Business Clinic: Make your contract farming tender stand out

Whether you have a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Here, Douglas Ogilvie, director at Savills for rural, energy and projects advises on how to make a contract farming tender shine. 

Q How do I make my contract farming tender stand out from the others?

A Contract Farming Agreements (CFA) have been around for a long time. Most opportunities are not advertised on the open market; instead, a small number of local farmers or contractors might be approached directly.

First you – a farmer looking for a contract – need to get onto the agent’s mailing list, so you should contact agents in the area where you are looking for work, take the time to go and see agents or invite them out to your farm so they can put a face to a name and find out what you are after and where.

This is effectively your first interview, so present yourself well and be prepared to show you know what you want.

A polite, short e-mail sent whenever you are looking for work would not go amiss either.

Douglas OgilvieDouglas Ogilvie
Director, Savills Food and Farming

When an opportunity arises you need to make your offer stand out from the others – the main aim is to get to the first and then the second interview, which will probably be at your own workplace.

That’s your opportunity to show off how you currently farm. Attention to detail is crucial – don’t show anything you are not proud of.

When it comes to choosing between two potential contractors who are close, the smallest of things can mean the difference.

See also: Business Clinic – What are my options on vacant farm buildings?

If attending an open day this will be the first unofficial interview, beware of seriously reducing your chances by saying the wrong thing as part of a casual conversation.

Also, make sure you do your research on local markets to show your understanding of the area.

The offer needs to be clear, concise and must include everything that is asked for.

Make sure the arithmetic adds up, it’s amazing how often this is not the case.

Keep your experience to date short, but list your achievements. Including colour photographs in your tender may help.

Realistic yields

Build your offer up starting with gross margins using realistic yields, lambing percentages, variable and fixed costs. You need to know what is required for the CFA to breakeven.

Once you have that figure, look at how much you can offer the farmer as a basic return or first charge and then how you split the divisible surplus. Do not be too greedy once you’ve made a surplus – show the farmer that if results improve, you are prepared to give them more of the divisible surplus.

Remember this could be a one-off opportunity to expand your business, a way of getting onto the farming ladder or an opportunity for a son or daughter to start under your guidance.

Get someone to look over your proposal to check it and then practise interviews.

Always be wary of the question “why should we choose you?” and be prepared – good preparation can make all the difference.

Finally, it is not always the highest offer that is accepted, it’s the right person for the right job. Trust and personality are the key.

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