Share Farming: A Short Guide
Share Farming is new to Irish farmers and works differently to conacre, leasing or partnership arrangements.
- 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 including the Single Farm Payments, REPS, etc.
- 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
Benefits for the land owner
- 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
Benefits for the Share Farmer
- 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)
Operating a Share Farm
- 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.
- The share farmer can buy sell all produce and then invoice/ pay landowner their share
Setting up A Share Farm agreement
- 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
Budget calculator for crops (Screenshots)