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Irish Examiner - Farming - - DAIRY SECTOR -

J o h n S e x t o n i s t h e s h a re farmer in the 100-cow share­farm­ing ar­range­ment set up by Te a g a s c a n d S h i n a g h Es­tates in Ban­don, Co Cork. Af­ter years of be­ing an em­ployee on dairy farms, John now owns his own cows. He is 18 months into the share- farm­ing ar­range­ment on the 34-hectare farm at Gur­teen, near Ban­don, which is owned by Shi­nagh Es­tates Ltd, which is in turn a com­pany owned by the four West Cork dairy co-ops.

In 2015, Shi­nagh Es­tates in­vested € 250,000 to con­vert what was then an out- farm into a 100-cow dairy unit. John ex­plains the project in an ar­ti­cle in the cur­rent edi­tion of To­day’s Farm, the bi-monthly mag­a­zine pro­duced by Tea­gasc and the Agri­cul­tural Trust.

“The aim was to demon­strate how a share- farm­ing model could pro­vide a good in­come for the farm’s own­ers but also en­able a per­son with some cap­i­tal to start a dairy farm­ing busi­ness,” says John, in the ar­ti­cle compiled by Paidi Kelly of Tea­gasc Moo- repark, and John Mc­Na­mara, Tea­gasc ad­viser, Clon­akilty. “The f arm shouldn’t be con­fused with ei­ther the agri­cul­tural col­lege in Tip­per­ary or the nearby Shi­nagh Dairy Farm, which was set up by Shi­nagh Es­tates and Tea­gasc in 2011, to show how leas­ing land can fa­cil­i­tate prof­itable ex­pan­sion. The Shi­nagh Dairy Farm is a great suc­cess, but it re­quired very sub­stan­tial startup cap­i­tal and other models, like the one at Gur­teen, are needed, to help peo­ple make a start in dairy­ing.

Af­ter a lengthy se­lec­tion process, which took into ac­count his education, en­ergy, en­thu­si­asm and ex­pe­ri­ence, John Sex­ton was se­lected for the share-farm­ing model. Share- f arm­ing ar range­ments can last any pe­riod of time, but typ­i­cally con­tracts are signed for a min­i­mum of three years.

In this case, the con­tract is seven years long, which was the time­frame John re­quired to se­cure the debt on his 93 cows, which he pro­vided for the ar­range­ment, as well as be­ing re­spon­si­ble for the on­go­ing farm man­age­ment. “In the­ory, I could move on be­fore the end of the agree­ment, in which case I must g i ve a t l e a s t s i x m o n t h s ’ no­tice,” says John.

His home place is a frag­mented 28- hectare farm at Donough­more, Co Cork, where he has 36 heifer calves f ro m 2 0 1 7 , a n d 3 0 i n - c a l f heifers born in the spring of 2016.

This amounts to € 52,000 worth of young stock (de­pend­ing on mar­ket val­ues) to go with the eq­uity he has in the herd at Gur­teen.

“The aim is to build eq­uity a n d p o t e n t i a l l y m o ve t o an­other op­por­tu­nity at the end of the cur rent agree­ment,” says John.

His de­par­ture would gen­er­ate an op­por­tu­nity for some­one else.

Share-farm­ing

The prin­ci­ple of share- farm­ing is that the landowner pro­vides the land and in­fra­struc­ture ( milk­ing par­lour, win­ter­ing fa­cil­i­ties, road­ways, etc) for dairy­ing, and the share farmer will pro­vide some or all of the live­stock, all the labour and man­age­ment Level 6 Certificate in Dairy Herd Man­age­ment, Clon­akilty (two years)

Farm As­sis­tant with Wil­liam Kingston, Sk­ib­bereen, 220 cows (six months)

Farm As­sis­tant with Alas­tair and Sharon Rayne, New Zealand, 700 cows (one year)

Herd Man­ager for Grass­lands, New Zealand, 800 cows (one year)

Farm Man­ager for Ed Dale, Eng­land, 450 cows (three years)

“I al­ways chose to work for ex­cel­lent farm­ers and in dif­fer­ent coun­tries to im­prove my farm­ing and busi­ness skills,” says John. of the farm. Ma­chin­ery can be pro­vided by ei­ther party. Each party gets a per­cent­age of the milk cheque.

In this case, the split is 60:40 to John.

Stock sales are his, as he owns the cows, and all of the Basic Pay­ment goes to Shi­nagh Es­tates.

Shi­nagh Es­tates cover costs re­lat­ing to their as­sets, such as road­way re­pairs, while John cov­ers costs re­lat­ing to his as­sets, such as an­i­mal health costs.

Costs as­so­ci­ated with pro­duc­ing milk from the farm, such as feed and fer­tiliser costs, are split in the same ra­tio as the milk cheque. All of th­ese splits are de­scribed in the legally bind­ing share-farm­ing agree­ment, tem­plates of which are avail­able on the Tea­gasc web­site. Tea­gasc de­vel­oped this tem- plate specif­i­cally for dairy share-farm­ing in Ireland. “It is vi­tal that both par­ties com­plete a busi­ness plan and seek the ad­vice of a Tea­gasc ad­vi­sor, so­lic­i­tor and tax ac­coun­tant dur­ing the for­ma­tion of the ar range­ment,” says Tom Cur­ran of Tea­gasc.

Split­ting ex­penses

In some share-farm­ing ar­range­ments, in­come and costs are split at source, such as for milk sales, the milk pro­ces­sor will is­sue a milk state­ment to both the share farmer and farm owner with their per­cent­age of the milk for that month.

The fi­nan­cial ex­penses are mon­i­tored us­ing a spe­cially mod­i­fied ver­sion of the Tea­gasc cost con­trol plan­ner pro­gramme.

For in­puts, the sup­plier may in­voice each party for their share, for ex­am­ple, if or­der­ing six tonnes of fer­tiliser, three tonnes will be in­voiced to each party. Al­ter­na­tively, in­come and ex­penses can be split at farm level. For ex­am­ple, the milk cheque is paid to the farm owner, and they then pass this on to the share farmer, record­ing the trans­ac­tion with a short in­voice and re­ceipt. Or the fer­tiliser is charged to one ac­count and, at the end of the month, the farm owner and share farmer meet up, to keep ac­counts up to date. This is how the Gur­teen share farm­ing is op­er­ated, with Shi­nagh Es­tates be­ing the ini­tial point of con­tact for sup­pli­ers.

“On top of the le­gal agree­ment be­tween the two par­ties, there are other prin­ci­ples of how share farm­ing works, which need to be ad­hered to for a good work­ing re­la­tion­ship,” says John Mc­Na­mara, Tea­gasc ad­viser, Clon­akilty. Th­ese prin­ci­ples are: Re­spect for John to look af­ter the farm as if it was his own, and re­spect for Shi­nagh

John Sex­ton is the share farmer in the 100-cow share-farm­ing rrange­ment set up by Tea­gasc and Shi­nagh Es­tates in Ban­don, Co Cork. How it works will be de­scribed at the Share Farm­ing Open Day next Wed­nes­day at Gur­teen, Ban­don, Co Cork.

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