Arable
Arable profits give best performance in three years ferent to that which has been familiar for two generations of farmers.”
new research from land agents and farm business consultants Bidwells. Net profi ts rose sharply in the
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last year, leading to better returns for farmers and contractors, ac- cording to analysis of fi nan- cial results from contract-farm- ing agreements covering nearly 14,000ha of mainly ara- ble land.
“These fi nal results from the 2017 harvest – the last sales from which have been made this spring and summer – show the best per- formance for three years,” said Bidwells partner and farm busi- ness consultant Ian Ashbridge (pictured).
Stronger crop prices and slightly higher support payments contributed to a signifi cant im- provement in total income, which climbed £177/ha in 2017-18 – to some extent refl ecting a turna-
round in arable farming profi t- ability
“Overall average net profi t across all farms in the study was £470/ha, a signifi cant improve- ment on the £293/ha the previ- ous year. In almost all cases the farmer received their fi rst charge on profi ts, in full, with some ra- teable profi t for the farmer and contractor to share.”
But direct support from Brus- sels continued to be a major con-
rable farm profi ts have improved sharply in the last 12 months, suggests
tributor to total income, said Mr Ashbridge. Robust planning was needed to prepare for a post-Brex- it era where farm subsidies could not be relied upon in the same way, he added.
Business structures, strate- gies and balance sheet sensitiv- ities now should be examined to prepare for any changes. “Govern- ment has revealed enough about its future plans to allow farmers a limited amount of time to make changes to their businesses, but this will soon elapse.” Defra secretary Michael Gove intends to replace direct support made under the basic payment scheme with a new system large- ly based on requiring farmers to undertake environmental meas- ures on their land in return for public money. Mr Ashbridge said: “One thing most people expect of the forth- coming Agriculture Bill, is that the future farming environment in the UK could be radically dif-
Contract-farming agreements are typically renewed on a three- year cycle. The large number of farms within Bidwells’ study means that only a proportion of the agreements are renewed in any one year, and changing terms are refl ected only partially in an- nual results. This means that trends in the way agreements are structured can take several years to feed through into farms’ fi nancial results. The average contractor’s
charge, which is the basic fee for establishing, managing and harvesting crops and does not include any element of profi t, grew by £17/ha (£6.87/acre) on the year, to a level more consist- ent with 2014 results. These ba- sic contracting fees will be sub- ject to negotiation in agreements being reviewed this summer and autumn.
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www.aggmax.co.uk 24 ANGLIA FARMER • AUGUST 2018
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