JOINT VENTURES DO THEY OFFER OPPORTUNITIES FOR NEW ENTRANTS AND OLDER FARMERS?


What options are available for joint ventures in dairy farming businesses? Rob Hitch, partner with dairy specialists Dodd & Co Chartered Accountants, considers the various structures and what they can offer both new entrants and established farmers


I


have been involved with a number of joint venture businesses in the dairy sector, dating back to 1998 when I first put two farmers together. One, who was facing a large investment in a new parlour, teamed up with another who had just built a new parlour. They put together two herds of cows and ran them as one, enabling the older partner to retain an interest and income from the dairy and the younger one to spread the costs of improved infrastructure over more output. Eventually the younger partner purchased the older’s interest in the business. I’ve been involved with other joint ventures including share farming and partnerships for pedigree Holstein breeders and contract farming and company structures for larger grazing and housed units. These have involved small 80 cow ventures to the abandoned 4500 cow Nocton Dairies proposal.


50 THE JOURNAL APRIL 2015


So what do all these proposals give their respective partners?


Asset protection


While accountants often write about protecting assets such as land and farmhouses from inheritance tax relief, joint ventures can often protect more esoteric things such as cow families and herd prefixes.


All well structured share farming, contract farming or partnership/company structures should protect each party’s capital gains and inheritance tax reliefs


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