Share Farming. Can it work?

[cheviot1234]

We are looking to expand our current enterprise, which we are farming around 280 ewes on rented/short term grazing lets. we have been trying top find more ground but its very hard to find and when you can find it, the ground is either too far away or too expensive and we seem to be hitting a brick wall.

We had a local estate get back to us saying they have a tenancy farm coming to an end, with thew tenant going to retire they are looking for what to do next with the farm. They have told us they don't want to re let it under a tenancy as they haven't been happy with how it has been run for many years (neglect etc then the estate foots the bill) and re letting under a tenancy doesn't suit them for tax purposes and they want to be seen as active farmers but don't want to be actively involved. It hasn't been discussed yet but I think we would bring and put on all stock and machinery and labour/running of the farming business, the estate would provide the land, farm yard ,steading and a house for us to stay in. Ground is in need of some tlc, the steading is in not bad order. Fencing would need doing in places too.

How would it work with subsidies? Would the split of profit just be similar to that of a rent? How would we get some security for ourselves going forward?Is there a model of share farming/contract farming that you think would suit this situation best?

 

[betweenthelines]

Sounds like they want a tenant without creating a tenancy.

You would have no security and could be turned out (homeless) at very short notice.

I'd steer well clear.

 

[ollie989898]

We are looking to expand our current enterprise, which we are farming around 280 ewes on rented/short term grazing lets. we have been trying top find more ground but its very hard to find and when you can find it, the ground is either too far away or too expensive and we seem to be hitting a brick wall.

We had a local estate get back to us saying they have a tenancy farm coming to an end, with thew tenant going to retire they are looking for what to do next with the farm. They have told us they don't want to re let it under a tenancy as they haven't been happy with how it has been run for many years (neglect etc then the estate foots the bill) and re letting under a tenancy doesn't suit them for tax purposes and they want to be seen as active farmers but don't want to be actively involved. It hasn't been discussed yet but I think we would bring and put on all stock and machinery and labour/running of the farming business, the estate would provide the land, farm yard ,steading and a house for us to stay in. Ground is in need of some tlc, the steading is in not bad order. Fencing would need doing in places too.

How would it work with subsidies? Would the split of profit just be similar to that of a rent? How would we get some security for ourselves going forward?Is there a model of share farming/contract farming that you think would suit this situation best?

They grow the crops/grass/land/forage, you provide the sheep and labour?

Agreement will only work if they are willing and able to provide X areas of land to your to keep the sheep going. They will probably need to be planting something and growing something so that they have a heap of invoices and also sales to present to the accountant/tax man to prove they are farming.

The other arrangement is you basically take physical possession of the land, grow and do whatever you want to farm and keep sending them bills for the 'work' done and any inputs and they then counter charge you a charge for grazing rights or selling you the stranding crop/grass/whatever. Either way, the landlord needs to be seen to be actively farming the land which means they have to be shouldering risk and keep getting bills to prove they are farming it themselves, even if they don't ever set foot in the field themselves or ever drive a tractor. This is the kind of arrangement I have known some people use but it relies on a lot of trust between the two parties.

 

[Luke Cropwalker]

We are looking to expand our current enterprise, which we are farming around 280 ewes on rented/short term grazing lets. we have been trying top find more ground but its very hard to find and when you can find it, the ground is either too far away or too expensive and we seem to be hitting a brick wall.

We had a local estate get back to us saying they have a tenancy farm coming to an end, with thew tenant going to retire they are looking for what to do next with the farm. They have told us they don't want to re let it under a tenancy as they haven't been happy with how it has been run for many years (neglect etc then the estate foots the bill) and re letting under a tenancy doesn't suit them for tax purposes and they want to be seen as active farmers but don't want to be actively involved. It hasn't been discussed yet but I think we would bring and put on all stock and machinery and labour/running of the farming business, the estate would provide the land, farm yard ,steading and a house for us to stay in. Ground is in need of some tlc, the steading is in not bad order. Fencing would need doing in places too.

How would it work with subsidies? Would the split of profit just be similar to that of a rent? How would we get some security for ourselves going forward?Is there a model of share farming/contract farming that you think would suit this situation best?

Sit down with a piece of paper and write down a realistic scenario that you think could work. You have some stock, skills etc but no land. The estate has the land, buildings?, house? but no labour. The estate wishes to be seed to be involved with actively farming the land but does not wish to start employing staff. It would sound like there is a deal to be done somewhere, good luck.

 

[onesiedale]

lots of potential. However, only if you and the local estate have the same vision, goals, mindset and understand each others position.
How much ground are you talking about?
Could be a cracking opportunity to step up your business without massive CapEx.
Get some good advice and have a good agreement drawn up.

 

[Flatlander]

Sit down and talk to see what they are expecting from the arrangements and see if that fits with your needs. The estate may need to farm it on paper to qualify for inheritance tax avoidance If it’s going to be a true 50-50 partnership there is going to need A lot of trust on both sides
id think it could be a good opportunity to provide your labour and management with them paying for the likes of fencing and any fixed improvements and taking a cut from livestock sales. Just don’t become a slave for nothing to farm more acres. Keep it simple.

 

[glasshouse]

We are looking to expand our current enterprise, which we are farming around 280 ewes on rented/short term grazing lets. we have been trying top find more ground but its very hard to find and when you can find it, the ground is either too far away or too expensive and we seem to be hitting a brick wall.

We had a local estate get back to us saying they have a tenancy farm coming to an end, with thew tenant going to retire they are looking for what to do next with the farm. They have told us they don't want to re let it under a tenancy as they haven't been happy with how it has been run for many years (neglect etc then the estate foots the bill) and re letting under a tenancy doesn't suit them for tax purposes and they want to be seen as active farmers but don't want to be actively involved. It hasn't been discussed yet but I think we would bring and put on all stock and machinery and labour/running of the farming business, the estate would provide the land, farm yard ,steading and a house for us to stay in. Ground is in need of some tlc, the steading is in not bad order. Fencing would need doing in places too.

How would it work with subsidies? Would the split of profit just be similar to that of a rent? How would we get some security for ourselves going forward?Is there a model of share farming/contract farming that you think would suit this situation best?

What they mean is the estate neglected the place and the tenant refused to correct it and they then had to foot the bill themselves. Diddums.

 

[renewablejohn]

Share farming is the way of the future. Its fully approved by HMRC and gives benefits to both Landlord and Grower without the downside of a tenancy agreement. If you get on with the landlord and have the same vision then get it written down into an agreement and get on with your life. The CLA have a reputation for sorting out model agreements. In the process of sorting out a share farming agreement in respect of my horticulture site. Have had one in place for over a decade in respect of my wood processing business and it has worked well.

https://media.cla.org.uk/documents/CLA_Share_Farming_guide_2014_002.pdf

 

[ski]

All such agreements are a marriage of convenience and will ultimately fail. That said they can work well and last for a long time. The success has little to do with the wording of the agreement and everything to do with intent, morality and ethics of the parties involved. No amount of signed documents will hold someone to be honest if they are a moral sharper.

 

[Kiwi Pete]

Works well for us, but there is a lot of trust between the farm owner and myself.

I care for the land and 1500 head of his cattle, and can do what we want around that, within the overall context.
That hasn't even really been defined as such, he saw how we farmed our place and said "you have a really unique vision, would you consider this"

My vision is that I charge nothing and pay nothing, and everyone with a power of veto wants to spend time here enjoying what's on offer.

What has it work: low/no debt, open communication between trusting, generous, responsible people

What has it not work: the absence of any one, or more, of those things

I like it "loose"

 

[Formatted]

tenancy farm coming to an end, with thew tenant going to retire they are looking for what to do next with the farm. They have told us they don't want to re let it under a tenancy as they haven't been happy with how it has been run for many years (neglect etc then the estate foots the bill) and re letting under a tenancy doesn't suit them for tax purposes and they want to be seen as active farmers but don't want to be actively involved.

They can say all of this but basically what they want is the benefits of a tenancy income and not having to do any work, without the commitments of a tenancy, tenure and statutory benefits.

Go in with your eyes open, if you're relying on this to support your livelihood or pay off a loan, it won't be worth it but if you can run stores which you can sell at a moments notice then it might be worth the agro.

 

[SteveHants]

Know of several scenarios in which it is working well with various approaches - one (dairy) essentially contracts his dairy business to his landlord (retired), know some on sheep whereby the entrant is "given" sheep and then has to repay them by giving back a pre-agreed number of breeding ewe lambs per annum, plus a few more "conventional" ones.

Can be a good way to build stock/assets with limited investment. It is always best to get a proper agreement drawn up.

 

[glasshouse]

If you can sit and have a pint with your business partner you have a chance.
If its lord toffeenose s son just up from cambridge forget it.

 

[chipchap]

If you can sit and have a pint with your business partner you have a chance.
If its lord toffeenose s son just up from cambridge forget it.

I think a Share Farming Agreement needs an even better relationship between Landlord and Farmer than a tenancy.

You need to find out the landowner’s motive in not granting a new tenancy. The 1995 Act is much more flexible than the old 1986 Act.

 

[glasshouse]

I think a Share Farming Agreement needs an even better relationship between Landlord and Farmer than a tenancy.

You need to find out the landowner’s motive in not granting a new tenancy. The 1995 Act is much more flexible than the old 1986 Act.

You can’t have a better relationship when one party holds all the cards

 

[e3120]

If you can sit and have a pint with your business partner you have a chance.
If its lord toffeenose s son just up from cambridge forget it.

One comes down from Cambridge.

 

[cheviot1234]

They grow the crops/grass/land/forage, you provide the sheep and labour?

Agreement will only work if they are willing and able to provide X areas of land to your to keep the sheep going. They will probably need to be planting something and growing something so that they have a heap of invoices and also sales to present to the accountant/tax man to prove they are farming.

The other arrangement is you basically take physical possession of the land, grow and do whatever you want to farm and keep sending them bills for the 'work' done and any inputs and they then counter charge you a charge for grazing rights or selling you the stranding crop/grass/whatever. Either way, the landlord needs to be seen to be actively farming the land which means they have to be shouldering risk and keep getting bills to prove they are farming it themselves, even if they don't ever set foot in the field themselves or ever drive a tractor. This is the kind of arrangement I have known some people use but it relies on a lot of trust between the two parties.

I agree, think trust will be the biggest thing. Would it work with the estate growing grass/crops etc if they are not wanting to be too involved with the day to day running ? would I be best to take on management and send them the bill?

 

[glasshouse]

One comes down from Cambridge.

I do apologise old chap

 

[cheviot1234]

Sit down with a piece of paper and write down a realistic scenario that you think could work. You have some stock, skills etc but no land. The estate has the land, buildings?, house? but no labour. The estate wishes to be seed to be involved with actively farming the land but does not wish to start employing staff. It would sound like there is a deal to be done somewhere, good luck.

400ish acres good steading sheds etc and farmhouse. its a big step up for us just trying to figure out how to get a simple easy deal that works for both parties.

 

[cheviot1234]

Sit down and talk to see what they are expecting from the arrangements and see if that fits with your needs. The estate may need to farm it on paper to qualify for inheritance tax avoidance If it’s going to be a true 50-50 partnership there is going to need A lot of trust on both sides
id think it could be a good opportunity to provide your labour and management with them paying for the likes of fencing and any fixed improvements and taking a cut from livestock sales. Just don’t become a slave for nothing to farm more acres. Keep it simple

Yeh I agree no point being a busy fool.