AgDM newsletter article, February 1998
by Phil Hufferd
Traditionally, farming has been a business in which most or all of the work was done by the family. Exceptions included threshing small grains (a threshing machine was too expensive to be owned by one family), and making hay (more labor was needed than one family could provide). Over the years, as farms became more capital intensive, even this type of sharing has almost disappeared.
However, things may be changing. Some farmers find that they can benefit by working together with their neighbors. For example, one farmer may find that he needs more labor while another doesn’t have enough machinery. So they may work together to trade machinery and labor between the two of them. In another situation two or more farmers may purchase machinery together, such as a combine. Or the agreement may involve providing or hiring custom work. In yet other situations they may develop a joint venture where they farm together.
Advantages of working together
As the cost and size of machinery increases and profit margins narrow, some farmers are seeking ways to get the job done at a lower cost. This may be achieved by working with a neighbor and spreading the cost of the expensive machine over more acres.
Farmers may find themselves in need of skilled and dependable labor during peak work periods. Working with a neighbor who is experienced but not fully utilizing his labor may be an excellent way to solve this problem.
Farmers with smaller acreages are able to exchange excess labor for dependable, high quality machinery services. This allows them to get machine services at a lower cost than by owning the machine or hiring a custom operator.
just stayed in the planter . . . we never had to stop."
-- farmer who recently had surgery.
An important benefit, often not considered, is that you have back-up machinery and labor in the event of a major break-down or temporary incapacity due to illness or injury.
Last spring a farmer found himself recovering from surgery. For most farmers this would have presented a serious problem because of the pressure to get the crops planted. But this farmer was a member of a four-farmer alliance for pooling machinery and labor. The farmer said “ I just stayed in the planter, and when I needed something I called them on the cell phone”. “We never had to stop.” “This program saved my life.”
Creating a farmer alliance
The goal of working together is to develop an agreement that maximizes the use of capital and labor resources over the entire acreage. This allows the members to get things done more efficiently and/or effectively than they could by doing things individually. To evaluate if a farmer alliance is for you, answer the questions below.
What will I get
out of it?
A successful farmer alliance needs to be developed specifically to meet the needs of the individuals involved. So carefully evaluate the goals and needs of each individual members. Do this is by having them answer the questions below.
Is the alliance
To be successful, the farmer alliance must be built on a solid foundation. Use the questions below to evaluate the soundness of your agreement.
How do we proceed?
Once you have decided to create a farmer alliance, you need to implement it. Use the questions below to help develop an agreement.
You can get help in developing an agreement by calling your local Extension Farm Management Specialist and/or obtaining copies of these extension materials.
Decision File Labor and Machinery Sharing Agreement.
PM 1450 – Machinery Management – Joint Machinery Ownership
FM 1844 – Dividing Income in a Joint Farming Agreement