‘Growing crops on contract presents a win-win opportunity’

Growing crops on contract presents a win-win opportunity for both livestock farmers and tillage farmers in 2018, according to Teagasc.

Earlier today, Teagasc launched a new contract forage template – which it recently developed.

It is hoped that this template will provide a methodology where both the grower and the purchaser can be confident the contract contains the most important points to agree and is in an easy-to-use format to sign when completed, Teagasc explained.

Livestock farmers need to build up winter feed reserves for next winter and, with the closing of silage ground already behind, contract cropping can be used in some situations to fill the gap.

“For farmers who have been battling the elements to source fodder and also to cope with very poor grazing conditions, it is hard to turn attention to next winter.

“Heavy land has been too wet to fertilise for silage and many farmers have little, or no, land closed up for silage at this stage.

“The Teagasc Profit Monitor figures show that contract cropping can be a very profitable and sustainable enterprise for a tillage farmer, where it is done well. Some tillage farmers have built up a trusted customer base for maize and beet grown on contract,” it said.

‘An alternative for tillage farmers’

Due to the inclement weather experienced in recent months, the planting of cereals is well behind where it normally would be.

It is believed that contract cropping will present an alternative for tillage farmers in 2018 who are facing such delays.

Continuing, Teagasc said: “While it is getting late for sowing beet at this stage, the timing is right for the sowing of maize for silage. Tillage farmers can consider growing maize on contract instead of sowing late cereal crops.”

Image source: Shane Casey

A structure for a tillage farmer and a livestock farmer to negotiate a “bespoke agreement” is provided in the contract cropping template agreement. In this agreement, the farmers set a price and the payments are made in three instalments.

Reacting to the announcement, Thomas Curran – a Teagasc farm business structures specialist – said: “This is to help the cash flow, while also cementing the commitment of both parties to the agreement.

The agreement also includes the commitment to grow and supply a specified tonnage on the date of harvest.

The intention is that this agreement – like any collaborative arrangement – must benefit both farmers and be built on honesty, trust and good open communication during the lifetime of the agreements, Teagasc added.

The template can be downloaded from Teagasc’s website for free.