Agri-contracting set to become increasingly important

Supporting farm income has been cited as the main reason for offering agricultural contracting services, according to a survey by NFU Mutual.

“There has been considerable growth in the agricultural contracting sector over the last few years,” explains Charlie York, agri-contracting and technology specialist at NFU Mutual. “With the phasing out of the Basic Payment Scheme (BPS) and as farmers look to new ways to operate in the future, contracting is only going to grow in its importance.”

Four in 10 (40%) of survey respondents said supporting farm income was the main driver for providing agri-contracting services, while a quarter said it was to get a foot on the farming ladder.

Charlie York adds: “Our latest survey provides clear evidence that contracting now provides a crucial contribution to many farm incomes in today’s highly-competitive marketplace. The growth in contracting also makes it possible for modern, high-tech equipment to be used to get time-sensitive jobs done safely and efficiently.

“In an era where many farms struggle to support the younger generation, our research found a quarter of respondents saw contracting as a route into agriculture. Contracting is not only providing an opportunity for young farmers to plough their own furrow in the industry but also gives entirely new entrants a chance to start a farming career.”

Nearly a fifth of survey respondents (18 per cent) said contracting offered a way to develop expertise in a chosen field, while 17 per cent said it was a way to invest in modern machinery.

Research by NFU Mutual earlier this year found 60 per cent of farmers employed some form of contractor, though the figure is probably far greater when all contractor services are taken into account.

Charlie adds: “As farm support changes to a system based on enhancing the environment, we also think it’s likely that contractors will play an increasingly important role in providing services and skills to enable farmers to qualify for payments.”

A separate survey on the criteria farmers use to select a contractor showed they are less likely to compromise standards and safety over speed. Getting the job done safely and well was the first choice for over half of respondents (51%), followed by contractor expertise (19%), while value for money took third place (18%) and lastly – getting work done quickly (12%).

“It is reassuring to see that farmers now put ‘getting a job done well and safely’ as their first priority when choosing contractors,” adds Charlie.

NFU Mutual has enhanced its contractor insurance, with policies now providing more flexible cover to cater for a wider range of contracting businesses. Optional extensions are now available which cover damage to another farmer’s crops from spray drift and protection if contractors’ activities inadvertently result in a reduction in farmers’ payments from the Basic Payment Scheme – or its future replacement.

NFU Mutual’s podcast, with host Will Evans, on agricultural contractors and their role in the farming industry can also be found on www.nfumutual.co.uk/agri-contractor. Will is joined by Ian Maddever, NFU Mutual Agent and agricultural contracting specialist, and Charlie Yorke from NFU Mutual to talk about agri-contracting, how the industry has changed and the role it now plays in the farming industry.