Farming cooperation agreements

Few farms can afford every machine, every building and every market on their own. Neighbours share a combine, a store or a milking parlour; several holdings farm land together or sell through a common structure; a group of growers joins a cooperative to reach buyers none of them could reach alone. These arrangements often begin informally, between people who trust each other, and they work well until a machine breaks down in the busiest week, a member wants out, or the money no longer adds up.

A written agreement cannot prevent those moments, but it can decide in advance who carries what when they come. Drafting one means working through what each member brings, what each may expect and how the arrangement can end:

• the rules on the shape the arrangement takes — a plain contract, a partnership or a cooperative — and on who answers for its debts;
• the rules on sharing machinery, buildings, storage and labour, and on who pays when shared equipment breaks down or causes harm;
• the rules on pooling land, herds or production rights, and on who holds them while the arrangement lasts;
• the rules on dividing costs, income and public aid between the members, and on keeping accounts they can all check;
• the rules on how members take decisions together, and on breaking a deadlock between them;
• the rules on a member’s duties towards a cooperative or producer organisation — delivering produce, exclusivity and the price paid;
• the rules on what farmers may agree among themselves on prices, volumes and sales without breaching competition law;
• the rules on leaving — notice, settling accounts, and handing back what each member brought in.

Our lawyers can support you with this.