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Alberta Crop Share Agreements

Alberta crop share agreements: Understanding the basics

If you are a farmer or a landowner, you may have heard about crop share agreements. This type of agreement is quite common in Alberta, where farmers and landowners share the risk and the profits of a crop. If you are considering a crop share agreement, it is essential to understand the basics and how to make it work for you.

What is a crop share agreement?

A crop share agreement is a legally binding contract between a landowner and a farmer. The agreement stipulates that the landowner provides the land, while the farmer provides the labour, equipment, and inputs needed to grow a crop. Once the crop is harvested, the profits are shared according to the terms of the agreement. Crop share agreements are typically used for long-term crops such as grains, oilseeds, and pulses.

How does a crop share agreement work?

A crop share agreement is an agreement between the landowner and the farmer. It defines the terms of the partnership, including the percentage of the crop that each partner is entitled to receive. The agreement also outlines the responsibilities of each partner, such as the planting and cultivation of the crop, as well as the harvesting and marketing of the crop.

The crop share ratio is typically based on a percentage of the gross revenue from the sale of the crop. This percentage can vary depending on the circumstances, with some agreements being split 50/50 between the landowner and the farmer. Some agreements may be more heavily weighted towards one partner, depending on the amount of work or investment required.

Benefits of a crop share agreement

Crop share agreements have several benefits for both farmers and landowners. For farmers, crop share agreements provide an opportunity to expand their operations without having to purchase additional land. This is especially beneficial for young farmers who may not have the capital to invest in their own land.

For landowners, crop share agreements provide a steady income stream without having to invest in equipment or labour. This is particularly beneficial for retired farmers who may no longer want to manage their land but still want to benefit from it.

Crop share agreements also give both parties a shared interest in the success of the crop. This encourages both the landowner and the farmer to work together to achieve the best possible outcome.

Key considerations for a crop share agreement

Before entering into a crop share agreement, it is important to consider several key factors. These include:

- The type of crop to be grown

- The length of the agreement

- The percentage of the crop share

- The responsibilities of each partner

- The marketing and sale of the crop

- The payment schedule

- The termination clause

It is also important to work with a lawyer or professional advisor to ensure that the agreement is legally enforceable and protects the interests of both parties.

In conclusion, crop share agreements are a popular way for farmers and landowners to share the risk and the rewards of growing a crop. Understanding the basics of these agreements is critical to making an informed decision and ensuring a successful partnership. By carefully considering the key factors involved, farmers and landowners can enter into a crop share agreement that works for everyone involved.