Teagasc launch a Template Contract Forage cropping agreement
Growing crops on contract presents a win-win opportunity for both livestock farmers and tillage farmers in 2018. The new Contract Forage Template, developed by Teagasc, provides 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.
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 fertilize 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. Planting of cereals is well behind due to the inclement weather. Contract cropping presents an alternative for tillage farmers for 2018. While it is getting late for sowing beet at this stage, the timing is right for sowing of maize for silage. Tillage farmers can consider growing maize on contract instead of sowing late cereal crops.
The template contract cropping agreement provides a structure, for a tillage farmer and a livestock farmer to negotiate a bespoke agreement. In this agreement, the farmers set a price and the payments are made in three instalments. “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,” said Thomas Curran, Teagasc Farm Business Structures Specialist.
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. It is vital that both farmers honour their commitment to the agreement in order for it to be successful and sustainable into the future. The template is free to download at https://www.teagasc.ie/rural-economy/farm-management/collaborative-farming/contract-forage-cropping/