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Often, buying and selling agricultural land has become extremely expensive in 2025.
To overcome this, many farmers have explored alternative arrangements to generate profit more efficiently. One of the most popular strategies nowadays is share farming.
In a share farming arrangement, a landowner extends their land to another farmer. The parties then share both the expenses and the profits – all while operating as independent businesses.
This could be an excellent way to expand your farming capabilities, but it’s crucial to ensure you set it up correctly to protect both parties’ interests.
While a handshake might seem sufficient, having a written agreement is essential to avoid misunderstandings and disputes down the track. In 2025, with the increasing complexity of farm operations and advances in digital management tools, getting your share farming arrangement in writing is more important than ever.
This is why you need a contract: a legal document that clearly sets out the terms of your agreement, ensuring both parties are on the same page and safeguarding against any future conflicts.
In this case, you would benefit from a Share Farming Agreement, which can be tailored to meet the specific needs of your farming arrangement.
How Does Share Farming Work?
At first glance, share farming might seem like a simple setup where two farmers work together on the same plot. However, the arrangement is more nuanced and involves detailed planning.
In a typical share farming arrangement, the landowner effectively ‘leases’ a portion of their land to another farmer. But it goes beyond a standard lease – the other farmer uses the land to produce crops and generate profits, with both parties sharing in the rewards.
This approach essentially constitutes profit sharing, where both income and operational expenses are divided between the two parties. It’s an ideal solution for maximising productivity while minimising financial risk.
In 2025, advancements in agricultural technology and digital record-keeping have further refined share farming arrangements. Many farmers now utilise mobile apps and data analytics to monitor crop yields and manage expenses, ensuring a transparent division of profits. For more on how evolving business practices impact your operations, check out our article on Does Business Structure Matter?.
It’s important to note, however, that the independent farmer is usually classified as an independent contractor under current law – so ensure you don’t inadvertently treat them as an employee. We’ve discussed the crucial differences between an employee and a contractor here.
Every share farming arrangement is unique. Your Share Farming Agreement should be customised to reflect the specifics of your arrangement – including how the farm is shared, the division of income and expenses, and the minimum standards that the independent contractor must maintain. For a comprehensive review and redraft of your agreement, consider our contract review services.
Why Do I Need A Share Farming Agreement?
Given the detailed and specific nature of share farming arrangements in 2025, relying on a generic template is not advisable. Your agreement needs to cover all aspects of the partnership to avoid any ambiguity.
A Share Farming Agreement will clarify expectations right from the start, addressing key issues such as:
- How income and expenses will be divided;
- How the farm will be shared and operational responsibilities allocated;
- The minimum standards required for the contractor to maintain and manage their share of the farm;
- How communication and decision-making will be managed (e.g. through regular meetings);
- Contingency plans for unexpected events or market changes in today’s dynamic agricultural landscape.
Need Help With A Share Farming Agreement?
Because share farming arrangements can vary significantly, you’ll need a tailored agreement rather than a one-size-fits-all template.
A good lawyer can take the time to understand your specific needs and draft an agreement that protects your interests. Modern farming agreements often incorporate digital solutions and up-to-date regulatory compliance measures to ensure all aspects of your partnership are covered. For additional guidance, you might also find our article on legal aspects of starting a small business to be invaluable.
Don’t hesitate to reach out to us at 1800 730 617 or team@sprintlaw.com.au if you need help drafting or reviewing your Share Farming Agreement.
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