24 March 2000

Gain the benefit of outside expertise, says ADASexpert

Using contractors and other

forms of machinery sharing

could give a powerful boost

to your bottom line, argues

ADASs John Bailey.

Mike Stones reports

CONTRACTORS. You thought about using them in the past. Even tried them once or twice to cover for breakdowns. But now could be the time to base some or all of your machinery policy around their services, says ADAS machinery specialist John Bailey.

"Too often in the past, pride has stopped many farmers making greater use of farm contractors. But with the current farming crisis, many more farmers would benefit from incorporating contractors services into their machinery plans," he says.

Mr Bailey suggests a simple rule of thumb to help decide whether they could, or perhaps even should, play a greater role on your farm. Judging by the latest Cambridge University Farm Costings, covering mainly cereal farms, the costs of labour and machinery total £350/ha (£142/acre) which is 60% of fixed costs.

Figures for mixed cropping (potatoes and sugar beet), dairy/arable and other specific farming soil types are significantly higher. These average costs have not reduced in recent years.

In the present climate thats much too high, says Mr Bailey. The farmers own manual labour, as distinct from management input, is becoming increasingly significant but is over and above those figures. "Its important to maintain labour and machinery costs at about £250/ha (£101 /acre). And the best operators are cutting these costs to as low as £200/ha (£81/acre)."

He believes the key to survival, in arable areas at least, is to increase the number of acres covered by each and every machine. And for many producers that will inevitably mean making greater use of machinery sharing whether in the form of contractors, machinery rings or voluntary inter-farm agreements. "Everyone who is looking to stay in farming in the long term is now looking to expand to spread their costs over a wider area. Not all will be able to do so; some need to become much more efficient on their existing acreage.

"Using contractors can help them do that while making the most efficient use of labour and machinery resources," explains Mr Bailey.

When you hire a contractor you get not only a machine but also a skilled operator along with it, he adds. That can go along way towards meeting peak labour and machinery requirements in the autumn and at harvest without the expense of paying for them throughout the year.

Also contractors higher capacity kit, whether bigger horse-power tractors or primary or secondary cultivation equipment and drill combinations, could help some producers achieve the earlier drilling dates that agronomists say are so crucial to attaining top yields. Also on average that will be under drier, more satisfactory conditions for establishment.

"Often the high work rates of contractors and their highly competitive charges mean that its cheaper to use them for ploughing and cultivating as well as other tasks than to do the job yourself."

Similarly, when a member of farm staff retires or leaves, it must make sense to consider not replacing them and make greater use of contractors, advises Mr Bailey.

"When your business is under pressure, its so important to ask these machinery and labour cost questions immediately, rather than to hope for a favourable wind and trust that things will work themselves out. They seldom do, so it will pay to be ahead of the game."

In fact, the power of these arguments continues to wear down farmers traditional resistance to the contracting sector, he believes. "The time has come to question your super independence as the uncertainty surrounding farming continues. More farmers are seeing the very competitive rates on offer and deciding to take advantage rather than buy that new machine or replace a member of staff who has retired," says Mr Bailey.

If you are going to use contractors, treat them fairly and give them plenty of advance warning, he advises. "Dont use them as a fire brigade measure. Plan their requirement well in advance, pay promptly and they will look after you. Only then can you be really critical if they dont deliver."

Pointers for a successful contractor/farmer relationship

&#8226 Plan well ahead.

&#8226 Involve your contractor in key decisions.

&#8226 Notify and agree changes to plans.

&#8226 Hold meetings to discuss past performance and forward plans.

&#8226 Pay promptly.

POINTERS FOR SUCCESS

&#8226 Plan well ahead.

&#8226 Involve your contractor in key decisions.

&#8226 Notify and agree changes to plans.

&#8226 Hold meetings to discuss past performance and forward plans.

&#8226 Pay promptly.

When you hire a contractor you get not only a machine but a skilled operator," says John Bailey.