We have noticed a growing number of share farming arrangements within South Australia, springing up like new crops after the breaking rains.
There is no doubt that with interest rates being at an all-time low and the state and federal governments offering incentives and concessions to small businesses, it makes sense that there is activity on the horizon and most likely a lot more still to come.
However, some warnings have been issued on ABC radio, in a piece by rural reporter Clint Jasper, Agribusiness lawyer warns share farming without contracts can leave door open to dispute.
As conveyancers with a sister firm specialising in commercial law, Eckermann Commercial Lawyers, my ears naturally pricked up because there are some common sense things to do to avoid the traps of going into share farming underprepared.
We’ll all be rooned, said Hanrahan
In a sector going through change at the rate that agriculture is, it pays to be wary when doomsday voices claim new developments are bad or dangerous, however, the ABC report did highlight an important insight.
The article included the warning that farmers and investors entering share farming agreements ‘without a solid contract’ left all parties open to ‘huge financial risks’.
While we have noticed that more parties are becoming aware of the risks of poor contracts, there is something about the mix of farming families with non-farming investors that provides opportunities for huge gaps in risk awareness.
Have your cow and milk it too: How to make share farming yield best results
There is no doubt the environment is attracting more “non-farming” investors to seek out rural investments without being tied down to the foreign demands of to running an agricultural enterprise.
As the biggest conveyancing firm in South Australia and offices in the Fleurieu and South East regions of the state, we can bring the right people together to make sure the ground is prepared for a fruitful share farming agreement.
The Eckermann Steinert Conveyancing team can handle the conveyancing when purchasing the land and Eckermann Commercial Lawyers can assist with setting up a share-farming agreement or a lease if the purchaser doesn’t wish to run a farming enterprise themselves on the land.
Then the only concerns going forward will be those of Hanrahan:
“If we don’t get three inches, man,
Or four to break this drought,
We’ll all be rooned,” said Hanrahan,
“Before the year is out.” – John O’Brien