Contractors are quoting a “5% increase in charges” – rounded off to meet the “increases in machinery and labour costs since the start of 2019”.
That’s according to the Association of Farm & Forestry Contractors in Ireland (FCI).
Michael Moroney – the association’s chief executive – stated recently: “The increased cost of new machinery is impacting on the sustainability of many contracting businesses.
“Machinery cost increases in 2018 and into 2019, as a result of the Tractor Mother Regulations (TMR), have added to new tractor prices; these have been absorbed by contractors in their charges thus far.”
Image source: Shane Casey
He continued: “The arrival of the Revenue Commissioners’ new payroll system [from January 1, 2019] has been an added cost for agricultural contractors. Skilled operators must be paid weekly; tax returns must be issued weekly, all of which means additional cost.
“Driver availability also continues to be an issue. Moreover, the cost of farmer credit continues to rise for contractors.
“Compounding the problem is that some contractors have outstanding debt from 2018. The FCI is encouraging all contractors to issue monthly or weekly invoices, followed by monthly statements to help manage cash-flow.”
As an aid to members, the association recently published its ‘Contracting Charges Guide‘ for 2019 (below).
The association says that it is “satisfied that this averaged price guide is fair and reasonable for both contractors and farmers”.
However, the body stresses that it is “only a guide”.
Image source: Shane Casey
These FCI guide rates are now produced on an annual basis. They are compiled by collating an “average figure for each operation from a panel of FCI contractor members from across Ireland”.
Because of local variations, the FCI says that actual charges may vary considerably across regions, soil types, the distance travelled, the size of a particular job, as well as the type of equipment used.