SHARE FARMING

Management and financial agreements.

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Why share farming is useful?

    The purpose of share farming is allocate risk in a different way.

It is not simply that the risk of crop failure is being moved from the owner to the share farmer.

The risk is being handled in a different manner that can be a win - win formula for both the owner and the farmer.

There is considerable prejudice against share farming as it was considered exploitative.

Large land owners exploited small farmers.

If share farming is carried out between almost equals there is no need for agreements to favour one side or the other.

Some options for a small farmer without machinery

Resource

Machinery rented from coop

Contractor

Share farming  -  1/2:1/2

Share farming  1/3:2/3

Land

Provided by owner

Provided by owner

Provided by owner

Provided by owner

Machinery

Rented from coop. Paid for on a per ha. or per day basis.

Provided by contractor

Provided by share farmer

Provided by share farmer

Labour

Provided by owner

Provided by contractor. Paid by owner through contracting fee.

Provided by share farmer. Paid from share.

Provided by share farmer. Paid from share.

Fertiliser, seed and herbicide.

Provided by owner

Provided by owner

Provided by owner

Provided by share farmer.

Management

Provided by owner.

Provided by owner but dependent on availability of contractor.

Provided by share farmer.

Provided by share farmer.

Output from crop

100 % to owner

100 % to owner.

50% to owner.
50% to share farmer.
Grazing to owner.

1/3 to owner.
2/3 to share farmer.
Grazing to owner.

Risk

All carried by owner. Labour is provided by the family. Not a cash cost. 

All carried by owner. All costs including labour are paid in cash. This is the option with the greatest risk for the owner. 

Shared. Owner risks cash costs of inputs. Share farmer risks machinery costs and own labour.

All carried by share farmer. All inputs paid for by share farmer. Also risks own labour.


 Sharing farming options

Resource

Share farming 1/2 and 1/2

Share farming 1/3 and 2/3

Land

Provided by owner

Provided by owner

Machinery 

Provided by share farmer

Provided by share farmer

Labour

Provided by share farmer. If the share farmer is a neighbour and family labour is used this is a farm overhead. Cash payments are not made. The risk is less.

Provided by share farmer. If the share farmer is a neighbour and family labour is used this is a farm overhead. Cash payments are not made. The risk is less.

Fertiliser, seed and herbicide.

Provided by owner. This is the owner's share of the risk. If crop fails, seed and herbicide is completely lost. Some value in phosphate residues.

Provided by share farmer. If crop fails share farmer takes complete risk. Residual value of fertiliser no use unless share farming agreement for some years.

Management

Provided by share farmer

Provided by share farmer

Output from crop

Grain is shared 1/2 and 1/2
Grazing is usually 100% to owner. Straw and chaff usually to owner.

Grain is shared 1/3 to owner and 2/3 to share farmer.
Grazing is usually 100% to owner. Straw and chaff usually to owner.

Risk

Owner risks cash inputs of seed and fertiliser etc.

Share farmer risks machinery costs and family labour.

Share farmer risks everything. 2/3 may not be enough and range 66% to 75% to share farmer negotiated. 
Owner receives 1/3 share of crop with no risk.

Management checklist

    This is a checklist for discussion between the owner and the share farmer.

It is not a binding agreement.

If the owner and share farmer can agree in general terms on the management of the land and crop before the share farming operation takes place then disputes are less likely.
 

SEASON

MANAGEMENT   OPERATION

Spring before.

Owner begins a program of weed control. Adequate grazing of medic pasture or cutting vetch and oats for hay and then grazing.
Alternatively the share farmer fallows the land in Zaghouan 4 rotation.

Summer

Owner grazes the land to remove bulk of dry medic or other material.

Autumn.

Owner hands formal management to share farmer unless the share farmer has already started by fallowing the land. Should be reasonably free of trash.

Autumn.

Share farmer begins cultivation program. Normally two passages over the ground with scarifier and harrow.

Autumn.

When seed bed preparation complete share farmer plants crop. Seed and fertiliser supplied by owner or share farmer. The seeding rate for cereals needs to be agreed also that for the fertiliser and type.

Autumn.

Rains fails. How can cultivation and seeding program be abandoned?

Winter. 

Application of herbicide for the control of broad leafed weeds. Type etc..

Summer.

Grain is harvested. Method needs to be agreed. Will chaff cart be used? Where is owner's share delivered? Left in field or delivered to house or to point of sale?

Summer

Crop too poor to harvest. Needs to be valued and sold to owner or other flockowner so share farmer receives some return.

Summer

Straw, chaff and fallen grain is property of owner for grazing but possibly 1/2:1/2 split on straw if share farmer bales it.

 

Draft agreement

    A formal agreement is useful as it can help to reduce disputes.

The most important aspect of the share farming agreement is mutual trust but some written agreement can strengthen this.

     SHARE  FARMING  AGREEMENT

Parties to the agreement

OWNER OF LAND:

SHARE FARMER:

Name:

Name:

Address:

Address:

Telephone:

Telephone:

If part owner of land state other owners:

OTHER OWNERS

ADDRESS

I, the under signed, am the part owner of the land subject to this share farming agreement.

I have discussed the agreement with the other owners and have received their authority to sign this agreement on their behalf.
 

Signed .....................................................................
 

Land subject to this agreement

LAND subject to this agreement:

Area. Ha.

                                                 

Name or location of field(s)

Title No. 

Other description.


 

Length of agreement.
 

This agreement begins on ................................ (before cultivation)  and ends on ............................... (after grain has been harvested).

During this period the land will be managed by the SHARE FARMER.

The SHARE FARMER will carry out an agreed management program as far as possible. (See below)

Alternatively the agreement may be for a number of years subject to a formal letter to terminate from either party six months before the beginning of a crop season.

Transfer of the agreement

This agreement cannot be transferred to another SHARE FARMER without the agreement of the OWNER.

Disputes

Any disputes between the OWNER and the SHARE FARMER will be resolved by arbitration.

The OWNER and SHARE FARMER agree that:

Name:

Address:
 

Telephone:

I agree to act as arbitrator for the OWNER and SHARE FARMER in this agreement.

Signed....................................................

will be the arbitrator of any disputes arising under this agreement. The arbitrator's decision is final and further legal action will not be taken.

The owner's responsibilities.

1. The OWNER will manage the land before the agreement comes into operation in a manner that will reduce the carry over of weed seeds as much as possible.

The OWNER will graze the land to remove dry material so the land can be easily cultivated.

2. The OWNER (under the 1/2:1/2 agreement) will supply the SHARE FARMER with:
 
 

CEREAL SEED

FERTILISER

Type (wheat, barley etc.)

Type (Triple phosphate etc.)

Amount.

Amount.

Fungicide treatment.

at ...........................................  (farm house, field or other location)  by ...............................  (a reasonable time before expected sowing date)

If herbicides are to be used:

HERBICIDE

Type (MCPA, 2 4 D etc.)

Amount.

Water available at:

at ......................................... (farm house, field or other location)  by ....................................... ( a reasonable time before application date)

ALTERNATIVELY  the OWNER  and SHARE FARMER  can agree on a price for these inputs and the OWNER can pay the SHARE FARMER in cash for these inputs.

If the crop is insured payment is made by the OWNER under the 1/2 : 1/2 agreement.

3. The OWNER will supply sacks or other containers for his 1/2 share of the grain unless other arrangements are made.

The owner's rights.

1, The OWNER will receive ONE HALF SHARE  /   ONE THIRD SHARE (strike out that not applicable) of the grain produced from the land under the agreement. The grain will be equal as far as possible to the half share of the SHARE FARMER. The SHARE FARMER will deliver the half share to the owner in the field unless agreed otherwise.

    The SHARE FARMER agrees to deliver the grain to ................................   and will be paid ......................   per qx. for transport.

2. The OWNER has the right to graze sheep on the land during any period of fallow and after the cereal harvest has been completed except as stated under 4 below.

3. The OWNER with the agreement of the SHARE FARMER or by arbitration can refuse to supply the inputs stated under the agreement on the grounds that rain fall is insufficient and the risk of crop failure is too high.

4. The OWNER is entitled to a HALF SHARE / ONE THIRD SHARE of a cereal crop considered too poor to harvest. The failed crop will be valued and the SHARE FARMER paid for HALF or TWO THIRDS SHARE.

5. The OWNER has the right to inspect the SHARE FARMER'S operations at any time and inspect the application of fertiliser, seed and herbicides.

The share farmer's responsibilities

1. The SHARE FARMER will provide a suitable range of farm machinery as stated below.
 
 

FARM MACHINERY

INCLUDED IN THIS AGREEMENT

NOT INCLUDED AND PROVIDED BY CONTRACTOR. If so state means of payment.

Scarifier.

Harrows.

Combine seeder.

Sprayer for herbicide.

Harvester.

Rake and baler for straw.

Transport for grain, etc.

2. The SHARE FARMER will carry out the agreed program of cultivation, seeding and harvesting in a reasonable time.

If the SHARE FARMER is unable to carry out the tasks due to breakdown of his machinery and is required to employ a contractor this is his expense.

3. Under the 1/3 : 2/3 agreement the SHARE FARMER will supply:
 

CEREAL SEED

FERTILISER

Type (wheat, barley etc.)

Type (Triple phosphate etc.)

Amount.

Amount.

Fungicide treatment.

and
 

HERBICIDE

Type (MCPA, 2 4 D etc.)

Amount.

Water available from the owner at:

If the crop is insured payment is made by the SHARE FARMER under the 1/3 : 2/3 agreement.

4. The SHARE FARMER must take reasonable care not to damage any of the OWNER'S property during farming operations but is not responsible for any soil erosion due to farming operations.

The share farmer's rights.

1. The SHARE FARMER will receive ONE HALF SHARE /  TWO THIRD SHARES (strike out that not applicable) of the grain produced under this agreement.

The share will be equal as far as possible to the OWNER'S share.

2. The SHARE FARMER with the agreement of the OWNER or by arbitration can refuse to sow the crop because the rainfall conditions are poor and the risk of crop failure is high.

This clause cannot be used to withdraw from the agreement because of machinery breakdown.

3. The SHARE FARMER is entitled to ONE HALF / TWO THIRDS SHARE of the value of a failed cereal crop if it is considered too poor to harvest.

Additional clauses.

The cereal STRAW, CHAFF and fallen GRAIN is the property of the OWNER after the harvest has been completed and the grain removed from the field.

By agreement the straw may be baled and the straw divided 1/2 to the OWNER and 1/2 to the SHARE FARMER.
 

If a STRIPPER is used to harvest the crop the OWNER and SHARE FARMER need to agree on a location for the dumping of the cereal grain and chaff (reasonably close to the field) and the means of winnowing the grain.
 

We the undersigned agree to the conditions of this SHARE FARMING AGREEMENT outlined above.
 

Signed  .....................................................  OWNER       

Signed ....................................................... SHARE FARMER                                          

Date      ........................................................

At  ..................................................................................................................

Witness .....................................................                                  

Witness .........................................................