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Contract Farming: Why and How It Might Be The Answer For You

Contract Farming - Meller Speakman - Land Agents and Conultants Since 1836

Contract farming may be the answer you are looking for.

Whether you are a landowner needing to re-structure for succession or tax purposes or an owner-occupier looking for an alternative arrangement to lighten the day-to-day workload, Contract Farming could provide the answer in today’s demanding environment.

Why Contract Farm?

  • Re-structure for succession
  • Re-structure for retirement
  • Reduce workload and time commitment
  • Introduce greater expertise to improve efficiencies and margins in an ever demanding industry
  • Improve economies of scale through the amalgamation of operations
  • Create or preserve a ‘trading’ environment
  • Take back control of land and farms to reduce the risk of changes in tenancy legislation
  • Help encourage new entrants into dairy farming 

How does contract farming work?

The landowner or owner-occupier farmer provides the land, buildings and fixed equipment (milking parlour etc.) and in return receives a ‘Basic Return’ (rental equivalent) for the land and buildings, plus a return on any capital invested in plant, infrastructure and in respect of dairy farming operations and, depending on livestock ownership, a return based on an initial livestock valuation.  The landowner or owner-occupier farmer also receives all subsidy income e.g. Basic Payment Scheme (BPS) and environmental scheme income, plus a depreciation charge based on any fixed assets employed. 

The contractor provides the expertise, management skills, working machinery and labour in return for a ‘Contractors Fee’ to cover the costs employed.  Again, in respect of dairy farming operations and, depending on livestock ownership, a return based on an initial livestock valuation is also received plus a depreciation charge and return on all capital invested in machinery employed.  The Contractor, or in conjunction with Meller Speakman, can offer the resources to manage and administer the trading business so the landowner or owner-occupier farmer doesn’t have to and to minimise their involvement.

Meller Speakman can also manage your trading account, day-to-day supplier invoices and report frequently and professionally against agreed budgets to provide the transparency and confidence you need. 

What next?

If Contract Farming is of interest to you, contact us for an initial FREE no-obligation discussion.