Offers (Arable) currently offering all landowners totally unlimited access (in area terms) to AB1 (Pollen & Nectar) at £511/ha, AB8 (Wild flower) at £539/ha and AB9 (Birdseed mix) at £640/ha PLUS dregressing BPS, what relevance does an Arable farming agreement actually now have in England when the very best a landowner may achieve is ~£370-500/ha currently but with BPS removed will be sub £300/ha before he can blink. Wildlife Offers are not competitive with N.E. - if a landowner wants an option at a particular area, he can get it!
Landowners with no farming overheads and no farming succession just need to enter the scheme, grass the place down, get the place topped off every now and then and be better off by miles. As stated, Wildlife Offers are not competitive - landowners only need fill in the form online and bingo - instant, risk-free cash (kind off!!!).
Obviously DEFRA can’t afford to pay for the whole of England to be simply pollen & nectar and bird mix, so the handbrake on total area within agreements will no doubt be applied - but in the short-term, it isn’t! How do CFA farmers on here propose ‘bridging’ that gap? Sadly ‘production’ isn’t currently relevant - Interesting times for all.......
- Location
- Lincolnshire
Interestingly I know more large scale farms that are riping out margins / old hls schemes and working as close to the ditch tops as allowed.
- Location
- Suffolk
I have been thinking the same but the same applies from the contracts point of view - If the divisible surplus is consistently low going forward why would they bother.
As with all things the market will adjust in time but there is trouble ahead.
FBT's on the other hand may have an easier ride. Rents could be linked to the wheat price which could really work well for both parties.
- Location
- Lincolnshire
Not really looked into this yet, but is the above written in stone yet? sounds like just what I need, can you buy a 12m topper?
Linking rents to wheat prices could be a pretty good idea. There is some big figures in these CS schemes but there won’t be enough cash for everyone to get £650/ha for grass! Intriguing times ahead...
If you are an owner-occupier farming in-hand with normal farming overheads or on an FBT then the £900+ per ha for wheat / OSR is still attractive as a possible alternative GM, but if you are a ‘naked’ landowner with no kit and no child interested in farming in the future the Wildlife Offers (no competition, less bureaucracy) looks very attractive!!
Agreed - very sensible thoughts!
- Location
- Bedfordshire
Don't forget that CS, ES and ELM all have a cost, (seed, establishment, stale seedbed, fert on some, mowing, admin, what if it doesn't grow?) The payment is not profit.
It’s live! Fill your boots!!
Mid Tier grants and Wildlife Offers 2023: Countryside Stewardship
Agreements for management grants and capital items to protect and enhance the natural environment.
Indeed! But the landowner-retained BPS and a local contractor rocking up will look after a lot of those mainly Year 1 costs!
Seed cost for these? £100/ha? Drilling £60? Some require being topped multiple times. Agents fees. You could soon get into the realms of £250/ha just to manage these schemes.
Totally right - there will be ceilings on areas, just as there was for HLS & Mid Tier - DEFRA will want to manage the budget. But over the next 3 years, Wildlife Offers is a free-for-all and could be painful in CFA discussions...
Mid Tier grants and Wildlife Offers 2023: Countryside Stewardship
Agreements for management grants and capital items to protect and enhance the natural environment.
Year 1 BPS covers a lot of that! You are right, I for one will be hoping for balanced approach but I can’t see landowner returns going down quickly against these numbers until ELMs kicks in and replaces it...
We had one out right reject CS after I proposed It! Agree with you though.Totally right - there will be ceilings on areas, just as there was for HLS & Mid Tier - DEFRA will want to manage the budget. But over the next 3 years, Wildlife Offers is a free-for-all and could be painful in CFA discussions...
Mid Tier grants and Wildlife Offers 2023: Countryside Stewardship
Agreements for management grants and capital items to protect and enhance the natural environment.www.gov.uk
- Location
- Bedfordshire
BPS might cover it, but it will cover establishment a crop of wheat as well. Its not an argument. The discussion is whether CS options will give a farmer more income compared to a CFA approach. The same argument could be had of any farm business, contractors or in-house operations.
I know a landowner who favoured a CFA over whole farm CS as he didn't know when he would be paid by the RPA for the CS. At least he could sell his wheat when he wanted to.
I know a landowner who favoured a CFA over whole farm CS as he didn't know when he would be paid by the RPA for the CS. At least he could sell his wheat when he wanted to.