Our first two “Share Milcher” stayed nine years, agreed to build the farm, and then developed the farm in their own way. If a young couple has good ideas for increasing income, either for themselves or for the farm-sized business as a whole, we are not in their way. Unlike contract farming, equity agreements do not provide guaranteed payments, regardless of commercial performance. This means that both sides can prosper in times of prosperity and share losses in the poorest times. It is no secret that the increasing complexity of farm regulation in Scotland is prompting many landowners and farmers to consider alternative farming structures. The application of contract agriculture is already well established, but there is certainly a place for growth and, more recently, it has been recognised throughout the sector that common agriculture could be a way forward for Scottish agriculture. Properly constituted share operations contracts are not leases. For landowners who want to turn away from the inflexibility of agricultural leases and the consideration of structures that allow for the maintenance of control and growth of farms, it has never taken longer to consider contracts and common agriculture. These structures can also be a step forward for new entrants wishing to join the sector. Participation, also known as profit sharing, allows a farmer to operate a farm business without providing the initial capital needed to own arable land. Most of the time, a landowner (with land and fixed equipment) enters into a joint farmer`s contract with another farmer (with work and machinery). The model is the most popular in the dairy sector and includes different risk and benefit allocations between the farmer and the landowner.
Farmers can be held liable in the event of an independent contractual agreement. If a contractor does not meet the common law “control,” all workers who are put on their property to cooperate with the “contractor” could be considered workers of the operator. If these workers are illegal workers, the farmer could expect a criminal complaint for your job. Of course, profit is a motivation and an incentive for equity producers to deliver results. However, the owner of the farm usually focuses on wealth and profits. This divergence of direction should be discussed regularly between the parties and certainly during the extension of the agreement in order to reach an acceptable compromise. One of the good reasons why a farmer could enter into an equity conservation agreement is the fact that I have developed my calf-raising business by raising an additional 500 calves per year. We pay the owners of the NZD 50/calf farm to cover our use of the facilities and we have also leased 180 hectares of land that we use to raise alternative crops, grow crops and fatten some of the calves we raise, most of which are sold for 100 kg.