LANDDEALSLOOKGOODDESPITEAHARDYEAR
LANDDEALSLOOKGOODDESPITEAHARDYEAR
DESPITE another difficult year farm management agreements organised by Bidwells have performed well, says Cambridge-based Richard Potter.
Developed 30 years ago, Bidwells farm management agreements normally run for a three-year term, the land occupier providing land and finance for input purchase, while the contractor undertakes to provide labour and machinery.
An agreed fee for providing labour and machinery on a stubble to stubble basis is paid to the contractor before profits. The land occupier then receives prior charge on profits, any surplus being split on a percentage basis.
Land occupier returns for harvest 1999 equated to £261/ha (£106/acre), while contractors received £294/ha (£119/acre) for their input. "These are very encouraging results, bearing in mind these figures average across all crops, including roots," says Mr Potter.
Last years dramatic fall in cereal farmer incomes was largely offset by improved yields, says Mr Potter. That kept the reduction in income for land occupiers to just 1.8%.
Finer details on arrangements are subject to negotiation," says Mr Potter. "Depending on the land occupiers view to risk, he may want a relatively high first charge but be prepared to forego any substantial percentage of the remainder, and visa versa."
Contract managers can operate successfully for a total return of below £300/ha (£120/acre), provided additional land is taken on without increased machinery investment or employment of extra labour, he adds. *