Area One Farm Partnerships
Crop share agreement
• Buy land together, and operate as crop share.
• Usually a starting point for partnership because it is an easy addition to an existing farm.
Full farm partnership
• Buy land, infrastructure, machinery and inputs together. Operate as a joint venture with the Farm Partner.
• Funds the land improvement work or value-added infrastructure, which otherwise may be difficult to finance.
• The Farm Partner puts in as much equity as they can or want to, through contribution of land and machinery or cash, and Area One puts in the remainder required to purchase.
• The Farm Partner earns the following:
- 100% of the income and appreciation from their portion, as a co-owner;
- An additional 15% of income (before land cost, i.e. debt or rent); and
- 10 – 15% of appreciation on Area One’s portion.
Months 1 – 3
• Complete diligence on farmer.
• Develop customized partnership agreement.
• Create new farm corporation.
• Adopting farm tracking technology.
Years 1 – 10
• Operate as a joint venture.
• Farmer maintains control of operation.
• Purchase additional land with farmer.
Year 10, extend or exit
• Continue to operate as joint venture for 5 additional years.
• The farmer will buy out Area One (or a portion).
• Both parties agree to sell.