Teagasc Announces a Share Farming Template Agreement for Dairying
A specimen template agreement for dairy share farming has been developed by Tom Curran, Teagasc Farm Structures Specialist. The template was developed in consultation with a steering committee representing a wide range of stakeholders and with the support of the Irish Farm Managers Association.
The purpose of the template is to help landowners and potential share farmers to form a sound legal agreement when setting up a dairy share farming operation. The template will be available on www.teagasc.ie from the 1st of April. From that point (when quotas will be abolished) it will be possible to set up these share farming arrangements.
Speaking at the launch of the template in Horse and Jockey (on Thursday last.) Minister of State at the Department of Agriculture, Food and the Marine Tom Hayes said that “There are many benefits to share farming arrangements on dairy farms, not least that they afford an opportunity for young well educated farmers, particularly those who do not have access to land, to gain valuable employment and experience. They can also provide a viable option for dairy farmers who wish to step back a bit from the day to day physical work on the farm, but want to retain a strong interest in the management of the enterprise. Share Farming is a very obvious vehicle for addressing land access issues and for encouraging young people who might otherwise be constrained by land availability to bring their energy, enthusiasm and vitality to the dairy sector."
At the launch Tom Curran, Teagasc Farm Structures Specialist said: “As for any other collaborative arrangement, a written agreement will be critical to the success of a dairy share farming arrangement. The guideline document will ensure that the essential elements are covered in any agreement.”
The template agreement ensures that the land, facilities and production rights are detailed in the arrangement. The split in farm receipts and input costs is documented as well as the ownership of animals. Procedures for dealing with conflict and dissolution are outlined as well as other relevant items. Once agreement is reached between the parties, the template can be completed and signed off by those involved.
About Dairy Share farming in Ireland
The concept of Share farming is the same for any enterprise. Share farming is already common in tillage operations across the country. Dairy share farming has not been possible in Ireland due to the restrictions of the milk quota regulations and, as mentioned, becomes possible once quotas are ended on April 1st.
Share farming is where two independent businesses operate on one holding. They are: the landowner’s business and the share farmer’s business. The landowner generally provides the land and facilities and the share farmer provides the labour. Either party can provide the necessary livestock under the arrangement.
“Dairy share farming can provide a route to entry into dairy farming for young trained individuals who wish to pursue, and are committed to, a career in dairy farming,” Tom Curran, Teagasc Farm Structures Specialist. “It can also provide an option for dairy farmers who wish to take a step back from the day to day running of the farm while remaining involved in the management side of the business.”
The priority for the share farmer is to generate surplus cash to buy dairy stock in a tax efficient manner while making use of stock relief incentives. This enables the share farmer to build up equity in the form of livestock over the period of the agreement.
“Dairy share farming is an exciting and valuable addition to the suite of collaborative arrangements available to Irish farmers. It provides a pathway for young people to enter into dairy farming which will increase the vibrancy of the industry,” Prof. Cathal O’Donoghue Head, Rural Economy and Development Programme.
“The Irish Farm Managers Association is very happy to be associated with the drafting and the launching of this new Share Farming Agreement and wishes to congratulate Teagasc and especially, Ben Roche and Tom Curran for producing this significant document,” Jim Tracey, Irish Farm Managers Association.
“It is becoming available at a very important time and we in the Irish Farm Managers Association see it as an essential tool for facilitating greater collaboration in the form of Share Farming into the future,” John Fitzgerald, Chairman, Irish Farm Managers Association.