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What is collaborative farming?
Collaborative farming is one of those buzzwords floating around in farming circles recently. At its heart, collaborative farming is two or more farmers coming together to pool their resources to farm. Collaborative farming can take many forms such as the typical two good neighbours sharing machines or lending a piece of equipment to legal structures such as partnerships.
The most common type of collaborative farming structure in Ireland is a partnership, whereas in New Zealand, it would be more common to see a share farming arrangement. There is a lot of confusion out there as to what constitutes a share farming arrangement, and we would often hear our clients talk of entering into a share farm arrangement, but when we delve into how it is to operate it would instead be a partnership.
This article features in our Irish Farm Report 2026.
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So, what is the difference between a partnership and share farming?
Where two or more farmers come together and pool their resources to carry on the business of farming with a view to profits, they can be said to be farming in partnership. Whereas, in share farming the farmers might be pooling their resources but they are not sharing the profits, they are sharing the gross income and are responsible for their own costs. Not much of a difference in that you might say, however, the difference can give rise to a lot of tax and legal implications.
Farm Report 2026 Statistic:
For farmers who don’t have a successor and/or a non-farm successor chosen, 8% stated they are open to share farming as an option and 15% would be open to a partnership.
What is Revenue’s view of a share farming arrangement
If you are going into a collaborative farming arrangement and points 1-3 below are not true, then it is likely that you aren’t in a share farming arrangement but a farm partnership. If there isn’t an equal relationship and one party is being guaranteed rent, then it more likely that it’s a lessor/lessee arrangement. If one party is being paid a wage and is subservient to the other, then it’s an employment.
1. Each farmer is free to sell their share of the produce as they feel fit
2. Each farmer is responsible for their own costs of production
3. Each farmer calculates their own individual profits
4. They are two business equals and are risk takers. Neither party can have guaranteed income and there cannot be a master/servant relationship
5. No rent is paid for land, nobody is paid for labour and no contracting charge is paid for the use of machinery
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Why does it matter?
There can be serious tax, legal and Deptartment of Agriculture consequences if you think you are operating a share farm arrangement but are instead farming as a partnership or the arrangement is closer to a lease or an employment.
Let’s take the legal differences between a partnership and share farming as an example. Where two farmers come together to farm in partnership, the stock and the machinery of the farmers are transferred to the partnership, and the farmers no longer owned by the individuals but owned by the partnership. The partners are owed by the partnership for whatever they have contributed, but that figure can change year on year based on profits, drawings and a whole multitude of different things. Whereas, if two dairy or beef farmers entered a share farming arrangement, they would still own their own stock. If they had intended to operate as a share farmer but actually operated as a partnership, then on a breakup it’s possible that one farmer could have a claim against the stock of the other farmer.
Another common scenario we would see is where a partnership or share farming arrangement essentially guarantees the income of one of the parties. Depending on how the income is guaranteed this could be rental income or an employment. This could have very significant tax consequences for succession reliefs if Revenue took the view that the share farming arrangement was only being used to mask a lease of the land.
Which one is it?
So, when you are looking at going into a collaborative farming arrangement, it’s important from the outset for all parties to agree what they want from the arrangement and how it is best to operate the arrangement in practical terms. Whether a partnership or a share farming arrangement works better will depend on the answer to these two questions and the agreements can be drafted as required.
Getting the paperwork right from the start can mean a lot less legal, tax and Department of Agriculture headaches going forward.
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