Contractor charges must be based on a realistic examination of the cost of the operating tractors and a full host of machinery, according to the Association of Farm & Forestry Contractors in Ireland (FCI).
It made the statement following the publication of its contractor charges guide for 2020, as reported by us here.
The FCI said it always advocates that all contractors should examine their costs of operation in working out their individual charges.
Michael Moroney, FCI chief executive officer, said: “FCI always advocates working out individual charges between the contractor and their farmer clients, based on the cost of the operation will invariably change between farm and farming system.”
“A basic cost analysis will show that a 120hp modern tractor will require a minimum rate of €50/ hour in order to cover the operating and labour costs, irrespective of the work done.”
“The minimum rate for any tractor leaving a contractor’s yard should be €50/hour to cover depreciation (27%), labour costs (48%), fuel costs (13%), repairs and maintenance (8%) and insurance costs (4%).”
Annual turnover of more than €700m per year
The annual turnover in the farm contractor sector now worth more than €700 million per year. “Through the use of new and more efficient machinery systems including precision farming systems, the dedicated land-based FCI contractor provides the best and most cost-effective choice for Irish farming businesses with new opportunities for traceability.” Moroney concluded.