What's a fair wage on a family farm?

[Bill the Bass]

My brother and I (both directors of our livestock farm, but not ownerd by us) in our 30s work on our family farm usually 50+ hours, probably take a week to 10 days holiday a year (I know this is not unusual in this industry). Our housing is provided by the farm, but can hardly be classed as elaborate, we pay ourselves £8k/year (and have been for the last 10 years). I've been looking at our accounts and in theory we could probably afford to increase this to £16k ea, but this would probably be at the expense of investment needed (new barn, replace worn out machinery etc etc) as our profits would only be £10-15k based on last years costs/sales.

I'm very much minded towards a pay rise as I'm finding my pay whilst adequate a decade ago is not enough to afford the basics and have money for savings, but the rest of the family are reluctant. I have suggested we look for ways to improve profitability, but am met with deaf ears at best and positive hostility towards some diversification plans. Is it reasonable to expect more (as a uni grad) from this industry?

It's difficult to say without knowing all the facts but, do you get a vehicle supplied ( taxed, fuelled and maintained by the business)? Do you get council tax and utilities paid?. If the answer to these is yes then to be honest you are not that different to the vast majority of other graduates.

You also need to keep in mind you have in effect have had a pay rise because you have been insulated form rent rises, council tax rises, energy price rises (assuming these are paid by the business) for ten years. These costs have doubled for most families in ten years.

Grass is always greener.

Oh and I wouldn't worry about saving, it's not worth it even if you have it spare. You are better of being paid less and investing it in the business assuming it's viable/profitable imho.

 

[multi power]

You say housing is provided, in the real world that's worth minimum £550 per month rent, £120 rates, £100 utilities/insurance etc.... So there's another £10k

How about vehicle? fuel?

You are investing, but you don't own it? Is it Dad owned and will be yours eventually?

That's if the old man don't have a strop and sell up, or big family bust up etc

 

[multi power]

Probably a huge percentage of posters who could put similar stories on here
Nick...

No i don't think so, not many would be paid anywhere near 8 k a year

 

[Robw54]

It's difficult to say without knowing all the facts but, do you get a vehicle supplied ( taxed, fuelled and maintained by the business)? Do you get council tax and utilities paid?. If the answer to these is yes then to be honest you are not that different to the vast majority of other graduates.

You also need to keep in mind you have in effect have had a pay rise because you have been insulated form rent rises, council tax rises, energy price rises (assuming these are paid by the business) for ten years. These costs have doubled for most families in ten years.

Grass is always greener.

Oh and I wouldn't worry about saving, it's not worth it even if you have it spare. You are better of being paid less and investing it in the business assuming it's viable/profitable imho.

But a some point you have to cash in your chips. You can't go through life investing every penny into a business and then pass it on at the total expensive of living and tax bill. You can't support a family and a decent life on 8k a year. Cars, fuel, housing and so on aren't tax deductible expenses in their entirety. You be getting on 5-6k shopping for a family alone and last time I looked my domestic council tax bill wasn't tax deductible.

 

[Bill the Bass]

But a some point you have to cash in your chips. You can't go through life investing every penny into a business and then pass it on at the total expensive of living and tax bill. You can't support a family and a decent life on 8k a year. Cars, fuel, housing and so on aren't tax deductible expenses in their entirety. You be getting on 5-6k shopping for a family alone and last time I looked my domestic council tax bill wasn't tax deductible.

Who knows, the more you have the more you want.

 

[Grouse]

That's if the old man don't have a strop and sell up, or big family bust up etc

Or get dementia - hate everyone in the family and p1ss all the assets by borrowing / taking out overdrafts and mortgages and leaving nothing but debt

 

[Robw54]

Who knows, the more you have the more you want.

Don't know the OP circumstances and they might be in for a chunk of a big farm down the line, but not many be working 50hr for £150 a week alone and not viable unless a stack of expenses going through the books or a high earning spouse..

He says he's a Director, so a limited company and they are paying corp tax on 16k and not utilizing their full personal allowance even if a bit of NI to be paid.

 

[bankrupt]

not utilizing their full personal allowance .

Depends how much they're declaring as Directors' benefits.

 

[flyonthewall]

Bit of a difficult one for me to weigh up tbh listening to people's take on things. Yes I have a lot of benefits on the job admitably - I have access to a fully funded Land Rover if needed (used by all), but use my own car for private use, I pay council tax in full, grow my own veg, have access to plenty of meat (if on the end of its shelf life) - in a nutshell my living costs are pretty low like a lot of farmer's. Sadly I lost my father five years ago, and mother is the owner of the actual farm, so in theory I am a tenant, albeit a director, the farm is small (<30 ac) but through the years we have built up our beef herd from 45 to 150 cows and have managed to rent around 200 acres of grassland at virtually a peppercorn rent and bought a good suite of grassland kit. I think the actual point is that to get to this point we are having to put more and more in, and it feels as if I'm on a treadmill getting faster and faster and I'm not sure the carrot keeping me on it is sufficient. I enjoy my work, and mentally its not usually stressful - it's just there's so much of it and I feel at a personal level I'm not making a success of life......

I'm lucky in so far as I don't have to provide for a family (as a bachelor), if I had one I'd shudder to think how I'd bring them up, I certainly wouldn't be able to give them the upbringing I had. I know my father earn't four/five times what I do now (not in ag'), and that was in the eighties.....

 

[Frank-the-Wool]

Bit of a difficult one for me to weigh up tbh listening to people's take on things. Yes I have a lot of benefits on the job admitably - I have access to a fully funded Land Rover if needed (used by all), but use my own car for private use, I pay council tax in full, grow my own veg, have access to plenty of meat (if on the end of its shelf life) - in a nutshell my living costs are pretty low like a lot of farmer's. Sadly I lost my father five years ago, and mother is the owner of the actual farm, so in theory I am a tenant, albeit a director, the farm is small (<30 ac) but through the years we have built up our beef herd from 45 to 150 cows and have managed to rent around 200 acres of grassland at virtually a peppercorn rent and bought a good suite of grassland kit. I think the actual point is that to get to this point we are having to put more and more in, and it feels as if I'm on a treadmill getting faster and faster and I'm not sure the carrot keeping me on it is sufficient. I enjoy my work, and mentally its not usually stressful - it's just there's so much of it and I feel at a personal level I'm not making a success of life......

I'm lucky in so far as I don't have to provide for a family (as a bachelor), if I had one I'd shudder to think how I'd bring them up, I certainly wouldn't be able to give them the upbringing I had. I know my father earn't four/five times what I do now (not in ag'), and that was in the eighties.....

I would say well done for what you have achieved but you are at a crossroads. You either have to try and expand the business rapidly or you or your brother go and get another job. Or even better set up another business that can run along side the business.
I am sure a large number of people are in the same position as you and begin to feel trapped.

You do not say where you are but there must be opportunities to do other work. I used to do lorry driving at nights. There is always lawn mowing/garden maintenance for the people who live in the sold off farm houses. Wood cutting and selling logs. The list is endless if you have a base such as a farm to operate from. What about a campsite?

There is also another downside to agriculture generally by living on what would be considered by many to be below the poverty line, in that you are effectively subsidising your agricultural production by working for far less than the minimum wage even.

 

[ARW]

If the business cannot pay proper wages then what use is it?
On another note if I had no rent and other costs and had 8k a year for household costs I would have nowt left, but say if you had a job on £20k a year, take rent/mortgage and other costs off you will still probably have nowt left. It comes down to what you want

 

[ThatsSomeSheep]

I would say well done for what you have achieved but you are at a crossroads. You either have to try and expand the business rapidly or you or your brother go and get another job. Or even better set up another business that can run along side the business.
I am sure a large number of people are in the same position as you and begin to feel trapped.

You do not say where you are but there must be opportunities to do other work. I used to do lorry driving at nights. There is always lawn mowing/garden maintenance for the people who live in the sold off farm houses. Wood cutting and selling logs. The list is endless if you have a base such as a farm to operate from. What about a campsite?

There is also another downside to agriculture generally by living on what would be considered by many to be below the poverty line, in that you are effectively subsidising your agricultural production by working for far less than the minimum wage even.

@Frank-the-Wool raises a pertinent point above re low wages subsidising agricultural production.

Parallel to that argument is the mantra I live by: the farm MUST stand alone from other earned income.

What I mean by that is that if the OP does as some suggest and gets an off farm job, the off farm wage must go into his pocket, never spent on farm.

TSS

 

[Grouse]

@flyonthewall

If you are living on a promise of inheritance and taking a low wage because if that, you need more security than a promise - you only live once, there is no second time round.

There are thousands of farmers sons who have been in similar circumstances, and bitterly regret it when they are in their 50's as it's then too late - they have given up there best and most productive working years for a promise that never materialises.

Or you do get an inheritance - but also inherit a fecking huge overdraft with it which cancels it all out.

I have lost count of the times I have heard the same story. If your not happy sort it out now while you are young enough to do something else.

If you have lost your dad, why isn't mum making inheritance plans for the next generation to give you some surety.

 

[chipchap]

@flyonthewall

If you are living on a promise of inheritance and taking a low wage because if that, you need more security than a promise - you only live once, there is no second time round.

There are thousands of farmers sons who have been in similar circumstances, and bitterly regret it when they are in their 50's as it's then too late - they have given up there best and most productive working years for a promise that never materialises.

Or you do get an inheritance - but also inherit a fecking huge overdraft with it which cancels it all out.

I have lost count of the times I have heard the same story. If your not happy sort it out now while you are young enough to do something else.

If you have lost your dad, why isn't mum making inheritance plans for the next generation to give you some surety.

A far more important issue than your monthly drawings.

 

[capfits]

£35K pa, otherwise just a slave to the farm.
As a farmer we have so many skills that are attractive to others.
If you went to work elsewhere you would earn £20 k plus house and other benefits.

 

[gone up the hill]

I would say well done for what you have achieved but you are at a crossroads. You either have to try and expand the business rapidly or you or your brother go and get another job. Or even better set up another business that can run along side the business.
I am sure a large number of people are in the same position as you and begin to feel trapped.

You do not say where you are but there must be opportunities to do other work. I used to do lorry driving at nights. There is always lawn mowing/garden maintenance for the people who live in the sold off farm houses. Wood cutting and selling logs. The list is endless if you have a base such as a farm to operate from. What about a campsite?

There is also another downside to agriculture generally by living on what would be considered by many to be below the poverty line, in that you are effectively subsidising your agricultural production by working for far less than the minimum wage even.

Most farms are basically subbing the agricultural production by taking out far less than they would be if they worked in other industry's.

Take the thread on herdsmans wages in the dairy section the other week, when it became clear with a house/ truck etc the total package would be around 30K+ no end of farmers came on and said it was far too much and they couldn't justify paying anyone that sort of wage.

Reality is the OP will not be able to earn the sort of money he wants from farming alone as for most livestock sectors the profit isn't there to do it and that will only get worse post Brexit unless either farm gate prices go up or input prices go down ( thou the reality is subs will be all but impossible to get,input prices will rise and farm gate prices will drop )..

End of the day farm gate prices haven't kept up with inflation in real terms and that is unsustainable in the long term.

 

[7610 super q]

What is this "wage" of which you speak ?

 

[chipchap]

Most farms are basically subbing the agricultural production by taking out far less than they would be if they worked in other industry's.

Take the thread on herdsmans wages in the dairy section the other week, when it became clear with a house/ truck etc the total package would be around 30K+ no end of farmers came on and said it was far too much and they couldn't justify paying anyone that sort of wage.

Reality is the OP will not be able to earn the sort of money he wants from farming alone as for most livestock sectors the profit isn't there to do it and that will only get worse post Brexit unless either farm gate prices go up or input prices go down ( thou the reality is subs will be all but impossible to get,input prices will rise and farm gate prices will drop )..

End of the day farm gate prices haven't kept up with inflation in real terms and that is unsustainable in the long term.

Quite right, however everybody has the choice to continue, or change.
The fact is many farmers are prepared to work for less than they could earn elsewhere, for all sorts of different reasons.
Personally speaking I'm generally very happy with my lot.

 

[Tarw Coch]

£35K pa, otherwise just a slave to the farm.
As a farmer we have so many skills that are attractive to others.
If you went to work elsewhere you would earn £20 k plus house and other benefits.

If the OP gets 35k so should his brother, plus mother has to live off something plus re investment on the farm, 230 acres, mainly rented, it ain't going to happen.

 

[lazy farmer]

Your on 10K for the house so currently taking out 18k each, that is a reasonable/ very good wage on a family farm in these times. (esp if the farm pays for a truck )

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