The use of share farmers and contractors to plant, spray, nurture and harvest crops on an informal handshake is common.
Unfortunately, these types of arrangements do have a habit of breaking down if one or both of the parties involved fail to fulfil their ‘understood’ obligations.
It is better to have such arrangements in writing, so that if something does go wrong, the terms are in black and white rather than relying on someone’s recollection of what was verbally agreed to.
Important factors to cover in any share farming and contracting agreement include:
- the minimum area to be share farmed;
- the term;
- the contracted activities to be performed and when in the case of a contracting agreement;
- the rate to be paid and things that can vary the rate in the case of a contracting agreement;
- the landholder’s rights and obligations including costs;
- the share farmer / contractor's rights and obligations including costs;
- how the crop will be marketed in the case of a share farming agreement;
- how the sales proceeds will be split in the case of a share farming agreement;
- the consequences if either party does not meet their obligations;
- how disputes will be resolved;
- how the agreement can be terminated;
- the liability of the parties; and
- how the agreement can be varied.
Because every farm and the parties involved are different in every case, any documents should be specifically tailored to suit each situation.
Please contact JMA Legal for advice or assistance with these types of contracts.
This article is general information only and should not be relied on without obtaining further specific information.