Share Farming: A Short Guide

Share Farming is new to Irish farmers and works differently to conacre, leasing or partnership arrangements.

The Concept

Share farming is where two parties (the landowner and share farmer) carry on separate farming businesses on the same area of land without forming a partnership or company.
Both parties share the benefits/risks of farming
There is no fixed payment for the land
Each party can sell their share of output but must pay for their input costs
Share Farming can be fully compliant with EU/ government support schemes
The Revenue commissioners are satisfied that land owners participating in a legitimate Share farming agreement continue to be classified as “farmers”
Written legal agreement is entered into to ensure that both parties are protected should difficulties arise

Compliance with all schemes and increased control over land allows increased security and rewards from farming
Increased buying and selling power due to share farmer
Ensures higher returns when yields, weight gain and/or prices increase
Agreed proportional stake in sales (animals, grain and/or straw) ensures farm returns
Maintain greater control over the land

Tailored agreement allows flexibility to suit different land owners situations
No up front payments or other flat rate payments
Growing and animal production costs are shared
Increased area/scale increases buying and selling power which help to reduce fixed costs
Stable land base allows better planning (long and short term)

Trust is essential before entering into an agreement
The agreement should be in place before farming commences
Discussion of all elements of an agreement is essential before starting
The practicalities of share farming should mirror the agreement
VAT registered farmers/growers and non VAT registered land owners can successfully operate a Share Farming agreement. See Revenue guidelines.

Calculating a budget for the crop/enterprise will form the corner stone of the agreement (See Crop Share Calculator screen shots below)
See ‘StepstoSettingUpShareFarmingAgreementV5’ flyer (PDF) for more information
Further information is also available on www.teagasc.ie