AGRICULTURAL contractors have been urged to 'look hard' at their prices – because they are currently not charging enough

Publishing the National Association of Agricultural Contractor’s 2017 charges, chief executive Duncan Russell, warned that the time was coming that price increases would be inevitable.

"We are seeing rapidly increasing machinery purchasing costs, alongside hikes in spare parts and tyres, which simply cannot continue to be absorbed by the contracting sector," said Mr Russell, who reported that contractors were accommodating farmers' desire to have the latest kit and technology used on their farms – which came at an added cost.

NAAC chairman and contractor Martin Hays commented: "I just want to provide a good service, on time, to my customers. This is what most contractors want, while still earning a living. However, as machinery costs continue to climb, alongside the costs of other inputs, I am having to look hard at my charging schedule, and other contractors should be doing the same."

On the costs of machinery, Mr Hays added that these were increasing all the time: "When it comes to upgrading or trading machines and tractors in coming months and years, we may easily find our costs have fallen behind and we cannot make up the shortfall.

"Farmers will have exactly the same problems, and we need to work together so that contractors can make those long term investments in labour and kit to keep the farming industry sustainable for the future."

But while many contractors in Scotland agree that price increases were now needed, most of them felt that it was simply not viable due to how competitive the market had become.

Pete Smart, of Peter Smart Contracting, Nairn, said that raising prices would be of a benefit to his business, but it was difficult to do so as there were always other contractors willing to undercut: "Although it would be great to be able to increase prices, you would end up with no work, because there is always someone willing to do the work for less money.

"The only occasion that prices can be really reduced is when you are being offered contracts that are covering a lot of acreage.

"I am really lucky because I have so many loyal customers, but I think for other contractors looking to get new work, it must be so difficult because even though they may think their prices are very cheap, there will always be another contractor more than willing to do it even cheaper.

"It's also difficult because the price of machinery is a lot more expensive compared to what we actually make in return," said Mr Smart.

Mr Smart stressed that farmers were not to blame for this unsustainable competition – it was simply that they were not paid enough themselves: "I think that to help the agricultural industry, as a whole, farmers need to be paid a lot more for what they are doing, and that is the bottom line.

"At the end of the day, we could all charge a little bit more for our services, if farmers were able to afford it, but until they are paid more, we can't charge more. It's a shame, really, because farmers work bloody hard and don't get paid nearly enough!"