FOR RETIRING FARMERS AND THEIR FAMILIES
What kills a share farming arrangement?
By Sam Marwood
These are the things that end a share farming arrangement.
No paperwork
This is the one. A share farming arrangement between friends lifted productivity a great deal, and it still collapsed because nothing was written down. Doing well together doesn't protect you. Productivity without paperwork is a gift you can't keep.
Books nobody can see
Share farming runs on both of you trusting the numbers, so if cost records are loose, or reporting only goes one way, a disagreement about what something cost turns into a dispute about honesty, and that ends the season and the relationship.
Transparent records aren't bureaucracy here but the load bearing wall.
A farm too small to split
If the income can't support two parties, the arrangement will fail, however well it's documented and however much both sides want it, and it kills arrangements that should never have started.
An accidental partnership
If you don't document it properly, you may be treated as having formed a partnership, with the liability and tax consequences that come with it. It's usually discovered late, by an accountant, at the worst time.
Being first in your district
Where share farming isn't common, expect to spend time educating everyone, including the bank and the agent, and expect some blind faith until there's local proof.
That's survivable, but don't underestimate it. Lean on a working example from somewhere else while you build your own.
Expecting it to change who owns the land
Share farming is a way to farm together for a term. Unless you've deliberately built a pathway into it, it doesn't change who owns the land, and at the end of the term the land is exactly where it started.
What to do about each
If you won't write it down, or the income can't support two parties, don't start.
Put a records clause in anything you do sign. It sets out what each of you gets to see, in what form, and how often. It prevents most disputes, and almost nobody includes it.
If the paper is missing or loose, you may be treated as having formed a partnership. The questions to put to a solicitor who has done farm transitions are here: What to ask your solicitor and accountant before you share farm.
Read what an agreement needs to cover: What goes in a share farming agreement.
This is general information, not legal or tax advice.
The full guide, Ageing on Farm, is free at cultivatefarms.com/resources.
You can build your own plan at cultivatefarms.com/plan.