22 May 1998

Outside management looks set to increase

MORE farmers are set to use management contractors as the tough times bite. Over 15% of arable producers were prepared to consider the idea, the NFU revealed at a recent Farming Economy 1998 conference in London.

Results of a survey released for the first time in the NFUs Farming Economy 1998 report, shows the drive to maintain profits was the main reason, together with a wish to pursue other interests and be free of management pressures. "Some farmers are clearly feeling the strain of financial, health and legislative pressures," said Tony Donaldson, NFU senior economist.

Other factors are the increased expertise available, a wish to retire while keeping control of the business and tax advantages.

Stumbling blocks, however, include satisfaction gained from farming and a belief in ones own ability. "To many farmers, to turn to a contractor would be tantamount to an admission of failure," said Mr Donaldson.

While 15% of farmers would consider the idea of contract management, only 3% had, so far, taken up the option. Increasing cash-flow problems could persuade more to move. Similarly, growing animal welfare, pesticides and food safety legislation would have an effect, Mr Donaldson predicted.

Of those surveyed, 60% said they would use a neighbouring farmer, while the rest would opt for a company (such as Sentry Farming or Velcourt).

Such big outfits are bullish about growth. They believe they can expand by 15%-20% a year. Bulk-buying discounts for inputs, which could save 10%-30%, will help further.