Milk Production Partnership
Type Report
Milk Production Partnership
Examine the Benefits
In addition to the quota benefits, partnerships also offer many other attractions including:
- Better quality of life
- Improved skills mix
- Security of labour
- Better management decisions
- Reduction in hired labour
Partnerships also have the potential to lead to reduced farm costs and improvements in purchasing and marketing muscle. They can also facilitate taking up off-farm employment or developing new enterprises on the partners’ farms.
Secure your future with better access to quota and an improved quality of life.
Consider Partnerships
Following a change in the milk quota regulations, up to three existing dairy farmers can now run their farming businesses in partnership (Standard Partnership) and new dairy entrants can acquire quota in their own right which can then be produced in partnership on their parents’ holding (Family Partnership).
Farm partnerships especially between unrelated farmers is a new concept in Ireland. However, experience from other countries, particularly France, demonstrates that with the right attitude and business approach farmers can achieve huge benefits particularly in terms of improved lifestyle and economies of scale by operating through partnership type arrangements.
Conditions
A number of common conditions apply to both types of partnership.
- Applicants must register their partnership under the scheme and hold a certificate of registration.
- The partners must normally use all their land in the partnership, with the exception of some specialised enterprises such as, pigs, bloodstock, mushrooms, forestry and poultry.
- A partner can only be involved in one milk production partnership.
Family Partnership
Under the New Entrant/Parent Milk Production Partnership (MPP), an eligible son or daughter can acquire milk quota in his/her own right through the Milk Restructuring Scheme, and produce it in partnership with an eligible parent.
- A son/daughter must apply for, and be offered, quota as a new entrant under the milk restructuring scheme.
- Parents are normally required to have been active qualifying dairy farmers for the previous two years.
- There must be a written partnership agreement.
- Parents must be under 63 years of age.However, it is possible to stay in partnership until the age of 66.
- Owned quota must be less than 500,000 litres.
Benefits
- A son/daughter who acquires milk quota under the scheme can produce it in partnership without having to invest in land and facilities of their own.
- The son/daughter and parent(s) are treated as separate quota owners in their own right.
- It is a first step towards involving the future inheritor at a young age before the eventual signing over of the land.
- New entrants can earn up to €24,000 and parents who are partners can earn up to €27,000 as off-farm income.
Standard Partnership
This involves a partnership between two existing dairy farmers.
- Farmers intending to establish a Standard MPP are normally required to have farmed separate dairy farms for the previous two years.
- They must have used at least 70% of their milk quotas during each of the two years before entering into partnership.
- There must be a written partnership agreement.
- They must be under 61 years of age. However, it is possible to stay in partnership until the age of 66.
- The quota size of the smaller quota holder must be at least 25% that of the larger producer’s quota.
- The farms must be within a 20km distance.
- Permission must be sought and arrangements made with the District Veterinary Office as regards a herd number.
Benefits
- Three dairy farmers can farm their holdings together.
- Each existing producer in the partnership will continue to have access to milk quota in their own right.
- Off-farm income for each partner can be up to a maximum of €27,000.
- There are special provisions for investment aid schemes.
Further Information
- Partnerships and Farming, a new publication containing specimen farm partnership agreements is available from Teagasc.
- A leaflet on Taxation Issues for Milk Production Partnerships is available from the Revenue Commissioners.
- For further information and advise on farm partnerships, contact your local Teagasc office.
Application forms
Application forms are also available from:
Dairy Partnership Registration Office,
Teagasc Advisory Building,
Moorepark, Fermoy, Co. Cork
Tel: 025 42244
Fax: 025 42384
Email: broche@moorepark.teagasc.ie