With the loss of BPS, high input prices and increased machinery costs, now could be a good time to consider a change in your farming business. If your current machinery fleet is coming up for renewal, you want to sharpen your costs or you’re looking to relieve your workload. A Contract Farming Agreement might be the solution to meet a number of objectives while still retaining your status as a Farmer.

How do Contract Farming Agreement work?

A farmer instructs a contractor to undertake the practical operations and management of a crop or other enterprise within the farmer’s stated policies.

Roles and operations are defined by the contract between farmer and contractor. The crop or other produce is the farmer’s and the contractor provides labour, machinery and any other services specified on an agreed basis for remuneration.

Key points

1. The instructing farmer is and remains the responsible person with financial risk from the outcome of farming.
2. The contractor is a supplier of services to the farmer.
3. The contractor’s role is defined by the contract and has access to the land by the farmer’s consent.
4. A good working relationship and liaison between the two parties is essential to make this work, aided by prior agreement on expectations and responsibilities.

How can Bletsoes help?

Bletsoes can advise and talk you through how a Contract Farming Agreement (CFA) works highlighting the potential tax benefits and will explain in detail each parties’ responsibilities. We can create and implement the contract agreement and ensure that the agreement works for both parties.

CFA Management

We can simply set up the new agreement or we can provide a management service ensuring that everything runs smoothly running a comprehensive cash book which can then be used to complete a computation of figures to work out a profit share for the growing year. We will be able to provide a schedule of performance giving you an insight into yields and costs.

Rob Russell

Agri-Business Consultant