Here’s 13 questions you must ask before entering a farm partnership
With new CAP scheme’s inceasing the interst in registered farm partnerships the Department of Agriculture has prepared the following list of questions farmers should ask before developing a partnership.
1. What type of enterprises can enter a farm partnership
All of the main farming enterprises
2. How far apart must farms be in order to establish a farm partnership?
There is no minimum distance but all farms in the partnership must not be greater than 50 kms apart. Measurement is taken from the ‘hub’ of each farm (the details of which are held in the Department for each farm)
3. How is ‘off farm’ income calculated?
For the purpose of entry on to the Register of Farm Partnerships ‘off farm’ income is the income as set out in the category (ii) farmer’s P60 or certified farm accounts.
4. What happens if a partner leaves the partnership before the five years are up?
There is no specific penalty for leaving or ending the partnership. However different Departmental Schemes have specific rules in relation to maintaining the partnership in order to retain payments.
5. What are the benefits of being entered on the Register of Farm Partnerships
While there are many benefits to the formation of farm partnerships in terms of economies of scale, work/life balance etc.; the Department offers a number of financial benefits to help encourage and maintain the development of farm partnerships.
These benefits include the Support for Collaborative Farming grant Scheme and the preferential stock relief for registered farm partnerships.
The Department will also ensure that the members of such registered partnerships are fully catered for in the implementation of the new CAP Reform Schemes such as TAMS, GLAS, ANC, and BPS.
6. I have a small poultry enterprise alongside my dairy/beef enterprises. Do I have to bring the poultry enterprise into the Partnership
Small enterprises such as pig/poultry etc (see Section D3 of Detailed Rules) can be excluded once cleared by the Minister and agreed by the other partners.
7. Can I be a partner in more than one farm partnerships?
No. A farmer can only be a Category (i) or Category (ii) partner in one Registered Farm partnership at any one time.
8. Can a Category (i) farmer earn more than €40k per annum
Yes. The ‘off farm income’ only applies to Category (ii) farmers who have reached their 41st birthday.Also Read: What's available for young farmers in a farm partnership
9. Is there an off farm income threshold for Category (ii) farmers who are under 41 years of age
No. EU Regulations do not permit the setting of an off farm income threshold for the eligibility to the ‘Young Farmers Scheme’. The Department wants to ensure Farm Partnerships of which a young farmer is a member can be placed on the Register
10. Do I have limited liability
A farm partnership has unlimited liability. For this reason a well written partnership agreement is important.
11. Do I have to transfer ownership of my entitlements/land to the partnership
There is no transfer of ownership. When forming a farm partnership all lands and assets, such as production rights, entitlements under the Basic Payment Scheme and other Department schemes, are licenced to the partners. This licence can be built into the written partnership agreement.
12. If land is co-owned but one of the co-owners is not going to be in the partnership what should I do?
A person who co-owns land can only be a partner in a Registered Farm partnership if all the persons who co-own the lands either become partners or are exempted from this requirement by the Minister.
This exemption is required by the non participants in the Farm Partnership in order to acquire, or retain, certain tax benefits. This does not apply to commonages because the commonage land is not co-owned.
13. Is there a limit to the number of people who can be in a Registered Farm Partnership
A registered farm partnership may not consist of more than ten partners, made up of Category (i) and Category (ii) partners.