The individual financial positions of both parties are important when considering the conclusion of a share-use contract. However, the level of debt and the annual debt service of both parties are not relevant to the formulation of a fair share plan. Fonterra field agent Robyn Mitchard has been involved in several shared operating agreements. She said an effective agreement should be affordable, fair and capable of legal oversight. It is important that an agreement defines clear responsibilities. Fair sharing agreements can provide great opportunities for those who strengthen or disengage in the dairy sector. Next steps: Learn more about the law and the control test. Download our Share Farming – Unfair and Fictitious Contracts Handout Next Steps: Our Code of Conduct model contains a shared milk farming contract that you can adapt to your situation. When negotiating the terms of an agreement, it is important to examine and determine how benefits are shared when it is time to distribute profits (or losses). While the party that injected funds into the business should recover these funds, it is also important to think about the monetary value of landowners. As each agreement is unique, your operating agreement must be adapted to reflect your specific agreement with the other party. The contract depends on how you distribute the share of the farm, which is responsible for what and the minimum standards for agriculture you need from the independent contractor. Traditionally, there is a path between equity and agricultural property.

A well-planned equity savings plan can offer significant potential for asset growth by shareholders. Some buyers of dairy land may require the provision of a high level of management know-how that can be provided by an equity farmer. The resources here introduce you to the concept of Share Farming, offer downloadable shared operating agreements and tips for fair and equitable agreements. Farmers can consider taking over a farmer`s share and investment as a first step towards inheritance or reducing their participation in the day-to-day operation of the farm. Business leaders can see the economics of equities as the next step in their careers. These rules may work well for both the milk owner and the farmer on its own, but there is also some risk to both parties. Parties considering a common agriculture agreement for the first time should be aware that it carries risks. For a farmer, the risk is usually in the area of management. Will the farmer on his side have the management capacity that is expected to fulfill his or her share of the agreement? For a newly recruited farmer, the risk depends on the seasons, input and production prices and his ability to provide the skills needed to achieve the stated objectives. The success of equity farming can harness the potential of different resources, leading to a profitable dairy activity for each party. But it is not only the joint availability of the right assets that leads to success.

It is important that agricultural participants recognize and respect the skills and assets that the „people“ have brought to participate in action agreements. This could be a great way to increase your farming activities, but it`s important to make sure you`re doing it right. „It is also important that each party knows what it brings to the agreement, whether it is machines or cows. It is essential to outline and understand the responsibility of the other. If something goes wrong in the yard, for example a piece. B machine, it is important to be clear about how it is repaired. For example, can the shareholder call or should the problem be mentioned to the owner? download a copy of the www.thepeopleindairy.org.au/engagement-reward/share-farming.htm code tour.