3 March 2000

How hybrid deal suits both

In the second article in our

series examining alternative

methods of arable farming

Robert Davies reports from

Worcestershire on a novel

approach to smaller-scale

cropping that suits

landowner and

contractor admirably

BY setting aside unproductive land and creating an incentivised stubble-to-stubble deal with a trusted contractor one Worcs landowner is boosting farm income without investing in equipment.

For other growers it could provide a way of increasing income by releasing capital and costs tied up in machinery and labour.

When Caspar Tiarks sold his original farm in the Vale of Evesham more than 10 years ago he thought he had quit farming. Then he bought Rodge Hill Farm at Martley, Worcs, in 1992 and things started to change.

He and his wife bought the unit for its house and fine views. The 72.7ha (180 acres) of land was in five-year set-aside.

For two years a local contracting company run by the Bray family topped the fields as required. But Mr Tiarks became unhappy with the prairie-like outlook.

"Rodge Hill has clay over limestone brash and I describe it as honest wheat growing land. It produced the first recorded 4t/acre yield in the world and it seemed wrong not to use its productive potential to get more income than came from set-aside."

Involvement in a property development business meant he was reluctant to start day-to-day farming again.

"I certainly did not want to spend a lot of money on machinery and with the timing of cultivations, spraying and harvesting so important I did not like the idea of being totally dependent on busy contractors."

Instead, he suggested a hybrid share farming/contract farming agreement. The idea was to allow Mr Tiarks to continue to be a working farmer for tax purposes, but to let the Bray family be contractors with their income decided by how well they carried out operations.

The contractors machinery and labour costs were found to be very similar to the £216/ha (£90/acre) rent the land would have commanded on the local market, so both charges were excluded from the financial equation.

It was then agreed that certain fields and less productive headlands should not be cropped. Although Mr Tiarks felt 6m set-aside headlands would have been enough, IACS regulations demanded 20m (62ft). The result is 29% of the IACS area in set-aside, two-thirds being whole fields.

Payments go to the landowner, with the Brays responsible for compulsory set-aside mowing in July and August and having free use of the grass between September and January.

Mr Tiarks is responsible for all drainage, ditching, hedging, building maintenance and book-keeping. Area aid payments on wheat and break crops are split equally, as are bills for seed, fertilisers and sprays. Orders are placed by Richard Bray.

"We do not have a written contract, but I believe the arrangement works brilliantly," says Mr Tiarks. "The best land is producing an average yield of about 9.6t/ha of first and second wheats. Despite low market prices the cultivated land is making more money than it would as set-aside."

With crop income split the contractor has an incentive to carry out operations at the optimum time, Mr Tiarks notes. Last harvest three combines cleared 30.3ha (75 acres) of wheat in eight hours when moisture levels were right, for example.

In 1998/99 costs for the 46ha (115 acres) of cropped land were £10,615 (see table).

The wheat yield was lower than usual and the linseed was disappointing. But with some wheat and linseed still to sell Mr Tiarks estimates that 275t of Rialto wheat should average £74/t and the 28t of linseed £80/t. Wheat area aid amounted to £6344 and linseed aid £5473.

Total income from cropping, including aid, was £34,407, or £23,792 after costs, leaving £11,896 for each party. That works out at £247.20/ha (£103/acre) for Mr Tiarks, which despite the lower than expected yields and poor prices was still £15/ha (£6/acre) more than under set-aside. In a better year the difference could be significantly more.

"The whole system works very well for us, though a lot of trust is involved and it would not suit everyone. It is now hard to justify investment in machines on even 1000 acres of arable, so this sort of arrangement is worth thinking about," Mr Tiarks concludes.

Tiarks/Bray system

&#8226 Landowner involved, but not hands-on.

&#8226 No investment in machinery.

&#8226 Contractors margin depends on doing operations at optimum time.

&#8226 Poorer fields and less productive headlands excluded.

&#8226 Farm looks much better than under set-aside.

&#8226 Income increased by cropping.

Costings 1998/99 (£)

Input costs on 46ha (115 acres): £/ha(£/acre) £ total

lime 12 (5) 556

seed 37 (15)1,686

fertilisers 71 (28)3,267

Others inc sprays 111 (44)5,106

TOTAL 231 (92) 10,615

Estd return 748 (299) 34,407

Net return 517 (209) 23,792

Landowner return 247 (103) 11,896

Return on 26.7ha(66 acres)set-aside 232 (94) 6,204

Extra return from cropping 15 (6) 690

NB: £/ha and £/acre figs rounded to nearest £.

Costings 1998/99 (£)

Input costs on 46ha (115 acres):

£/ha (£/acre) £ total

Lme 12 (5) 556

Seed 37 (15) 1,686

Fertilisers 71 (28) 3,267

Others inc sprays 111 (44) 5,106

Total 231 (92) 10,615

Estimated return 748 (299) 34,407

Net return 517 (209) 23,792

Landowner return 247 (103) 11,896

Return on 26.7ha (66 acres) set-aside 232 (94) 6,204

Extra return from cropping 15 (6) 690

NB: £/ha and £/acre figs rounded to nearest £.


Input costs on 46ha (115 acres):

£/ha (£/acre) £ total

Lme 12 (5) 556

Seed 37 (15) 1,686

Fertilisers 71 (28) 3,267

Others inc sprays 111 (44) 5,106

Total 231 (92) 10,615

Estimated return 748 (299) 34,407

Net return 517 (209) 23,792

Landowner return 247 (103) 11,896

Return on 26.7ha (66 acres) set-aside 232 (94) 6,204

Extra return from cropping 15 (6) 690

NB: £/ha and £/acre figs rounded to nearest £.

TIARKS/BRAY SYSTEM

&#8226 Landowner involved, but not hands-on.

&#8226 No investment in machinery.

&#8226 Contractors margin depends on doing operations at optimum time.

&#8226 Poorer fields and less productive headlands excluded.

&#8226 Farm looks much better than under set-aside.

&#8226 Income increased by cropping.

Unhappy with the sight of overall set- aside, Caspar Tiarks decided to embark on a joint venture with a local contractor. Now the farm, with some headlands still in set-aside looks much better. And despite low grain prices it is producing a better income to split between both parties.