When relationships or conditions continue, what happens when a contract only covers a one-time action between the parties? A Master Services Agreement can streamline subsequent agreements and shorten the…continue reading
16+ SAMPLE Farm Agreement
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What is a Farm Agreement?
A farm agreement is a document stating the business relationship of two farmers that will share the profit from a farm. The landowner which is called the Farmer is the one who will provide the land to be tilled to another farmer which is the Contractor who is going to give labor and provide machinery. This is a form of business partnership that will happen by sharing the common profit of the farm. Landowners sometimes do not have time to till their land and they can negotiate with other farmers to do it for them. The contractors will pay the landowner a certain price for letting them use the farm and have a harvest. It is up to the two parties to negotiate about how they can divide profits and how much will be given to the landowner.
Whether you are going to enter a contract farm agreement, poultry farm agreement, dairy share farm agreement, farm lease agreement, farmland lease agreement, or farm land rental agreement, all go the same, the landowner and the contractor should both profit from the harvest that they are going to get from the land. Whether the profit will be high or low, they should agree on how to share the profits. Farmworkers are used in this kind of relationship in farm agreement because sometimes farmers need a partner that can help them in tilling their land. There are certain reasons why they engage in this kind of agreement. It is beneficial for them and even to the other party.
To invest in a crop share is not bad because you can get profits from your land with you doing nothing. You just wait for the harvest that is done by the contractor and you will have some money out from your farm. If you are a person who has other business, you can have a benefit from your land without having to work for it every day. Your income is sure because the contractors have to pay you a certain amount for the particular hectares that they will get tilled. It is a good farm cash lease. You do not have to till the crop yourself and you can have money. Like in the farm management agreement, your farm can give you returns even if you do not have the time to till it.
Benefits of a Farm Agreement
In all types of contract farming, you can get benefits. It is also true with a farm agreement. Contract farming opportunities are everywhere because landowners and contractors benefit from them. Would you like to know some of the benefits of a farm agreement? Consider and read the following:
How to Write a Farm Agreement
Do you need a share farm agreement template or farm lease agreement template? Are you going to write a farm agreement? If that is your problem, we can help you. We have some steps that you can use in writing a farm agreement. They are the following:
Step 1: Details of Parties
The first thing that you have to write in a farm agreement is the name of the landowner or the Lessor and the name of the contractor or the Lessee. Write the contact information of both parties. A farm agreement has a good element if it has written the details of the two parties carefully. Their contact information should be clear so that both parties will know how to reach each other.
Step 2: Farm Description
The next thing is you have to describe the farm that is going to be leased by the contractor. You should include the number of hectares of the farm. You should also write the type of the farm. If possible, you should include a map to provide better details for the farm. You can also write the name of the farm if it has any. Whether you have a dairy farm, poultry farm, or fruit farm, you need to give a clear description of the farm to make the agreement clear.
Step 3: Length of Term
Then you should write the length of time or the duration of the agreement. This date will dictate how long will the contractor till the farm of the landowner. They can agree to have a length of the term of months, a year, or years. If they think that they will have a good relationship, they can have the agreement for a long time. But if they do not trust each other that much yet, they can have the agreement for months as a trial engagement. The farm agreement will be valid at the said time duration. They should also write if the agreement is renewable or not.
Step 4: Rental Price
This is the amount that the contractors have to pay the landowners for the tilling that they have to do on the farm. The price is given per hectare of land. This price is dictated by the landowners and can be agreed upon by the contractors. The rental price can be paid in advance or after the harvest is done. The price is not included with the profits that the landowners can get from the harvest as their share. So, be said, this price is agreed upon by the landowners and contractors.
Step 5: Farm Maintenance
Every farm needs maintenance. The landowners and the contractors should agree on who will pay for the maintenance of the farm. Usually, the maintenance is paid by the landowners, but some landowners pass the responsibility to the contractors. If the contractors will have to pay for the maintenance, there should be a specific amount that they will pay. Otherwise, the excess amount should be paid by the landowners.
Step 6: Liability Insurance
You have to be clear if the contractors should have liability insurance. Landowners attest that they are not responsible for the contractor’s operation. If any damage will be done, there should be an indemnification that will pay for the damage. Having liability insurance will settle their dispute because the damage will be paid rightfully. Everything can be settled through it.
Step 7: Farm Requirements
There should be a restriction in the contract that will state the type of crop that can be permitted on the farm. The type of product should be clear. If landowners and contractors agree to plant mango on the farm, the only crop that can be harvested on the farm is mango only. The contractors have no right to plant other types of crops. Farm requirements should be clear and limitations should be written.
Step 8: Law Compliance
Both parties should ensure that the agreement is compliant with all the applicable laws. They should write the governing laws that they will apply in their deal in the agreement. These laws should conform with the state laws. Both parties must keep these laws to avoid being law-breakers. One of the parties can bring the case to the court of law if this happens.
Step 9: Condition of Premises
The exact condition of the farm should be written in the agreement. This is to ensure that the contractors will not do something bad that can destroy the farm. If after the harvest, the farm will be in a bad condition, the landowners can ask for payment for the damages. So, the condition of the farm should be mentioned diligently. You have to state if it is in a good condition or needs some upgrades.
Step 10: Alterations and Subletting
These are the restrictions that are given on the improvements that can be done to the property. What are the limitations for the contractors to improve the harvest? What can they do to improve farming in that particular land? How far can the landowners permit the contractors in making changes to the farm? Can a contractor be permitted to use the land with a third party? You have to be clear with these things.
Step 11: Dispute Resolution
You need to have a good relationship with the other party, whether you are landowners or contractors. To make this possible, you have to set a dispute resolution that will settle everything if a dispute may happen. You have to know how you will do arbitration. Though you and the other party may have a dispute, you have to fix everything and start anew if it is possible.
How much do contractors pay landowners?
The average price that contractors pay landowners for cropland or pastureland is $125 – $3140 per acre. It depends upon the condition of the farm and its location.
Is having a farm agreement the best way to get profit from a farm?
It may not be the best way on how you can get profit from your farm, but is a good way of how you can have income from your farm, especially if you are a busy man. If you want to have the profits of your farm alone, you can till your land and have the profits by yourself only. Both are good because a farm agreement can be proved to be beneficial.
If you are way too busy to handle your farm, your best resort is to have a farm agreement. Get contractors who can till the land for you. You can have profits with you doing nothing. Just have a great business relationship with contractors and you can continually have income from your farm. Are you needing a template for a farm agreement now? This post has 16+ SAMPLE Farm Agreement in PDF. Have any of them. You do not have to spend a cent because they are free. Download now!