21 December 2001

Eyes are fixed on labour agencies for expansion

Growing from strength to strength – the Essex and

Suffolk Machinery Ring considers itself to be now

in a prime position to help its members fully exploit

their businesses. Andy Moore found out why

RUNNING a labour supply service within a machinery ring requires greater co-operation from training and labour agencies if it is to be successful, according to Vernon Nott, manager of the Essex and Suffolk Machinery Ring (ESMR).

"Training and labour agencies should now collaborate more closely with machinery rings to help provide new blood in farming and retrain those already in the industry," he insists.

Based near Sudbury, this year ESMR supplied over 120 workers for 31 separate jobs through agencies which provide the bulk of permanent skilled labour to its members.

The agencies pool labour from their databases and find the most suitable employee for the job required. This can vary from a farm labourer, skilled tractor driver to a farm manager – while handling National Insurance, tax and accommodation arrangements if required.

"Why should a machinery ring set up its own labour agency when a specialist agency already has the necessary skills and experience under its belt?" reasons Mr Nott. "Grants are available for machinery rings to start up an agency but with specialist agencies already involved in the game, rings are in an ideal position to take advantage of a ready-made pool of labour."

The main advantage of using a specialist rather than in-house agency is the farmer or demander does not have to pay any commission to the ring. The agency or supplier pays the ring a small commission on the turnover of the labour provided.

This, says Mr Nott, encourages greater loyalty and more demanders to use the service. The agency invoices the demander directly who pays a marginal mark-up fee on the hourly rate.

Labour business contributes over £200,000 to ESMRs turnover and is the largest growth enterprise in the rings commodity business which has sponsored suppliers paying the ring a sole commission.

Doing business in this way has enabled the ring to supply 9m units of electricity and 2m litres of fuel to its members last year.

"We co-operate with three fuel suppliers which aim to sell fuel at the most competitive cost to our members," says Mr Nott. "This arrangement allows fairer competition between the suppliers."

Also benefiting from a one-way commission fee under sponsored commodity deals are services for supplying second hand machinery, game feed, tyres/exhausts, banking, together with workshop and equipment parts.

But what about overall expansion for ESMR? Since 1993, membership has nearly trebled from 120 to 340 and turnover increased from £40,000 to over £1.1m which includes revenue generated from sponsored and commodity deals.

Once covering a 15-mile radius of Sudbury, the ring now extends over 70 miles throughout the whole of Essex, Suffolk and Cambs and part of Herts.

"The membership has increased dramatically despite the rising number of units amalgamating into shared farms," he adds. "This is because the ring covers a larger area and producers are using the ring more proactively to help cut fixed and variable costs to the bone."

Farm sizes

The average range of farm sizes in the rings area has also grown significantly, with a rising number worked under whole farm contracts, says Mr Nott.

So how will this affect ESMR? "Over the next few years we will be able to co-operate even more with our members by providing them with greater means to drive down input costs," he says. "The aim is to connect members with more specialist services such as GPS or agronomy advice in addition to operating minimal and lo-till cultivation equipment and systems,"

Some of these services are already on offer under the rings second main business – Farm Business Support.

ESMR is able to provide assistance on farm secretarial work, IACS forms and machinery management, together with advice on property, computer systems and business development.

But while such services can deliver significant benefits to large farms, Mr Nott believes the ring has an obligation to look after smaller mixed units which typically rely on a wide range of equipment.

He says this can be achieved by continuing to offer member-to-member machinery sharing and contract services which used to be the rings bread and butter business.

In addition to contracting services, ESMR is able to put its members in touch with suppliers of self-drive equipment and specialist services such as seed cleaning, rodent control and waste disposal.

"With over 8000 farms situated on our patch, the potential growth for the Essex and Suffolk Machinery Ring is phenomenal," claims Mr Nott. "More and more producers are being forced to make some tough decisions so their businesses can make ends meet in the depressed agricultural economy. ESMR is here to help." &#42

Many hands… ESMR says labour and training agencies could work more with machinery rings to help compensate for the shortfall of skilled agricultural labour.

Above left: Vernon Nott: "We will be able to help our members even more by providing them with greater means to drive down their input costs."

ESMRDATA

Manager Vernon Nott, Pelham Hall, Twinstead, Sudbury, Suffolk (01787-269686, e-mail esmr@farmline.com).

Assistant manager Paul Goodchild. Chairman Mark Ward.

Operating area Whole of Essex, Suffolk and Cambs. Part of Herts.

Farming Livestock and combinable crops.

Number of members 340.

Fees £95 annual and £20 share certificate, 2% commission on each side of transaction on core business.

Usage rate One-third suppliers.

Turnover £40,000 in 1993 and £1.1m for 2001.

Most popular services Labour, commodity supply & machinery hire.