There appears to be an increasing trend of farm contractors exiting business, with a variety of reasons for this, according to the Association of Farm and Forestry Contractors in Ireland (FCI).
Speaking to Agriland, Mike Moroney, the CEO of the FCI, said that this phenomenon does appear to be more of a trend compared to recent years.
The trend is visible through the increasing number of auctions taking place, wherein contractors are selling off their machinery with a view to getting out of contracting.
Moroney cited four reasons as to why this is happening: Fuel costs, labour availability, natural retirement, and the prices contractors can get for machinery at auction.
The issue of fuel costs has been well documented, with Moroney saying that many contractors find the cost situation, in combination with the labour availability issue, “not sustainable”.
These issues are compounded by the fact that “the age profile of the sector is already quite high”, Moroney explained, so that natural retirement of contractors is adding to the number who are exiting the profession.
The fourth reason is the current high cost of machinery which, from the perspective of the seller, offers contractors an opportunity to get a good return on their machinery investment.
“Machinery prices have been high for the last two years. Prices are good from the seller’s perspective.
“It gives [contractors] a reasonable return on the investment. They can recover some of that,” Moroney said.
“It would be a combination of those four reasons,” he added.
FCI anger over new TAMS
Adding to concerns for the contracting sector is the new Targeted Agricultural Modernisation Scheme (TAMS), judging by the FCI’s response to it.
Following the announcement of the new scheme, the association said that, by continuing to exclude contractors from the scheme, the Department of Agriculture, Food and the Marine “has targeted the total elimination” of the sector by undermining profitability.
The FCI called on Minister Charlie McConalogue to include contractors in the €370 million scheme.
In a letter to Minister McConalogue, the FCI said that the new scheme gives an unfair advantage to farmers over contractors.