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Equipment and Labor Sharing:a Risk Management Tool for Small- and Medium-Sized Farmers

Kelvin Leibold

Summary

Cooperative approaches are one alternative for producers to reduce risks and more effectively manage farm resources. Faced with a shortage of available skilled labor and rapidly rising equipment costs, some producers have found creative ways to share both labor and equipment in their operations. Others have expressed interest in sharing resources, but lack the knowledge to do so. Sharing resources in farm operations has helped some farmers better manage both financial and human resources risk in their operations. Yet, sharing can have implications for taxation, liability, and farm payment eligibility not fully understood by many engaged in these arrangements, potentially exposing them to greater legal and financial risk.

This multi-state project is designed to create awareness among producers about cooperative strategies for sharing resources and to provide producers with tools for developing sharing arrangements suited to their particular situations. We aim to help producers understand the legal and financial implications of sharing informally and provide them with strategies to reduce or avoid the corresponding risks that may arise.
Workshops are designed to acquaint producers with potential benefits and difficulties created from resource sharing, drawing on real-life examples from our case study research. We have developed tools and resource materials to help producers evaluate the feasibility of their resource sharing ideas. This ‘manual’ includes ten case studies, ranging from simple cases of jointly owning one machine to formal partnerships and complete sharing, as well as spreadsheet templates for allocating costs and fact sheets on legal organization and farm payment eligibility issues.

Details

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