Farmers must have five years’ experience before even considering a share farming agreement, according to Laurance Shalloo of Teagasc.
Speaking at the Collaborative Farming Options for Dairy Farming Seminar in Portlaoise yesterday (Wednesday) Shalloo also spoke of what is required in a share farming agreement.
“The arrangement is dependent on what each side brings to the table. The amount that you bring reflects your split.” This is similar to the New Zealand scenario, he said.
- A share farmer bringing labour to a 150-cow herd can expect 27-30% of the milk cheque and variable costs.
- If they bring the stock as well it can rise to a 50:50 split.
It must be noted that share farming agreements are shorter term and are not as restrictive as partnerships, he said.
Share farming is also a suitable vehicle to ensure the intergeneration change of land.
“We need to provide a career pathway for the younger generation, and share farming is suitable for bringing more land into dairy farming. It will allow young farmers to build equity.
“They must have five years’ experience before they enter a share farming arrangement, whether it be on the share farm or elsewhere.”
Shalloo also highlighted how share farming has been beneficial in New Zealand.
“Some 35% of all farms in New Zealand are operated under share farming arrangements. These farms operate at higher levels of efficiency, stocking rate and are more profitable.
“They are $250/ha more profitable then owner operated farmers.”
However, Shalloo said that there are still issues with share farming and the single milk cheque can be a major stumbling block.
“It is fine when the relationship is working, but if the relationship is not working, it may cause problems because one side has the cheque.
“If the overall package doesn’t work on day one it will not work for the remainder of the arrangement.”