They would share in the expenses for seeds, fertilizers, and pesticides. Farm management agreement has been helping numerous farmers for years. Sometimes, they do not have enough capital to run their farms and through it, they have found a help. They could find somebody, growers to be exact, to help them to produce profit with their property. All they have to do is to make an agreement with them and they could later share the profits that they could get with the farm. It is a good partnership or partnership agreement that many farmers has been doing for a long time. It is common in custom farming. Whether you have a blackberry farm or a pepperidge farm, your farm can be leased and produce profits without you exerting much effort.

3+ Sample Farm Management Agreement

What is a Farm Management Agreement?

A farm management agreement is an agreement between growers and the owner of the land property or the farmers in cultivating a farm. This farm may include livestock or a certain type of produce. It can also referred to as farm management contract. It is a way where farmers would let a grower take over their farm for a particular time or until the crop harvest. It is a form of farm lease agreement. It can also be known as crop share agreement because both party will share on the profits of the crops. It is commonly done in a state farm or fleet farm using holistic farming. You can have a farm management company that could help you in cultivating your farm.

Sometimes this agreement could serve as an employment contract to the growers as they would be in charge in tilling your land. Croptivity is up to them and the farmers would just wait the time of harvest. When it comes, the two parties will have to divide whatever profits that the farm could give. Ranch management or agricultural management has been tried by farmers because sometimes they have no time to do the farming or they are lacking on capital. Sometimes they simply want a helping hand or a partner that could help them with the work. Property management could be hard in some times that we would need somebody to help us through.

Options in Farm Management Agreement

When we are about to enter into a farm management agreement, we can have the following options for the things that we can do:

Share Farming

This is an agreement between two parties to share the farm’s output. No standard contract is followed in this type of agreement. All the terms are given by both parties – how they will share the farm’s output and what they will give as a contribution for the farming. This agreement becomes successful when both parties have great skills in farming or when both have complementary sources. In share farming, the parties do not share profits. They get their profits through their own output with the shared land. It has the following benefits:

Contract Farming

This is a joint venture between an owner of a land and a contractor. They use separate bank account that is used to pay the inputs and to receive the income from the farm. Commonly, the landowner provides the land and the bank account. While the contractor is in charge of the labour and the machinery. In this type of agreement, parties share the profits. After calculating all the cost, they will divide the surplus with the agreed ratio. It has the following benefits:

Tips on Farm Management Agreement

A farm is one of our greatest investment, so we have to take care of it. Apply these tips as you engage on a farm management agreement:

Consider the skills and the competencies of the grower. To be sure of the welfare of your farm, you must consider the skills that contractors have. Ask contractors of their knowledge about farming, specifically of the certain produce in your farm. If you think they have what it takes to cultivate your farm, then you can have an agreement with them. You can have a background check to know if they are good in the farming field. You may also ask them about their past agreements with other farms. Assess their skill by asking them how they are going to produce more profit in your farm and by asking their ways of doing labor. They must have the right skills that is needed to do the everyday work in your farm. Or else, if they are just new in that thing, you may not make an agreement with them. You cannot risk your farm to contractors that do not have much skill. They could destroy your farm and your crops. If that would happen, it would take some time for your farm to recover. So be sure about their skills because you are somehow letting them run your business.Have an accurate agreement on how you will share the profits. Whatever agreement you would have, be definite about how you will share the profits. You can have the separate ways of having the farm’s outputs where you could have your own profits. But in case you are about to share on a common profit, you must talk about how you can share it. You can agree on percentages or ratio to divide the profit. These percentages could depend on the cost of capital that both of you have contribute. On the the other hand, if you are the landowner, you can dictate the profit that you want. There are also times that the contractor dictates the profit. They would tell you the cost of their tilling for a particular harvest. And the rest of the profit will go to the owner. But whatever could be the way of dividing the profit, you must be clear about it in your agreement. You cannot afford to have a dispute afterwards.Get a state farm insurance. Having an insurance is always good. Get an insurance for your farm. There are times that an animal farm can catch a cow disease and all the cows could get contaminated. This sometimes happen and it would put you in a very bad situation. You would somehow lose your farm because of it. To be sure about this kind of uncertain things, you and the grower must agree to get an insurance for the farm. You can be sure that whatever mistake the both of you can do, you can have a good resort to turn to. This would be especially good to landowners because they have been entrusting their farm to someone else. They would not be sure of what can happen to their farm because they are not running their business alone. In all kinds of circumstances, an insurance would help. It could get the both of you out of bankruptcy.Have knowledge about the trade policy. To be sure that you will have profit with all the produce in your farm, you must be aware of the ins and outs of the trade policy. You can talk to your business partner about it. Having knowledge about it can make your crops to sell better. In case contractors do not know where to sell your crops, you can help them by sharing your knowledge about it. You can search for state rules that govern the place where your farm is located. Study about it and learn on ways how you can improve the selling of your crops. Know the dos and dont’s so you would know what to do in every situation. Trade policy rules will truly help the both of you.Choose the best produce in your farm. Before planning to have a farm management agreement, be sure that you know the certain crop or livestock that you want to have in your farm. Choose something where you have the skills. You may also seek for contractors first, and find out their particular skills on a certain crop. If you will know a crop that both or one of you have the skills, then you can go for it. It is the best way on how you can pick a produce in your farm. Know also what crops are good to produce. You can surf the internet to have knowledge about different crops. Study and learn on what crops would you have interest. It is also needed that you will have an interest on a certain crop or livestock before having them in your farm. It will motivate you to make your farm grow. Another thing to consider is what crops or livestock are currently good in the market. This would definitely tell if you will have buyers for your output. If you can find the perfect produce that would sell, you may choose to raise it in your farm.

How to Make a Farm Management Agreement

Maybe you have a farm and you want to lease it to a contractor. The only problem you have is you do not know how to create a farm management agreement. You can use the following steps in writing your farm management agreement:

Step 1: Find a grower or a contractor for your farm.

If you do not have enough capital to keep your farm running or you just simply do not have time to work for it everyday, you may want to find a contractor or a grower that could lease your land. Use your connection to find the right person. They might know of someone who could want to do the work for your farm daily. You can also use the internet to find the perfect person. If you will find somebody or a couple of persons that could be your prospect, have an interview with them. You should know if their skills would fit the needs of your farm. You must know if you can entrust it to them. The person you will choose should be trustworthy and someone who has the perfect skills that will help you in running your farm.

Step 2: Talk about the terms that you will have in your agreement.

After selecting the right person, negotiate with them. Talk things that are needed to be done in your farm. Decide on the contribution that both of you will have for the farm. Agree on how you can divide the cost of the production or how you can share capitals. Know also how you can divide profits. Make sure that both of you agree on common things. Take note of everything that you have talked about and turn it into a draft.

Step 3: Pick a template and write your agreement.

Choose from the many downloadable templates that are available in the internet. After finding the perfect one that you can use for your agreement, edit it. Write everything that you have agreed upon. Proofread it. You can consult a lawyer for the perfect advise for your agreement. Show the agreement to the lawyer. After everything was done, you can present it to the contractor for his signature.

FAQs

What are the Qualifications of a Farm Manager?

Farm managers usually have a bachelor’s degree. But if you have a small farm, you can choose someone who has the agricultural experience. The skills are more important than a degree. But most times, you should get a farm manager who has a degree.

Is it Essential to Have a Farm Management Agreement?

Yes. It is so essential. What happens if a dispute will arise? Or if the contractor will not pay you with the profits of your produce? Even if you are a small farmer, you must remember that you have to sign an agreement first before entering a commitment with a contractor. It will dictate all the terms that you need in your engagement. You will know how to price the farm’s output and the contractor will be committed to pay you.

For How Long Should a Farm Management Agreement Will Last?

It is completely up to you. You can make an agreement that can last for years. Or you can make a one-time agreement. It is also good if you will use an agreement that can be renewed each year or every time of the harvest. What is important is that you find the right contractor so you can prolong the agreement.

Farm management agreement is so advisable because it can make a landowner to have profit from their property without them doing anything. If you have a land investment, maybe it is time for you to resort in this kind of agreement. You can make a good use of your land and you can have a great profit. Just find the right contractor and your land will yield its increase. You will have a good source of income that can help you in your everyday lives.