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Farm Business
Agricultural Matters
Is the contract farming business model finished without sfp? poll
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<blockquote data-quote="Goweresque" data-source="post: 7399439" data-attributes="member: 818"><p>I'd say quite the reverse. In order to make sure he gets the ELMS money the landowner needs to be in control of the land, and directing what happens. Ergo I can see that contract farming will be favoured over FBTs. </p><p></p><p>At the moment the situation financially is pretty similar for FBT or contract - the BPS gets put in the pot either way, as everyone knows what it is, so it either goes in the pot towards rent or towards the landlords charge on the contract agreement. But once that goes the ELMS situation will be far more fluid as to what a tenant might want to do and what payments they might get as a result. So from the landlords perspective its better to have the land in hand and direct the ELMS strategy himself and ensure he's happy with the strategy and returns from it than sign it all over on a FBT and end up with a tenant signing up for all manner of things he's not too happy about. </p><p></p><p>Plus of course tenants may be unwilling to sign FBTs unless they are longer terms, in order to take advantage of the longer ELMS agreement periods. So shorter term FBTs may end up far lower rents, to take that lack of ELMS money into account. In which case a landlord faces a choice of either a short term FBT at £X/acre, a long term one at £2X/acre, or contract farming it and returning £2X/acre, with all control in his hands. In that scenario I'd say contracting it out is looking quite attractive.</p></blockquote><p></p>
[QUOTE="Goweresque, post: 7399439, member: 818"] I'd say quite the reverse. In order to make sure he gets the ELMS money the landowner needs to be in control of the land, and directing what happens. Ergo I can see that contract farming will be favoured over FBTs. At the moment the situation financially is pretty similar for FBT or contract - the BPS gets put in the pot either way, as everyone knows what it is, so it either goes in the pot towards rent or towards the landlords charge on the contract agreement. But once that goes the ELMS situation will be far more fluid as to what a tenant might want to do and what payments they might get as a result. So from the landlords perspective its better to have the land in hand and direct the ELMS strategy himself and ensure he's happy with the strategy and returns from it than sign it all over on a FBT and end up with a tenant signing up for all manner of things he's not too happy about. Plus of course tenants may be unwilling to sign FBTs unless they are longer terms, in order to take advantage of the longer ELMS agreement periods. So shorter term FBTs may end up far lower rents, to take that lack of ELMS money into account. In which case a landlord faces a choice of either a short term FBT at £X/acre, a long term one at £2X/acre, or contract farming it and returning £2X/acre, with all control in his hands. In that scenario I'd say contracting it out is looking quite attractive. [/QUOTE]
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Is the contract farming business model finished without sfp? poll
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