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Show UTAH FARM BUREAU Page 4 June 1968 NEWS PARTNERSHIP The family partnership i TJi r AORKABLE AGREEMENTS FOR JOINT FARM OPERATIONS Farms are growing larger in Utah and many of us have looked into the possibility of carrying 8 on our operations with another family. If we are an established farmer, this might be with our son or I If we are a younger farmer getting son-in-la- w. started, this might be with our father or father-in-la- w. H ' a In Joint Farm Operations ? records; the business. The general pattern of Each party is paid for wh the use of what he conti The farming partnersh 8 SOME WORKABLE I AGREEMENTS and (6) having all farm ex (2) iness; partnership bank account; income remaining after exp or losses shared, acco IFOR i day-to-d- ay O What Are Some of the Advantages to he Gained By Both the Older and Younger Farm Family labor. The major attribut (1) Joint participation in ir of profits and losses; (3) j (4) having a firm name; (! BA all know that it isnt as easy to get started in farming today as it was 30 years ago. Land I JOINT FARM OPERATIONS prices have gone up and up. The price of mach- Si inery is higher than ever before. About the only 1 thing that hasnt kept pace is farm prices - they are As is true in other business, young men need still far too low. in getting started and established in farming. Some say that the surest way to become a farm I help Help is needed to obtain (1) a farm on which to opowner today is to marry the only daughter of a (2) training and experience in farming; and successful farmer who is ready to retire, or to be 1 erate; (3) the finances and capital. the only son of a farmer who is ready to leave the An older farmer may be looking forward to let1 land. ting up a little on the heavy work. He may want to be It could easily take $75,000 to $100,000 to get responsibility of started in farming today. There are not many young 1 relieved of some of the operations. families who have that much to invest. Some of the A workable agreement for joint farm operations money can be borrowed from a Federal Land Bank can benefit both the younger and the older farmer. or other sources, if we have good security. InA son can gain from his fathers experience and guidterest rates are high and banks are careful about ance. A father can benefit from the new vigor and making loans. ideas of his son. The older farmer who is looking toward taking The farming operation must be large enough to things a little easier has his problems, too. He has provide a satisfactory living for both families. With a tremendous investment in land, livestock, machtwo families involved, it may be possible to rent inery, and buildings. Labor is scarce and wages more acres or to increase the operations on the land are high. already owned. One approach is for two families to make an A' agreement to carry on their farming operations toHere are some of the most common agreements gether in a way that both will benefit and both will for joint farm operations: be satisifed. There are many problems involved when two sssfi families decide to farm together. We all know about joint operations wrhich havent worked well. RENTAL One of the dangers is that there may be no clear understanding when the families decide to start Rental is one of the simplest forms of agreefarming with one another. Usually it is peaches ment. The farmer rents part or all of his land to and cream in the beginning, but as time passes another person. There is an agreement on how much there are sure to be misunderstandings unless the rent shall be paid, and when. Some fathers prefer a agreement is clear and well understood by parties. We are fortunate in Utah that there are many specific cash rental to be paid by a son who operates the farm. This provides the parents with a regular successful joint farm operations. Before entering into such a program with a relative or someone income, while they retain the title to the farm. If outside our family we can visit with those who have the son is sure that he is going to inherit the farm, made a success of working together. then not buying while his parents are alive might have Our county Extension agent, our banker, our However, a sale of all or part of the advantages. farm to the son with a mortgage back to the parents family lawyer, our Farm Bureau insurance agent, and scores of others can offer us good advice and would be more desirable in some cases. The parents would get cash and an annual flow of income assistance. We need all of the help that we can get from this sale type. The rate of return to the parbefore we go very far in carrying on our farming ents should be as high or higher than can be oboperations with another family. tained from savings accounts. The son would have We vice for the joint operation ship is a legal relationship; two or more persons vhc owners, a business for profil When two families decid both share in the responsibi' and labor, or one might fan the younger members of ti agement when the father promote family harmony, disputes within the fami have to be dissolved and t When a person who is decides to form a partne pared to give up some c sets. Income and manage be shared, though it is manage the farm and foi trol of the partnership pr agreement. O What is Your Opinior WAGE AND INCOfil SHARING AGREEK A wage and income-s- h ginning agreement when ti wants to stay on the hom well adapted to situation want to become too financi Under this plan, tl farm, the housing for his property, and his own lal farm expenses are paid works on the farm full ti anteed monthly wage and income. The wage rate p: to the current wages for help. The advantages of thi way to see if the son n they get along well tog experience, (3) it gives tl in the entire farm busines to start, and an easy way property is involved. The disadvantages oi sons major interest may 1 the payment in wage ings; (3) the son does n business; and (4) such a (2) sons managerial ability, bility. The keeping of good to the successful working the advantages of ownership. O What are the Advantages and Disadvantages Of Renting? O What Is Your G Income Sharing M |