Over the past year, the general message from the farm contracting industry has been one of uncertainty as high profile businesses sell up and dealers report a renewed interest in farmers taking back control of the timeliness of operations.
This has not been helped by the high price of machinery which has both deterred the purchase of new equipment and made the disposal of current fleets an attractive proposition.
Staff and training
John Hughes of Kilkenny, who heads the Association of Farm and Forestry Contractors in Ireland (FCI) is fully aware of the situation and as a staunch advocate of the industry, he would be delighted to have an easy answer, but there is none.
Every industry faces challenges of one sort or another, yet he identifies some major concerns within farm contracting that need to be addressed urgently, if it is not already too late.
The first is that great bugbear of our time – staffing. This issue has many facets and picking a way through the jungle reveals a whole host of seemingly intractable problems starting with the disinclination of school leavers to consider working within the industry.
John sees a major reason for this as there being no clear career path. It is seen as a job involving long unsociable hours that are not commensurate with lacklustre rewards, rather than a bright shiny future that involves a decent lifestyle.
Tech ability essential
This problem is compounded by the need for people with a good technical ability.
Modern tractors may be wonderful things, but unless they can be set up to work at their optimum efficiency, all the techno ‘bling’ is wasted, it requires a level of expertise which is just not readily available at present.
John is adamant that the first step to attracting young people into the business is a proper training structure with a well defined progression.
By this, he means that the explanation of how a new tractor works should extend way beyond the couple of hours with a mechanic that usually passes for instruction.
He would like to see colleges become far more involved with bringing operatives up-to-date with the latest equipment, yet they will need to equip their own staff with the relevant skills and knowledge before being able to pass it on.
Fears of future staff shortages are fuelled to a great extent by the aging of the industry’s present workforce.
John himself has got to the stage where he is asking whether he wants to continue as he has done for the past 40 years, or does he want to slow down and pursue other interests?
Over-capacity in contracting to end
He points out that he is by no means the only one asking this question, but there are few people stepping forward from the next generation to fill their shoes.
Paradoxically, this has not prevented what many see as over-capacity in the industry caused, to a great extent, by farmers looking to spread their machinery costs through doing some contracting on the side.
Yet, the same problems of staffing the business beset farmers as well, so this situation cannot continue. The answer he would like to see implemented is greater professionalism throughout contracting.
This can only happen if contracting is seen as a valid industry by the government, and to a certain extent, farmers as well.
Government disinterest in contracting
The FCI has been calling for meetings with the Department of Finance as well as Department of Agriculture, Food and the Marine (DAFM) for months in a bid to have the tax breaks enjoyed by farmers shared by contractors, yet they are forever being put on the long finger.
John and the FCI members find this incredibly frustrating, and he personally feels that a good deal more needs to be done to get farm contracting recognised as an essential element of the food production chain.
They would also like to see farmers showing a little more understanding of the predicament that contractors often find themselves in.
The Irish government has long promoted the notion that there is one ideal cutting date for silage and all the grass should be cut as close to that day as possible, leading to farmers making demands upon contractors that simply cannot be met.
TAMS ups costs
Another strong criticism he has is of subsidies such as Targeted Agricultural Modernisation Scheme (TAMS) which, he argues, actually drive up the price of machinery.
His reasoning is straightforward. If a machine attracts a grant, then it encourages a farmer to buy it at full price, and that price is likely to creep up as the machinery trade takes advantage of the governments generosity. Business is business after all.
The flush of used machinery on the market also means that the farmer will get a lower trade-in for his older equipment, offsetting the subsidy to a certain degree.
It also puts the contractor in the position of having to pay more for machinery, which in turn leads to higher contracting charges.
Subsidies may not be the golden goose that many think they are.
Justifying contracting charges
Naturally, when the farm contracting industry is being discussed, the thorny issue of charges will arise and there is no doubt in John’s mind that many contractors are doing both themselves, and the industry as a whole, a disservice.
As the head of the industry’s major representative body, this is only to be expected, yet the points that are made remain valid and should not be dismissed too lightly.
The first is that, like every business, contractors need a cashflow.
Waiting for payment does not put diesel in the tanks or operators behind the wheel and he has himself walked away from jobs where timely settlement could well be an issue, and he urges his colleagues to do likewise.
Contractors also need to invest in new machinery and for that they need a margin over their operating costs.
He wonders how many actually factor this into their pricing and his organisation has taken to explaining to its members that realistic prices need to be charged if they are to even stand still, let alone prosper.
Guide price only
He stresses that the price guide issued by the FCI each year is just that, a guide, and while prices actually charged may be lower at times, they could also be justifiably higher and farmers should not hold it up as some sort of bible.
John is also a great believer in having a business plan, contracting should not be just a case of muddling through paying the bills; business principals should be aiming to improve their net worth from season to season; it’s just a hobby otherwise he suggests.
Overall, John’s message to the food production industry is that contracting is a large and essential part of bringing food to the table, and the services and skills they provide should be respected, and they should also be paid for on time.
Meanwhile, full time contractors will continue buying in larger tractors and implements for as John notes, “it is easier to buy horsepower than it is manpower”.