CONTRACT farming agreements are likely to rise in prevalence as a means to combat uncertainty in the agricultural sector, a Strutt and Parker farm consultant has said.

The ability for farmers to streamline business efficiency, control costs and maximise economies of scale will become more important than ever before. Farm consultants have emphasised the need to measure and monitor efficiency in order to improve performance while Strutt and Parker’s planning expert highlighted continuing government support for enterprises such as battery storage, tourism holiday lets and hutting.

Farm consultant Stephen Whiteford said he expected to see a rise in agreements as farmers reviewed the most efficient ways in which to manage farm businesses. Highlighting some of the benchmarked figures from the Strutt and Parker annual survey which reviews the performance of CFAs under the firm’s management, he said he was encouraged that well-managed agreements north of the border were providing farmer and contractor returns that compared well with those achieved in the south east of England. The data gathered for the 2017 harvest shows farmer and contractor total returns of £353 per ha and £367 per ha respectively.

Mr Whiteford said: “Whilst we are less clear on the direction of travel of future agri-policy north of the border, it is quite possible that CFAs will become a more prevalent option for landowners and potential contractors alike as we move towards the post-Brexit era. Certainly, in respect of income, if the farmer is able to achieve returns in the region of £320/ha and above, that ought to compare very favourably with the alternative of letting arable land. It has the added advantage of being tax efficient.

“A well-structured contract farming agreement offers a means of maintaining agricultural activity for the landowner at the same time as maintaining access to potential rural development opportunities. For contractors, it offers a means of spreading fixed costs and increasing output, offering interesting opportunities for expansion.”

Farming consultant Harriet Ross urged farmers to consider undertaking carbon audits in order to assess and improve both their environmental impact and their business efficiency. She said: “We believe carbon audits bring considerable benefits when reviewing a business and demand for them is definitely rising. While they are not compulsory at the moment there is often a link between low carbon footprints and efficient, profitable enterprises and audits can highlight things that could make a big difference in running a farm.”

Miss Ross said: “They highlight elements of a business that might not necessarily be at the forefront of farmers’ minds, for example, a breakdown of the fuel used across a farmer’s business lines or the volume of fertiliser used on the fields. In some cases, we see farmers using more and more fertiliser but failing to achieve a corresponding yield. A carbon audit will map all this and deliver a mitigation plan signposting possibilities such as agri-environment schemes and soil analysis that will help improve efficiency and carbon footprint. Farmers are often surprised by the results – and sometimes relatively straightforward solutions – particularly if they carry one out year after year.

“Additionally, given the increasing focus placed on the environmental obligations of farmers, carbon audits may well prove an ever more useful and important tool moving forwards. As such, we believe there are benefits to be had in getting ahead of the curve and potentially securing a competitive advantage.”