Collaboration was identified in the Policy Commission on
the Future of Farming and Food (the Curry Report) in 2002
as critical to the improvement of efficiency and profitability
in the food and farming sectors. In the intervening years
Increment Ltd has helped establish arrangements to enable
faming businesses work together for their mutual benefit.
The most common arrangements are Contract Farming Arrangements
and Joint Ventures, both of which improve efficiency, release
working capital and time for alternative activities or retirement.
Contract Farming Arrangement (CFA): an agreement between
a farmer and a contractor (usually a neighbouring farmer)
for the supply of field operations and harvesting for a
set fee. The farmer receives a payment from the agreement
(the first slice of profit) and the remainder is divided
between the farmer and contractor. The farmer’s trading
and tax situation is as if he was farming directly and he
can adjust his degree of involvement to suit his circumstances.
This is sometimes, incorrectly, referred to as share-farming.
Joint Venture (JV): two or more parties form a new trading
entity to share resources (e.g. machinery, labour and/or
buildings) to reduce costs for mutual benefit. Return from
the business is in proportion to each party’s investment
in it.
Setting the ‘pre-nuptial’ expectations and parameters and
matching complementary businesses and personalities are crucial
to the ultimate durability of such arrangements.
Success in tapping future income streams from Axes 1 and
3 of the Rural Development Plan for England will also rely
heavily on the ability of businesses to collaborate.
Services we provide to enable collaboration:
‘Pre-nuptial’ meetings between interested parties
to discuss pros, cons and practicalities of the collaboration
Assessment of tenders with recommendation
for best fit and profitability under a range of market conditions
Preparing and circulating a prospectus inviting
tenders for contract farming arrangements
Machinery planning with a view to sharing
Creating a Contract Farming Arrangements between
generations in a farming family to introduce discipline
and incentives into the business relationship
For more information on CFAs, JVs and other forms of collaboration,
e-mail
