Tuesday, 19 June 2012

A livery yard on the farm?

Like many farmers, we started our Livery Yard because we had grass paddocks that were too small for growing arable crops and a building that was no use for modern agricultural needs. Maybe you’re in the same position and have decided to put in a few stables but aren’t sure where to begin. If you don’t like horses and you don’t want people in your yard, then you probably don’t need to go any further but I enjoy seeing horses in the fields and the farm yard has a good buzz when there are people in and around the stables. Having a Livery Yard is a good thing for our farm.

Although DIY liveries would have brought in more money, when we started we didn’t have enough room to store their feed and tack in individual secure units and as my knowledge of horses is limited we thought it better to find someone to rent the stables and operate as a Livery yard.  We accepted that we wouldn’t have any say in their customers (though that hasn’t been a problem for us) and left them to find and look after the liveries (some full and some part), collect the money and pay us rent for the whole yard.

Before you start, agree the responsibilities of each side ie who will empty the muck heap? Other questions might include will you retain control of turnout in the winter? Do you need a safe route through the yard for horses? Are dogs allowed?  What hours can people use the yard?(Your planning permission may restrict these anyway – initially our local council wanted to limit access to Monday to Saturday until we pointed out that horses need feeding and caring for seven days a week.) Do you mind if people wander anywhere and ride along farm tracks or should you apply restrictions? Get an Agreement drafted and signed.

We set our price by working out a commercial rent for the building plus a grazing cost and when we added facilities we knew how much return we wanted on our capital, so it was easy to calculate the rent increase. Ah, I haven’t mentioned the extra facilities have I? Well, no matter what you provide, it will never be enough. We started with five stables but our Livery Yard Operator was soon asking for more stables, then a sand school with floodlighting, more stables, a larger tack room, horse walker …

All these extra facilities need paying for and when there’s plenty of grass, hay is cheap to buy and there’s no recession, the finances are OK. But a rise in feed price, difficulty replacing liveries who leave or the Livery Yard Operator filling the stables with their own horses instead of paying liveries can lead to financial crisis. It’s easy to give the Livery Yard Operator a month’s grace to pay – after all, if they leave you’ll probably have at least a month’s void anyway – but soon it will be two month’s rent owed and then three ... Make sure your agreement has a clause regarding non payment and stick to it. When our Livery Yard Operator got into arrears as he struggled to fill the stables, we gave rent-free months and charged half the rent for nearly a year before returning to full rent when the stables filled up. Despite this, the outstanding debt remained unpaid and when he left he told people it was because we’d doubled the rent. Remember it’s a business and if it doesn’t pay, it has to end. There’ll always be another person to take on the yard.

When your Livery Yard Operator moves out, agree with them what should be left; we once discovered that all our electric fencing and the fixings from the tack room had been sold off, which was a bit of a surprise. We prefer all the liveries to leave the yard when our Agreement with Livery Yard Operator ends, though this isn’t popular with them. Our last Livery Yard Operator has just moved out; he put a skip in the yard and cleared out all the broken barrows, buckets and other things that gradually build up in hidden corners and cleaned up. When the new Operator starts next month it means they will come into a fresh yard not cluttered with someone else’s rubbish and can choose their own liveries on their own terms.

We’ve scaled back our stables a lot so that the yard will just have six stables, with a horse walker and sand school to themselves, but when the financial climate bucks up, we plan to install more stables in a purpose built yard. It's certainly been very quiet around here for the past few weeks without any horses or people in the yard and I'm looking forward to their return.

No comments: