Contract farming agreements

We provide expert legal advice on contract farming agreements, ensuring landowners and contractors have a clear, legally sound arrangement.

Our team helps define responsibilities, profit-sharing terms, and risk management to protect your interests. With our in-depth understanding of rural law, we offer tailored solutions to support the success of your farming operations.

Contract farming agreements form a strategic partnership between landowners and contractors, allowing both parties to benefit from shared resources, expertise, and investment. These agreements set out clear terms on responsibilities, financial contributions, and operational control, ensuring efficiency and legal security for both sides.

Without a well-structured agreement, disputes can arise over profits, land use, or compliance with agricultural regulations. Having the right legal framework in place provides stability, maximising productivity while protecting each party’s interests.

Defining roles and responsibilities

A contract farming agreement must outline the contributions and obligations of both parties to prevent confusion and safeguard the working relationship. The landowner typically provides the land, buildings, and fixed assets required for agricultural activities, ensuring they remain in a suitable condition for operations. Retaining ownership of these assets is key to maintaining long-term control over the land.

The contractor is responsible for supplying labour, machinery, and technical expertise. Managing the daily farming operations, they take on the role of running the farm efficiently, making key decisions regarding crop rotation, livestock care, and general farm management. Clearly defining these roles from the outset prevents misunderstandings and ensures both parties benefit from the arrangement.

Financial arrangements and profit distribution

A well-structured financial agreement is essential to the success of a contract farming arrangement. Profits and costs must be fairly allocated to reflect each party’s investment and contributions. Many agreements establish a joint account for handling farm-related income and expenses, providing full transparency. The contract should clearly define the percentage split of net profits and detail how operational costs, such as seeds, fertilisers, fuel, and equipment maintenance, are covered.

Failure to outline financial responsibilities in precise legal terms can lead to disputes and financial strain. Landowners and contractors must also consider tax implications and accounting practices, ensuring that the agreement is structured in a tax-efficient manner that complies with UK agricultural regulations.

Legal considerations and compliance

Without a carefully drafted contract, a contractor could unintentionally acquire tenancy rights over the land, creating significant legal complications for the landowner. The agreement must make it clear that the contractor does not hold any form of agricultural tenancy and does not have security of tenure. This ensures that the landowner retains control over their property and avoids any unintended legal disputes in the future.

Agricultural compliance is another critical aspect of contract farming. UK farming regulations frequently change, affecting land use, subsidies, and environmental obligations. Both parties must comply with these legal requirements, ensuring that the farming activities meet industry standards. This includes environmental responsibilities, animal welfare regulations, and health and safety requirements.

Benefits of contract farming agreements

For landowners:

Contract farming provides a way to maintain control of their land while increasing profitability and operational efficiency. Engaging an experienced contractor allows them to benefit from modern farming techniques and economies of scale without the burden of day-to-day farm management. The arrangement can also help landowners qualify for agricultural tax reliefs while ensuring the land remains productive.

For contractors:

The agreement offers an opportunity to farm without the significant financial burden of purchasing land. Accessing a larger area of farmland allows them to expand operations, improve economies of scale, and grow their business. It also provides a structured financial model, giving them clarity on expected returns and costs.

Why choose Moore Barlow?

Expertise in agricultural law

Moore Barlow boasts a team of solicitors specialising in agricultural law. Our deep understanding of the farming sector ensures tailored legal solutions for your needs.

A personalised service

We take the time to understand your unique circumstances, crafting agreements that reflect your specific goals and protect your interests.

A proven track record

Our history of successful partnerships and satisfied clients speaks to our commitment to excellence in the agricultural legal field.