Tendering for success

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News article

Tendering for success

August 2016

farm tendering

Some of the biggest obstacles to entering the agricultural industry are often the price of land and the associated investment including working capital requirements. For many young farmers who do not stand to inherit or succeed, entry to the farming world though a tenancy may be the only option. However, the process can be complex and intimidating; tendering for a holding is something that you do very infrequently and maybe just once or twice in your farming career. It is important to get it right.

With extensive experience in preparing tender applications for both Farm Business Tenancies and Contract Farming Agreements, Fisher German are well equipped to advise those entering the industry as well as farmers looking to expand, on the application process. Often the tender documents submitted will be the landlord’s first impression of you and it is important to convey your vision and enthusiasm for the property.You must show skill, experience, financial acumen and judgement as landlords are looking for a tenant who can maximise the rental return and stewardship of the holding.

County councils in recent years have played a proactive role in encouraging young farmers into the industry through giving opportunities to start up and establish their own farming business. 

This opportunity allows new entrants to then go on to expand their business and compete for larger farms in the private rented or owner occupied sector. 

Fisher German have recently prepared tender applications in respect of two Leicestershire County Council farms on behalf of a client.The two farms offered for tender on a 25 year Farm Business Tenancy comprised a mixture of arable and permanent pasture land both with a farmhouse and range of traditional and modern farm buildings.

Creating opportunities for profit

In this case, through the preparation of a comprehensive tender application Fisher German have created an opportunity for a farmer managing a herd of 30 cattle and 80 ewes on just 30 acres of land under a grazing licence to enhance his existing enterprise and expand with a reduction in budget, allowing him if successful to become more profitable as a result. Fisher German will continue to assist and advise the client in at least the first two years of his tenancy if successful in his application.

With any tender application you must present a sound business case and you will usually be required to produce a business plan setting out how you propose to manage the subject farm, a cash flow forecast for 3 years or more (to include any proposed external income such as Basic Payments and Countryside Stewardship), projected profit and loss accounts and a sensitivity analysis to show how you will react to market changes.

The standard tender document includes details of your present employment, education and experience, current stock, financial standing, your tender sum for the farm and a brief description of your plans for the holding, utilising the assets of the property, together with your reasoning for each enterprise proposed.

For further information contact Charlotte Gore on 01858 411218 email here or William Inglis on 01858 411277 email here

Click here to read more about the work of our farms team.

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