Getting into Contracting

Agricultural contracting is an industry full of innovative individuals, always looking for the next opportunity, whilst supplying farmers with a source of skilled labour, high capital cost machinery and professional services, effectively operating as ‘farmers without land’. 

 It is estimated that 91% of UK farms now use a contractor, with National Association of Agricultural Contractors (NAAC) figures suggesting that contractors apply 70% of slurry, harvest 85% of sugar beet and buy 98% of self-propelled forage harvesters.  

 Contracting can take a number of formats from businesses offering individual specialist farming services (such as drilling, harvesting or crop spraying, either uniquely or as a package); to more complex contract, whole farm and joint farming arrangements. All have become an integral and important part of farm business management. 

 So where do you start if looking to become an agricultural contractor? 

 According to Charles Baker, Managing Director of R C Baker Ltd and NAAC Chairman, ‘Contracting can be a viable option for enterprising new entrants, providing they go in with their eyes open, do the right research and ensure there is a market for the services proposed. Commitment is essential from clients, ideally for five years if whole farm contracting, to allow for confident investment in new machinery and labour.’ 

 ‘Getting the costings right is then a vital step to make it work. Overheads can be crippling and, with machinery replacement costs escalating at 5-6% each year, it is critical that jobs are carefully calculated to make certain that capital is wisely invested and a return is possible. If it doesn’t pay, why are you doing it?’ 

 NAAC’s Top Tips when starting out as a Contractor 

  1. Identify a market for your services, before you invest in machinery. Try not to just offer the same services as your local, already established, contractors – a niche market is ideal. Competition is healthy but if your local contractor has loyal customers you may struggle to get work unless you seriously undercut and that is usually dangerously unsustainable (see below).  
  2. Know your costs. Make sure they are your costs as everyone’s business and aspirations are unique and be certain you account for everything including labour (and yes that includes your time if self-employed), depreciation, fuel, maintenance, tyres etc.  

Account for ‘dead time’ when you are not directly earning money. As a contractor, especially if employing staff, you can have considerable time travelling or doing repairs and maintenance work, or standing in the yard waiting for better weather.  

 Costs need to be worked out to know the rate each job needs to be charged to break even. A margin must then be added. You should not be tempted to under-cut other contractors just to gain swathes of hectares as it can quickly degenerate to just a short-term numbers game. Vast amounts of hectares worked mean little if there is no profit or income to reinvest, making the business unsustainable and inevitably fail. 

3.Invoice promptly. There is nothing to be gained by doing 60+ hours a week in the tractor seat if your paperwork is weeks out-of-date and invoices are not being sent out. Your business will not survive without income as you will continue to be billed for finance, fuel etc. Prompt invoicing is a sign of a well-organised, professional business. If there is the opportunity, get invoices out as soon a job is completed. If you are too busy, consider getting outside help to keep on top of the paperwork. 

4.Chase payment. Your customers will expect to pay when a professional job is completed. A creditor’s money is a far cheaper source of cash flow to a contractor than a loan from the bank!  

5.Get Properly Insured. Inevitably things can go wrong and it is necessary to be properly insured for the operations you carry out. We all make mistakes but in contracting these can be expensive. 

6.Be Safe. Working alone for long hours can be a perilous occupation, both mentally and physically. Don’t take risks, as the time saving will never be worth the price you pay by cutting corners on safety for you or your employees. Get ahead on the health and safety paperwork before the physical workload becomes too pressured, as it is important to keep up-to-date, be well aware and avoid risks. 

7.Be well-informed and enjoy it! Contracting has the potential to prove a fantastic way of life if you are forward thinking and take a professional approach. Take the opportunity to network with other contractors and get as much information on legislation, safety and technical issues as you can absorb. Join the NAAC to keep up-to-date on contracting issues, giving you access to a range of services such as a transport helpline and member’s health and safety package. Get involved with meetings and training events to be social, keep you well informed and keep looking ahead to new innovative ideas and technology. 

 

No Excuses  – When it comes to Safety

No Excuses  – When it comes to Safety

Time never stands still for agricultural contractors. The British weather keeps them under constant pressure and there is always another customer waiting for them to arrive. Maintaining a professional service can be difficult when working long hours, whilst managing a team of operators working in a variety of locations.

However, it is vital that safety remains a top priority when planning work and organising machinery and staff, as there can never be any excuse for cutting corners.

Prior training for the team will stand the business in good stead, but it is important to have regular refreshers to make sure that standards don’t slip if work pressure increases. Machinery must be kept in roadworthy condition at all times and operators must be instructed to take care to switch off before any repairs or unblocking is carried out. Whilst it may be tempting to save a few precious seconds the consequences can be devastating. In addition, it is important that each new customer supplies instructions about potential hazards to avoid ‘accidents’.

Whilst not an exciting prospect to implement, high standards of health and safety must be a top priority for every contracting operation and the NAAC has been assisting its membership, with a free package available to all members. This gives them detailed instruction to put together their own tailored records, alongside free access to a health and safety consultant, encouraging businesses to take responsibility and ownership of their own safety procedures.

We have all seen the statistics in the press that farming has the highest fatality rate per head of workers. We read far too regular reports of deaths in our industry, indiscriminately claiming the lives of children, parents, husbands, wives and grandparents, yet it seems we may be becoming immune to these horrifying facts.

We are expert at absolving the blame, taking a somewhat macho attitude to safety, convincing ourselves it’s because we work alone, or have an ageing workforce or perhaps that we are under work stress and therefore cutting corners is acceptable? Well it really isn’t. For those families that have suffered the trauma of losing a loved one, or a valued member of the team, no amount of time saved will have been worth it.

Accidents do happen, but not at the rate of shocking statistics we see in agriculture. It is time to stop making excuses and take full responsibility. Contractors can lead the way, setting an example with professional standards and making certain that they work in partnership with customers.

We urgently need to encourage new entrants to farming and so we must take proactive steps to equip everyone with the confidence to question unsafe practices and make our industry a much safer place to work.

 

Jill Hewitt is the Technical Consultant at the National Association of Agricultural Contractors (NAAC) and has worked alongside agricultural contractors for eighteen years.

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For further information contact:

Jill Hewitt, NAAC Technical Consultant Tel: 07889 511245 email: jill.hewitt@naac.co.uk

Charles Baker – New NAAC Chairman

Charles Baker – New NAAC Chairman

 

Looking ahead and seeking new opportunities has been key to Oxfordshire-based contractor Charles Baker’s business and, as newly voted in Chairman of the National Association of Agricultural Contractors (NAAC), his forward-thinking approach will be vital in tackling the current challenges facing the industry.

 

‘In my term, my aim is to significantly increase NAAC membership, as the best way to represent our sector is to have a strong and powerful voice,’ commented Mr Baker. ‘Inclusion in the political arena, particularly at this crucial point in agricultural history, is so important and I cannot emphasis enough to other contractors the importance of getting involved and pushing our sector in front of politicians and the Government. We are a professional and vital part of the agricultural industry, with an estimated 91% of farmers using our services and it is crucial that we can be formally recognised as ‘farmers without land’, having become an integral part of farm business management.’

 

‘We must stand together, united as professionals, and be enabled and financially supported through changing agricultural policy so that contractors can feel confident to invest and take brave but well-thought out decisions to support the farming industry, bringing forward new technology and machinery, alongside skilled and trained staff.’

 

In his own family run business, R C Baker Limited, Mr Baker is no stranger to innovation and, since the company’s formation in 1974, he has strived to offer new services to his customers, always on the lookout for productive and profitable opportunities that can add value to his farmer customers. Niche markets have been important to the business and, following the dairy industry crash in the early 90’s, when almost half of the silage business was lost overnight, restructuring was necessary which saw R C Baker diversify into plastic recycling, environmental work and, later, establishing itself as a specialist in the application of organic fertilisers, importing the UK’s very first Xerion/Kaweco tanker in 2008.  In 2009 this growth and achievement was recognised when RC Baker Ltd won the coveted Farmers Weekly Contractor of the Year Award.

 

Today, Mr Baker works closely with his children Christopher, Stephen and Jennie as they continue to grow the business, aiming for a 30-50% growth in the next ten years.  There are few jobs they can’t tackle, with their impressive and extensive line-up of kit, but they continue to focus on customer service and satisfaction.

 

Visiting clients is where Mr Baker now spends much of his time, having stepped slightly back from the day to day management of the business, alongside offering his expert guidance and new ideas.

 

‘It can be hard not to interfere but I have complete confidence in the family and I am delighted that, after twenty five years as a member of the NAAC, I now have the time to give something back through the Chairmanship. I am looking forward to driving the Association forward through this historical era in agriculture and, with the support of the NAAC team, I am passionate about putting the NAAC and contractors firmly on the political agenda.’

 

 

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For further information contact:

Jill Hewitt, NAAC Technical Consultant Tel: 07889 511245 email: jill.hewitt@naac.co.uk

Issued by: Springtime Consultancy

Once in a Lifetime Opportunity for Contractors

The National Association of Agricultural Contractors (NAAC) is calling upon all agricultural contractors to help influence Defra and get recognition in future agricultural policy, unlocking potential funding to help business have a more stable future. 

Commenting, Jill Hewitt, NAAC said, ‘For years, contractors have been specifically excluded from most agricultural funding under EU law and therefore unable to access grants for capital investment, upskilling or innovation. However, with Brexit negotiations we now have the opportunity to make a positive change and it is important that we all act together.’ 

‘An estimated 91% of farmers now use a contractor’s services and it is vital that they are included in the development of new policy and legislation. The future of UK agriculture must embrace professional contractors as we can provide solutions to rural and environmental issues eg skilled, trained labour or high tech, innovative machinery and specialist services.’  

Defra is currently consulting on ‘Health and Harmony: the future for food, farming and the environment in a Green Brexit’:  https://www.gov.uk/government/consultations/the-future-for-food-farming-and-the-environment 

This is an open consultation on future agricultural policy and payments. The NAAC is meeting senior Defra officials and will be submitting comments on the consultation to represent contractor’s interests but it is also important that individual contractors respond to strengthen the case.  

Contractors are urged to spare half an hour to have a read and send individual comments to: agricultureconsultation@defra.gsi.gov.uk 

The deadline is 8 May 2018. 

 

NAAC announces speakers for Contractor 2017

The NAAC has announced its speakers for Contractor 2017, to be held on 14th December at the Peterborough Showground.

The Contractor 2017 event is being held in partnership with John Deere and is the only national event for the professional land-based contractor.

Urging all UK Contractors

I urge all UK contractors to come along to Contractor 2017 on 14th December 2017 at Peterborough Showground and join us at the only event focussed entirely on agricultural contractors. We may be ‘Farming’s Best Kept Secret’, but we must not be kept hidden away or be forgotten about when it comes to farming policy, industry development and potential financial handouts.

With an estimated 91% of farmers using a contractor, we are an important part of the industry and many sectors are becoming increasingly reliant on our services. It is therefore vital in challenging political times that we stand together and fight to make sure our unilateral voice is heard.

This year’s event promises to be both controversial and stimulating, focussing on the future for contractors. The NAAC will examine the impact of challenges in the farming industry and the influence of Brexit, putting together a package of information from leading experts to help contractors make informed decisions how to take their businesses forward.

We are putting together high profile speakers, together with a huge exhibition hall jammed with exhibitors supplying machinery and services to contracting businesses.

Whether you are well-established or just starting out, a large business or a one-man band, I urge you to support your industry and join us at a day out you cannot afford to miss.

Martin Hays

NAAC Chairman

NAAC announces John Deere as new partner for Contractor 2017

The National Association of Agricultural Contractors (NAAC) is delighted to announce John Deere as a new partner for its national conference and exhibition, Contractor 2017, being held at the East of England Showground on Thursday 14th December 2017.

The event, aimed specifically at contractors, will address the important role that this sector plays in the industry and examine how they may need to adapt to the changing needs of the farming industry post Brexit.

‘This is an exciting time for all involved with agriculture,’ says NAAC Chief Executive Duncan Russell ‘and it’s great to announce that John Deere, a name highly regarded by contractors, will partner this important event for the industry.’

Chris Wiltshire, John Deere’s Marketing Manager said ‘We’re very pleased to be associated with Contractor 2017, a specialist and unique event aimed at an increasingly important sector of the farming industry.’

John Deere will be showcasing new products aimed at contractors and large farmers to help improve the efficiency and management of modern agricultural machinery.

This is a must-attend day for contractors, featuring high profile speakers in the morning conference and a large exhibition of contractor specific machinery and services, with additional transport focused discussion and debate in the afternoon.