General Information


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WHAT IS A MACHINERY RING?

A Machinery Ring matches a shortage of machinery and labour capacity on some farms with a surplus on other farms. For a Supplier, this form of 'Contracting' reduces the major costs of machinery ownership - interest and depreciation - on a per acre or per hour basis. Conversely the Demander does not need to own the entire range of machinery required on his farm, thereby reducing his fixed costs. Most members are Suppliers of some operations and Demanders of others, allowing them to more fully utilize the machinery they own.

Recent expansion into certain commodities has allowed members to benefit from being able to source inputs through the Ring at highly competitive prices.

Farmers, contractors, self-employed labour and companies supplying the agricultural industry are all eligible to join the Ring.

There are twelve Machinery Rings in Scotland with approximately 10,000 members between them and a combined turnover of over £20m per annum.


HOW CAN A MACHINERY RING HELP ITS MEMBERS?

  • Access to a vast pool of machinery and labour.
  • Peak seasonal demand can be met, allowing minimum machinery ownership
  • More efficient utilisation of the machinery you own.
  • New technology can be brought in without the associated massive capital expenditure.
  • The Demander has a choice of Supplier, enabling established contacts to be maintained.
  • A back-up will always be available if a major breakdown or delay occurs with the original Supplier.
  • A service list and guide price is published by most Machinery Rings on an annual basis, allowing accurate forward budgeting.
  • Certain Rings offer discounts on many commodities e.g. fuels, fertilisers, building supplies and fencing materials - we use our buying power to help our members reduce their costs.
  • Farmers machinery can be kept beyond its normal replacement time as in the event of a major breakdown a replacement can be brought in at short notice.

HOW DOES THE MACHINERY RING OPERATE?

The Ring Office is the member's point of contact for all requests. Staff are there to match requests with services available. With such a large number of members and machines, requirements are almost always met, especially when booked well in advance.

The Demander telephones the office with the service he requires; when he requires it; and if he has a preference for who undertakes the work. The office staff have all the necessary information on computer, and can therefore quickly find which members have this service available and how far they are away from the Demander. If no preference has been expressed as to who will do the work, the nearest Supplier will be tried: if he is not available or not contactable, the next nearest will be tried and so on until a Supplier can be found to do the job. Suppliers would not normally be asked to travel more than 15 miles, if they are, they would be expected to charge travelling time.


WHAT DOES IT COST?

The cost of being a member of Tayforth Machinery Ring is currently £145 + VAT per annum and up to 2% commission is charged on all invoices to cover the running costs of the Ring. Each member owns twenty five £1 shares, payable upon joining.

Our Machinery Ring covers 830 square miles - from St Andrews to Loch Lomond and from Perth to Edinburgh. However the whole of the UK is covered by Machinery Rings (fourteen in Scotland) and a system is presently being developed to link their databases together in order to give members access to resources throughout the UK. This will allow Ring Managers to use Suppliers from wherever they are located in the UK and so provide the requested service or commodity within the timescale and price required.

  • Annual Subscription : £145 + VAT (varies from Ring to Ring)
  • Share capital upon joining : £25 (varies from Ring to Ring)
  • Commission : rate varies from 0% - 2% depending on service

PAYMENT SYSTEM

Machinery Ring guide prices are not fixed, but are considered, by that Ring's Board of Directors, to be a fair rate for an average job, and as such are generally adhered to. Any alteration in the price charged for a job must be agreed between the Supplier and Demander prior to commencement of the work.

On completion of a job, the Supplier fills in a work sheet in the Work Schedule book provided. After obtaining agreement on the details from the Demander the white copy is sent to the Ring office for processing. Both parties retain the remaining copies for their information.

On receipt of the worksheet the Ring administrator invoices the job: an invoice is sent to the Demander and a self-billing invoice to the Supplier.

Payment from the Demander is collected by direct debit 21 days from the date of invoice

Payment to the Supplier is by credit transfer 32 days from the date of invoice


MACHINERY RINGS:

UNDERSTAND THE CONCEPT - AND IMPROVE YOUR BUSINESS

The idea of a machinery ring was first brought over to Scotland in the late seventies, but did not gain favour until 1987 when Scotland's first ring was set up in the Borders.

Like all good ideas, the ring concept is simple. Work required to be carried out for a demander is organised by the ring, who contacts the most appropriate and nearest supplier, and charges a modest commission to cover its overheads. The prices charged between demander and supplier are for negotiation however most rings produce an annual price guide for members information.

The general squeeze on agricultural incomes as a result of static prices, combined with the overshadowing CAP and GATT negotiations has concentrated many producers minds on the impending financial pressures which they face. The idea of rationalising you businesses cost structure may indeed prove to be its salvation and not as some would see it as an admission of failure. For maximum efficiency a farming business must be organised round the men and machines it can afford, and not around those it used to be able to afford!

The development of machinery rings, with their ability to provide farmers with labour and equipment to meet their seasonal demands has helped improve their financial wellbeing by considerably reducing the capital tied up in the business. From the suppliers standpoint, better utilisation of existing machinery over more acres or hours spreads the financial burden as well as providing a degree of extra income.

The name "Machinery Ring" is in itself somewhat restrictive. Although the core business will always be centred around the improved utilisation of farm machinery, there is no end to the possibilities open to a forward thinking machinery ring, and some examples currently on offer range from the provision of skilled labour to holiday relief and from whole farm management to baby sitting.

This opportunity for co-operation in agriculture was not missed by SAOS and through their considerable efforts, Scotland is now served by a network of 14 machinery rings. The first step to improving your financial future is only a phone call away, so make the commitment and reap the rewards.