Share farming: the way ahead

DAIRY owners and potential share farmers now have easy access to the information they need when considering entering a share farming arrangement.
Program manager Dr Pauline Brightling said a share farming arrangement can work out well for both the dairy owner and the share farmer.
However, it also involves some risk for both parties.
Becoming a share farmer can be an opportunity for significant involvement in a dairy business for someone with the skills but limited access to the capital required to own a dairy business; or to achieve greater job satisfaction through additional responsibilities.
Farm owners may consider taking on a share farmer as a first step towards farm succession; or to reduce their involvement in the day-to-day operations of the farm.
As the name suggests, the arrangement involves sharing. It’s not just income and costs that are shared, but also labour input, risks, responsibilities, skills and control, Dr Brightling said.
Generally, each party provides different, but complementary, resources to the share farming arrangement in the form of land, machinery, equipment, livestock and labour.
A key to success is that both parties must benefit from the arrangement, Dr Brightling said.
There are many very successful, long-term share farming arrangements which suit both parties and value-add to each party’s skills and resources.
A successful share farming arrangement should be based on the following:
The potential for reasonable financial returns for each party; compatible philosophies on how to dairy farm; communication, empathy and mutual respect; an extremely clear income and cost sharing agreement that is frequently discussed; individual roles that are clear and acknowledged by both parties; a clear agreement on the issue of control; both parties agreeing to methods of communication and a written agreement.
The People in Dairy website contains information and resources to get started on developing a share farming agreement.
However, Dr Brightling recommends discussing and developing a share farming arrangement with the help of a consultant or dairy adviser. Once an agreement has been reached, then get the financial and legal aspects checked by an accountant and solicitor.
Advice on share farming arrangements can also be obtained through state farmer organisations. The United Dairyfarmers of Victoria has prepared a Dairy Share Farming Toolkit designed specifically for dairy farmers in Victoria.
For details of the new section called “The People in Dairy” visit www.thepeopleindairy.com.au or phone 9620 7283.