Share farming options – from long leases to partnerships

Macra launched its Land Mobility service in 2013 to help improve land mobility in farming in Ireland. It outlines a number of options to people looking to lease their land or those looking for land.

Long Leases

Long leases are very tax efficient; with favourable income, CAT and CGT reliefs to those in farming according to Macra.

It is a simple clean mechanism that provides certainty for the land owner and active farmer.

Leasing however does not suit all land owners, some want to stay involved/active at least in the short term, for others tax is not an issue, and others have a fear associated with EU payments.

Leasing best suits established operators/operations as they are best placed to be able to take on and finance a significant lease, the outlay for enhancing the land, stocking same and rent can be too much for smaller, recently started or new entrant operators.

The enhanced measures to incentivise long leases introduced in budget 2015 are already generating additional interest in the leasing option in the farming community. It will be important that tax reliefs remain in place because over time they will continue to be effective in encouraging leasing, especially should land pass to non farming successors.

In 2014, the service facilitated 11 long leases and has a significant number of land owner clients who will be considering leasing options from mid 2015.

Family Partnerships
The service has engaged with families where a straight forward farming succession to the next generation is complicated due to economic viability, land availability, extended family, or other factors.

• Partnership is an excellent progressive arrangement within the family, keeping both younger and older generations involved.
• There are no negative tax or EU payment implications.
• Roles can be defined, a farm plan formulated, and an income split determined.
• Succession management is safe guarded and facilitated.
• Partnerships can be registered with the Department of Agriculture.

With the end of milk quotas, the availability of special supports for young trained farmers under the rural development programme, and opportunities to farm the family partnership is an excellent vehicle to enhance the family farm and facilitate land mobility, Macra says.

In 2014 the service has facilitated 10 family partnerships with another nine in progress. None of these arrangements have yet been formalised, this will be done once the Department of Agriculture register is in place.

Contract Rearing

Allows a dairy farmer to off load an element of his business and release land to enhance the grazing block and allows a rearing farm have an alternative easy to manage enterprise that provides a guaranteed return.

Contract rearing has worked well for both breeders and rearers, key to a successful arrangement is both parties going through and agreeing on a check list of parameters. The service has adopted the Teagasc template and developed a simple agreement.

The service has approximately 50 contract rearing clients and at least 18 arrangements. Interestingly the contract rearer profile spans all farmer categories; land owners stepping back, new entrants, expanding operators, and other.

Share Farming

Share Farming is where two or more people come together to farm the same piece of ground. The share farming model is very flexible and can be tailored to any circumstance. The parties remain active farmers.

Outside of pure share farming there are opportunities for other forms of collaboration which Macra categorise as farm to farm. Share farming has been very effective in tillage and while expanding operators are doing an excellent job in enhancing farms and maximising returns for land owners margin/income potential can be a constraint. In drystock and sucklers again margin/income potential is a limiting factor.

Dairying is an enterprise with good income generating capacity per hectare and provided there is a sufficient grazing block the potential does exist to deliver an income for two families.

Under quota rules share milking could not operate in Ireland but once quotas are gone there are no constraints to shared arrangements in dairying.

Share Milking

Where two or more people come together to dairy farm the same piece of ground, usually involving a principal land owner and a share milker.
• The land owner typically supplies the land and facilities
• The share milker supplies labour and management drive

The service has a significant number of potential share milker farm clients, at present there are more share milker farms than available share milkers.
The profile of the share milker farms is as follows established dairy farmers looking to stepback; dairy farmers under taking significant expansion and/or an additional unit; and, non or ex dairy farmers with equity getting into or back into milk.

Ideally, it says that the farming share milker profile is:
1. Farm managers, assistant managers, or herd persons
2. Young trained farmers with no orinsufficient land of their own
3. Farmers sons and daughters who will notbe taking over the family farm
4. Farmers who will be taking over the family farm but not for a number of years
5. Irish people working on or operating dairy farms in other countries.

Share milking offers dynamic career opportunities, good income potential and the chance to build up equity (tax free via stock relief) to the right persons, it says.

The service has to date facilitated a number of share milking arrangements which are agreed in principal. These arrangements will be formalised and finalised once the Teagasc Share Milking Agreement has been finalised.

The attributes required by a share milker are energetic; enthusiastic; high performers; with a good track record and are prepared to take an opportunity. They must be mobile and driven by a desire to farm.

The Land Mobility Service (LMS) was set up in November 2013 as a pilot programme in three pilot areas (centred around Kilkenny, Cork, and Roscommon) to determine if a specialised service would encourage collaborative farming and improve land mobility.

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