Teagasc / Ifa Skillnet Conference On Milk Production Partnerships
25 January 2005
A MILK PARTNERSHIP AGREEMENT IS A BUSINESS ARRANGEMENT
At a Milk Production Partnership conference hosted by Teagasc and IFA Skillnet in Cahir to-day Teagasc Dairy Partnership Registrar Ben Roche told farmers that a Milk Partnership Agreement is a business arrangement and should be treated as such by the partners. Following the change in milk quots regulations up to three existing dairy farmers can now run their farming businesses in partnership (Standard Partnerships) and new entrants who have acquired quota in their own right can produce milk in partnership on their parents’ holding (Family Partnerships). Mr. Roche was outlining the guidelines for making partnerships work.
Mr. Roche said that clarity between partners with regard to what each should expect from their partnership arrangement is of fundamental importance. Entering into a partnership arrangement that is lacking in clarity is like undertaking a journey without a roadmap. Lack of clarity will sooner or later lead to misunderstandings and false expectations. This in turn can lead to disputes.
Continuing the Teagasc Specialist said the partners in a partnership must be able to work and get along together. This calls for willingness to give-and-take and the ability to talk over differences and to come to mutual decisions. These traits should exist when the partnership is established.
Good Communication - Vital
A good communication between partners is essential. Depending upon the type of partnership this may call for regular meetings. Meetings could be a useful forum to plan for the week and month ahead. It provides a forum for partners to inform their co-partners on work progress and provides opportunity to make joint decisions. The annual review meeting is very important in this context, Mr. Roche told the Conference.
Speaking on family partnership Mr. Roche warned that New Entrant/Parent MPPs are also business arrangements. Therefore it is important that financial affairs be handled in a business like manner. A common cause of trouble and misunderstanding in partnerships is the lack of clear-cut,
business like procedures. A good rule of thumb is to handle financial matters of the partnership as though the partners were unrelated.
Partnership Agreement – a legal document
A partnership agreement should not simply be viewed as a form to be filled up with a Solicitor. It is a legal document setting out how the partners agree to set-up, operate and eventually dissolve their partnership business.
A suitable partnership agreement should go a long way towards avoiding misunderstandings. The agreement must accommodate the views, needs, and expectations of each partner; the agreement should be clear and transparent, it should not leave room for different interpretations. The agreement needs to make provision for matters, which are likely to arise during the operation and dissolution of the partnership. However an agreement should be a document that represents how the partners want to manage and operate their partnership. Clearly this means that it’s of fundamental importance that the partners are involved in deciding what goes into theagreement,Mr. Roche said.
In conclusion Mr. Roche urged all interested dairy farmers and dairy farm families to contact their local Teagasc dairy adviser for more information on Milk Production Partnerships.
Further details from: Ben Roche, Teagasc Dairy Partnership Register
Tel. 025 42244; Email: broche@moorepark.teagasc.ie
Issued by: Larry O’Loughlin, Public Relations Department, Teagasc
Tel: 059-9170200; Email: loloughlin@hq.teagasc.ie
