‘The role of the contractor is massively important on every farm’- McConalogue

The Association of Farm & Forestry Contractors in Ireland (FCI) staged its 2023 conference on Wednesday 6 December at the Heritage Hotel in Co Laois.

The event carried the theme ‘Farm Contracting in a Changing Irish Agriculture’ and was attended by 145 contractors from across the country.

Minister for Agriculture Charlie McConalogue opened the event and recognised the huge role that contractors play on every farm across the country.

He said the role of the contractor was a very important one, that it needs to be valued and supported, and that he believes the role will be even more important in the years ahead.

“I very much recognise the importance of a viable and professional contracting service for farmers, which is fundamental in any delivery of the environmental and economic goals now inherent to the Irish agriculture sector.

"I think it’s fair to say that the agriculture sector has been transformed over the years. It’s also clear that the contracting fraternity have played a huge role in this transformation,” McConagloue said.

The minister, when questioned about TAMS grant aid on machinery for contractors, noted that it is an issue often raised to him around the country. It is often a bone of contention, he said, but explained:

“The reasons as to why contractors cannot be included is due to the regulation within the CAP (Common Agricultural Policy), which requires TAMS to be directed towards either farmers or groups of farmers. So, while contractors who are also farmers can avail of TAMS, contractors who aren’t farmers cannot.

"The State aid conditionality is tied to the CAP, which means it is not a technical possibility for our Government to fund this.”

He added that where a contractor is a farmer, there is no restriction using machinery that was TAMS grant aided in the contracting business.

Attendees were treated to 12 guest speakers, with the panel covering areas such as changes coming down the line in Irish agriculture, how contractors in the Netherlands are dealing with change, anaerobic digestion opportunities for contractors, apps to streamline paperwork and invoicing, finance, insurance and the option of using HVO fuels.

Hero Dijkema, who is the policy officer for agricultural traffic and transport with Cumela, gave an overview of contracting in the Netherlands.

Cumela is the association of Dutch agricultural and rural contractors and has 2,000 members. Established in 1936, its average contractor member employes 10 staff.

Currently, he explained that one of the biggest challenges for Dutch contractors is the vast uncertainty around the agricultural sector, in particular the huge proposed cull of livestock numbers.

He said contractors are struggling to pass on the high costs, such as finance, fuel, parts and, most importantly, the price of machinery.

On the latter, Hero said that there are not enough working hours available to make large machinery investments profitable. He sees that small- and medium-sized contractors are finding it more and more difficult to remain profitable.

He said contractors are struggling to find skilled staff and that GPS-thefts are rampant. In 2022, there were 197 GPS systems stolen from Dutch contractors, which came to a total monetary value of €1.18m.

Farmer population

Another big uncertainty is the increasing decline in the number of farmers.

In 2013, there were 67,500 farmers in the Netherlands. This decreased to 54,000 in 2018 and is currently at 51,000, with a further acceleration in the decreasing number of farmers anticipated, based on expected incoming government regulation.

New nitrogen policy

Dutch farmers are waiting on a new nitrogen excretion policy from the government. With no idea how severe this is going to be, Hero said that contractors have postponed machine investments, and noted that, for the first time ever, he is seeing a lot of contractors getting out of the business.

He estimates that in the region of 20 Dutch contractors have gone out of the business this year alone.

In his closing statements, Hero noted that communication with customers needs to be improved, and that contractors shouldn’t make investments at the request of a single customer.

He said that competition between contractors is nice, but cooperation is key for contractors staying in business for the long term.

Breda O’Donnell from FBD insurance gave an overview of where the firm stands on stolen technology and, in particular, Global Positioning System (GPS) units.

On many occasions, we at the Irish Farmers Journal have reported the on-going thefts of such technology.

FBD has said that John Deere Starfire 6000 rooftop receivers and GreenStar displays are the most common units being stolen.

The insurance company said that the pattern of thefts suggests that organised gangs are, at times, selectively stealing mobile equipment to order.

FBD said agri-contractors and farmers have the option to cover a range of items in their possession against theft – mobile GPS equipment, transponders and screens can all be insured as individual items.

Risk cover

FBD advised that all risk cover is freely available for GPS and these items can be specifically named.

The cost of insurance, as with any type of insurance, depends on the value, type and cover sought for the item concerned.

Where GPS are in-built into modern tractors as standard (as opposed to interchangeable mobile equipment), the value declared for the tractor should incorporate the value of the GPS.

She said farmers should check the cover active on their tractor(s) to ensure appropriate protection is in place in the event of theft or damage.

Check insurance

Breda finished by saying that all farmers and contractors with such technology should contact their insurer and make sure that the GPS for their vehicles are properly insured.

HVO fuels

Laura Byrne from Certa Fuels gave an overview on hydrotreated vegetable oil (HVO) as a fuel for the agricultural industry.

She said that it is manufactured from 100% renewable plant waste matter, and that HVO is a paraffinic drop-in fuel, designed as a direct replacement for diesel in existing commercial diesel engines.

She added that it has a wide range of OEM approvals, meaning it can be used without needing any engine modifications. We would advise contacting your local dealer or manufacturer for total clarification on this.

Claiming to reduce carbon emissions by as much as 90%, Laura said it has a shelf-life of 10 years – significantly more than the 15-month warranty most diesel suppliers offer. Although AdBlue is still required, she claims less AdBlue is used when running on HVO.

Barriers

Leaving aside its advantages, she outlined that it faces many barriers. Firstly, for the road transport industry, HVO is currently not falling under the diesel rebate scheme, so it’s not attractive for hauliers.

Despite its environmental benefits, the fuel is currently still liable to the same carbon tax as green diesel. However, she noted that lobby groups are in discussions to get this removed, as it’s a carbon-neutral product.

The other current barrier is the price point – it is coming in at about 20% above green diesel.

When questioned on supply potential for the Irish market, she said it could go to 10-15%, or possibly more.

She mentioned that manufacturers are currently trying to widen the feedstock net, but it’s a long wait going through the auditing process.

Joe Patton from Teagasc Dairy Knowledge Transfer attempted to paint a picture of what the future Irish farming landscape may look like.

This included trends and projections in livestock numbers, implications of changes to nitrates regulations, and the requirements of future livestock systems.

Dairy cow numbers

Up to 2030, he expects dairy cow numbers to steadily climb to 1.7 million cows, while suckler cow numbers will fall to 700,000 cows. There will also be an increase in dairy and calf-to-beef systems.

Despite the quickly approaching changes to derogation rules, Joe said that Teagasc survey data indicates that most dairy farmers intend to retain or grow their herd size, with taking on extra land being the preferred option.

With this, he sees a further fragmentation of holdings, which will inevitably mean more external silage blocks, so longer draws for contractors for both silage and slurry.

If the verification of slurry movement comes into play, as in other countries, he noted that slurry export will not be a viable solution in all cases.

Silage quality

He showed data that indicated silage quality hasn’t moved much since the 1970s, and that he can see more multi-cut systems with earlier first cut and early autumn third cuts coming into play.