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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="Brisel" data-source="post: 7403579" data-attributes="member: 166"><p>Usually the BPS goes into the pot, though most CFAs are unique. In theory, the contractor gets paid a fixed fee below the cost of operations, then the farmer gets a fixed fee, then the surplus is split according to the agreed shares. 50:50 is common, but it can go 70:30 to the contractor for the first tier of say the next £50/acre, then reversed for anything above that - this became more common after the bonanza year of 2007. Other proportions are available. You're just trying to share risk and reward if it's a proper collaborative venture, not a sham FBT with extra tax benefits for the farmer.</p><p></p><p>Where the farmer has a fixed charge, that needs to be reviewed in light of the reducing BPS. You could argue that this is the bulk of the rental equivalent.</p></blockquote><p></p>
[QUOTE="Brisel, post: 7403579, member: 166"] Usually the BPS goes into the pot, though most CFAs are unique. In theory, the contractor gets paid a fixed fee below the cost of operations, then the farmer gets a fixed fee, then the surplus is split according to the agreed shares. 50:50 is common, but it can go 70:30 to the contractor for the first tier of say the next £50/acre, then reversed for anything above that - this became more common after the bonanza year of 2007. Other proportions are available. You're just trying to share risk and reward if it's a proper collaborative venture, not a sham FBT with extra tax benefits for the farmer. Where the farmer has a fixed charge, that needs to be reviewed in light of the reducing BPS. You could argue that this is the bulk of the rental equivalent. [/QUOTE]
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Is the contract farming business model finished without sfp? poll
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