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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: 7467785" data-attributes="member: 166"><p>That's a big question! If the landowner current gets £80-120/acre as a charge after the contractor's fixed fee then that landowner's charge needs looking at as it is a base rent underwritten by BPS. Drop £95/acre of BPS out and see what that does to the surplus for sharing when the landowner still wants their charge!</p><p></p><p>What does it cost you to do the operations? Does that include agronomy, procurement, cashflow of inputs, managing grain driers, stores, hedges, ditches, game covers, stewardship, filling in forms - this can really add up. Basic operations are £120-150/acre - this really varies too if you're ploughing + power harrows vs no till vs min till vs strip till. Is fuel separate? So many variables. I'd take it back to the contractor losing £20+/acre on the fee then incentivised to make a decent divisible surplus. </p><p></p><p>Do some sensitivity analysis in the spread sheets you discuss with the farmer/landowner where you remove the BPS and play around with grain prices. It goes back to sharing risk and reward for a proper partnership. Knock together a package with full BPS and £200/t for wheat and you'll be broken quickly when grain prices drop back with no safety net of BPS. </p><p></p><p>Working out how you cater for ELMS management has a different cost structure but someone needs to manage it is also going to need looking into.</p></blockquote><p></p>
[QUOTE="Brisel, post: 7467785, member: 166"] That's a big question! If the landowner current gets £80-120/acre as a charge after the contractor's fixed fee then that landowner's charge needs looking at as it is a base rent underwritten by BPS. Drop £95/acre of BPS out and see what that does to the surplus for sharing when the landowner still wants their charge! What does it cost you to do the operations? Does that include agronomy, procurement, cashflow of inputs, managing grain driers, stores, hedges, ditches, game covers, stewardship, filling in forms - this can really add up. Basic operations are £120-150/acre - this really varies too if you're ploughing + power harrows vs no till vs min till vs strip till. Is fuel separate? So many variables. I'd take it back to the contractor losing £20+/acre on the fee then incentivised to make a decent divisible surplus. Do some sensitivity analysis in the spread sheets you discuss with the farmer/landowner where you remove the BPS and play around with grain prices. It goes back to sharing risk and reward for a proper partnership. Knock together a package with full BPS and £200/t for wheat and you'll be broken quickly when grain prices drop back with no safety net of BPS. Working out how you cater for ELMS management has a different cost structure but someone needs to manage it is also going to need looking into. [/QUOTE]
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Is the contract farming business model finished without sfp? poll
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