A reshape of arable farming is needed as the sector faces one of its biggest tests to profitability to date.
One of the overarching themes from the opening day of Cereals 2015’s business sessions was the need for greater recognition and support for the tenancy sector, as well as the role contract farming can play.
NFU president Meurig Raymond hit out at continued rent increases from landowners despite grain prices falling back heavily over the past year.
“Levels of rent tendered do not bear too much reflection to the values you can see,” he said.
“I do not need to tell anyone how profitability is under pressure across all sectors. It is extremely difficult to make a margin at today’s values.”
The Tenant Farmers Association spent the event lobbying for longer term tenancies to drive investment in arable markets.
The organisation’s chief executive George Dunn said price volatility and other issues had created a massive strain on farm businesses reliant upon Farm Business Tenancies.
He said: “We need a step change in the security made available to arable producers by making longer term lets more attractive to the landlord community, while at the same time discouraging shorter term agreements.”
At a press briefing from Bidwells the firm noted how the industry needed to ‘future proof’ itself as arable markets moved into a world of less subsidy dependency.
The firm’s Jonathan Armitage said: “We need to align our businesses so they are less dependent on subsidy.
“It is about maximising performance, making sure every part of your assets is delivering.”
He suggested farmers may need to admit their land may be more profitable by using contracting operations.
“The right solution may be not to farm your land at all,” he said.
This was underlined by Brown and Co which claimed contracting could be explored to offset lower returns.
Strutt and Parker’s contract farming agreement results showed return to contractors through contract farming agreements rose 4 per cent in last year, while contractors’ returns fell.
The firm’s Robert Gazeley urged those looking at deals to be sensible and realistic in agreements.