12 December 1998

CONTRACTORS OFFER KNOWNCOSTOPTION

A considered – and considerate – approach to the use of contractors is the best way of obtaining the best service, suggests Peter Hill.

ASK any farm management consultant for advice on cutting labour and machinery costs, and contractors will almost certainly crop up in the answer. As a means of divesting investment in metal, contractors offer a known-cost – and often cheaper – alternative to machinery ownership.

Using contractors gives a farm total flexibility in work capacity to match cropping and seasonal variations, the opportunity to try new techniques and methods without committing expenditure on machinery, and pre-determined costs for field operations without surprise repair bills and the like.

Use the right contractors, and skilled, experienced operators also come as part of the package, along with hassle-free management of mechanisation inputs.

The main concern of farmers contemplating the contractor option is, however, whether they will get the level of service that sees the job done properly in terms of work quality and timeliness. That largely rests on the contractors shoulders – but customers also bear some responsibility, and not a little influence.

So, having decided to take the contractor route, be it for individual services or whole-farm operations, how can contractors be helped and encouraged to provide the best level of service?

Shropshire contractor Robert Pinches has a few suggestions which boil down to commitment and communication: commitment on the part of customers to using contract services in a long-term strategic rather than an ad hoc manner; and communication in terms of keeping the contractor informed of anything that might affect what is asked of him.

With 25 years experience in contracting, Mr Pinches has pretty much seen it all: from being expected to drop everything and get baling with a moments notice, to arriving on-farm to find another contractor innocently doing the work for which he was booked.

And, as chairman of the general contractors section of the National Association of Agricultural Contractors, he has plenty of anecdotal evidence that he is not alone in such experiences.

"Weve been around long enough so that I can be a bit selective about who we work for," he says. "And thats farmers who want to make proper use of our services on a regular basis and who pay bills when they fall due."

Happily, he finds enough such farmers to make a success of the operation and, indeed, is finding renewed demand with new customers coming on board.

"My impression is that farmers who might have gone down the share farming route are seeing financial advantages from continuing to farm themselves but putting all the machinery and labour requirement out to contractors," Mr Pinches explains. "That way, the cost and management burdens are reduced and more of the proceeds are retained than if they had to be shared with a share farming part.

A third power harrow-seed drill combination has been added to the machinery park this year as a result of increased demand, and although combine harvesting continues to tail off there is still plenty of work to keep Mr Pinches 10-man team occupied.

Principal services are straw baling (with six big square machines), beet harvesting (two new tankers are due this season), beet drilling (four 12-row outfits), potato land preparation with four stone/clod separators, and grass/maize silaging with a self-propelled forager and attendant equipment.

That represents a big investment and commitment to meeting customer needs.

"We aim from the outset to provide decent equipment, an experienced and well trained labour force and, as far as possible, to meet agreed schedules," says Robert Pinches. "And were here in the long run, to provide continuity of service."

On the whole, this works in practice. The vast majority of the Pinches teams workload is repeat, on-going business, with some customers having used the service for 20 years or more.

"You lose some, inevitably, as farms change hands, new managers come in or simply because human nature leads some customers to chase a better deal," says Mr Pinches. "It hurts when work goes elsewhere but Ive found its best to bite your tongue. Ive plenty of examples of farms that have switched to save a couple of pounds an acre, only to come back because of the standard of service we can provide."

Achieving a decent level of service – which means doing the job right, with the best equipment, when its wanted – calls for sound organisation and a degree of flexibility, especially bearing in mind the travelling distances often involved and weather inconsistencies. Keeping a dozen plates spinning on the end of flexible canes has nothing on the juggling act that contractors have to perform in a difficult season.

Important as it is for contractors to keep clients informed of their movements and intentions, so customers have a particular part to play here in terms of reciprocal communication.

"When clients share their plans and intentions with us, and remember to tell us what they are doing, we can provide the sort of attentive service they expect; its when they dont that things start to go wrong," Mr Pinches emphasises.

This is particularly the case when the contract operation follows on from work carried out by the farms own resources, such as contract drilling, straw baling, or forage harvesting.

"All we need is a bit of notice. Its no use ploughing today and expecting us to turn up with a drill tomorrow at 24 hours notice," says Mr Pinches. "We even get requests for machinery on the morning its wanted – thats just unrealistic. A day or twos notice can make all the difference."

His maxim for customers in this situation? A months notice confirming that a particular job is wanted; a weeks notice to firm-up plans; and a days notice to confirm that all is ready.

Inevitably, pressure to keep charges in check is intense; covering investment and running costs, and earning a decent living from contract services, involves a fine balance between volume and the rate for the job.

"We havent moved on straw baling for several years but thats only because weve been able to get more and more work out of more productive machines," explains Mr Pinches. "The danger of keeping too tight a lid on charges for work where it is more difficult to increase productivity is that volume has to be increased to make it pay and you then put the quality of work and service at risk."

In the end, effective use of contractors comes down to a relationship that is realistic about what can be achieved and recognises that both parties have a part to play in making the relationship work.

Contractor benefits

&#8226 Capital otherwise spent on machinery can be used more productively.

&#8226 Known costs with no hidden extras for repairs, maintenance or replacement of worn parts.

&#8226 No management time involved in organising men and machines.

&#8226 Opportunity to try techniques without committing to machinery purchases.

&#8226 Total flexibility in field work capacity to match annual variations in cropping and weather conditions.