Agricultural contracting in Ireland can be a challenging business. Although we endured an unusually long spell of dry weather last summer, often the unpredictable Irish weather means that contractors have very short working windows to get through a significant amount of work. This means that Irish contractors are required to have top-quality kit to be capable of getting through this large workload.
Agricultural contracting in Ireland can be a challenging business. Although we endured an unusually long spell of dry weather last summer, often the unpredictable Irish weather means that contractors have very short working windows to get through a significant amount of work.
This means that Irish contractors are required to have top-quality kit to be capable of getting through this large workload.
Other factors such as rising machinery costs and the typically smaller farm size add to the challenges faced by Irish contractors. As a result, it’s important that contractors assess their machinery costs carefully.
Contractor charges are up by 5% for 2019, according to the Association of Farm & Forestry Contractors in Ireland (FCI) annual price guide.
The association emphasised that this is only a guide and that charges may vary considerably between regions and depending on the size of the contract. The guide is put together by collating an average figure for each operation from a panel of FCI contractor members from across Ireland.
FCI noted that contractors will be quoting a 5% increase in charges to cope with increased machinery and labour costs.
The association noted that the recent increase in machinery costs is a result of tractor mother regulations (TMR), which has added to the cost of new tractors.
The new Revenue payroll system that began in January has also had an effect, it said. Employees must now be paid on a weekly basis and tax returns must also be issued weekly, contributing to additional costs. The availability of skilled labour also continues to be an issue for rural based contractors.
FCI also highlighted that the cost of farmer credit is continuing to rise, with some contractors still having outstanding debt from 2018.
The association is encouraging all contractors to issue monthly or weekly invoices followed by monthly statements in order to help to manage cashflow. The level of long-term debt owed to contractors is estimated to be in excess of €60m.
FCI said this debt is costing the sector about €3.5m each year in interest, based on a 6% interest rate.
All guide prices listed below are based on green diesel at 70c/l. These prices are also subject to VAT at 13.5%.
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