faisal)alaniThere is still a huge gap in the profitability of the best and worst performing arable businesses, new figures from Grant Thornton show.

According to the accountant’s client profit survey for harvest 2006/07, which covered over 40,000ha (100,000 acres) in central, eastern and southern England, the top 10% of farmers made £86/ha (£35/acre) before rent, finance and the single farm payment. The bottom 25% lost £336/ha (£136/acre).

The firm’s Gary Markham said farm size and soil type played little role in the disparity, which he reckoned was largely down to poor management and lack of motivation.

Input and labour costs were broadly similar across all units, said Mr Markham. The biggest differences were for power, machinery and administration.

Too many farmers made the mistake of not using adequate secretarial assistance and ended up paying higher fees to their accountant, he said. “Our worst performing clients actually pay us more because their books are in such a mess. A farm secretary costs £12-15/hour, but an accountant will be charging £30-£40/hour at bookkeeper level.”

Joining a machinery syndicate was the obvious way to cut costs, Mr Markham said. Not only would this help gross margins, but the sharing of ideas and management skills would benefit farmers.

“You’re not losing your hands-on involvement and you don’t get the capital tax issues that come with contract farming. Your agronomy alsoimproves, as does your best practice. Many farmers would benefit.”

Mr Markham said the poorest performers had the highest non-farming income, but this was still not enough to bring their total net farm income near the best (see table).

Efficient administration in the farm office can help to boost profits.