FOR RETIRING FARMERS AND THEIR FAMILIES
When does share farming work, and when doesn't it?
By Sam Marwood
Share farming works on some farms and for some owners. On others it's the wrong tool. Here's how to tell.
When it works
You want out of the machinery, not out of the farm. This is the classic cropping case. You avoid the capital cost of a machinery fleet, and the farmer brings theirs. You both share the season.
You want the season shared. A straight lease hands the tenant all the production risk, and you get a fixed return whatever the year does.
Share farming puts both of you in the same season. In a bad year you feel it too, and in a good year you share the upside. If your country is variable, that's worth a great deal.
It works as a proving ground. Several seasons with real numbers behind you is the strongest thing you can take to a bank or a backer. A modest crop, or a cattle turn that made money, proves more than any projection.
It works in reverse too. In one version you fund all the inputs, and the farmer brings only machinery and labour and takes a smaller share of the crop.
They risk their time on gear they already own, and you risk the input money. It costs you less than paying full contract rates, and it lets the farmer work at scale without buying land or taking on input risk.
When it doesn't
The farm can't support two incomes. This is the hard limit, and it's arithmetic. There has to be enough income to split. Plenty of properties can't carry a sharefarmer and an owner, so model it before you talk terms. The same test is here: How is a share farm split?.
It would be a handshake. If the answer to "will we write it down" is "we don't need to", this isn't the arrangement for you.
You want it to lead to ownership, and you haven't built the way in. A share farming agreement is a way to farm, not a path to ownership. Left alone, you can share farm for 15 years and own exactly what you started with.
If you want more, the pathway has to be designed in at the start. That usually means building livestock equity, or a way to buy in over time.
You'd want to direct the work. Share farming hands day to day control to someone running their own business on your land. If you can't resist directing the work you want an employee, and calling it share farming will cause problems with more than the relationship.
Before you decide
Model whether the place can carry a sharefarmer and an owner, then write it down. An agricultural accountant, and a solicitor who has done farm transitions, are the people to take that to.
Read more: Share farming: how it works, with an example.
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.