Need thoughts on a share cropping idea...

I have no idea what an industry standard for this type of arrangement would be, so please post a response if you have done something similar.

I want to raise some rabbits on someone else's land. I will provide 100% of the inputs, breed the rabbits, market the rabbits, etc... The land owner will be providing the land and provide daily care for the animals. Basically, feed, water and check the animals for issues twice a day.

To incentivize the land owner to take good care of the animals I would like to make the arrangement based of off sales, not a set "rent".

What would a fair market split of sales be? Or, do I need to think in some completely other direction?

Joe

I usually see people farming on other folks land in a way that doesn't involve the landowner providing any labour, so this is a bit different. I don't know that there is anything wrong with the idea, but you're quite dependent on the landowner doing their part; if they don't come through, you've got a problem. Are you able to step in and take over their portion if they bail/fall ill/get trampled by a moose? Are you writing this into the contract, so they don't still expect their full share if they can't deliver as planned?


To figure out a fair split, I'd try and list out of all the inputs and assign estimated values to them.

Do you have a sense of how the labour divides out?

Are you providing the infrastructure and equipment? Cages, fences, and buildings, feeding equipment? How much are you expecting to spend? Some of this might be capital assets rather than annual expenses.

Depending on the land values in your area, nominal rent at farmy rates is probably less than you will put into inputs. Do have some sense of what land rents for in your area? How much space will this take?

I would think that out of those figures, some notion of a fair division will emerge, even if the figures are a bit rough.

If the farmer is putting in 2 hours per day to take care of the animals, and you want to compensate at $15 per hour, then the farmer needs $11,000 per year for labor, plus the going rate for land. Non-farmers tend to underestimate the amount of labor that goes into farming...

Around here, the going rate for farmland with absentee landlords is about 0% to 15%.

Land owners that move irrigation pipe twice a day during the growing season generally get half the harvest. The farmer provides seed, equipment, and labor for planting and harvest. I think this is most similar to your deal...

Dillon Nichols wrote:I usually see people farming on other folks land in a way that doesn't involve the landowner providing any labour, so this is a bit different. I don't know that there is anything wrong with the idea, but you're quite dependent on the landowner doing their part; if they don't come through, you've got a problem. Are you able to step in and take over their portion if they bail/fall ill/get trampled by a moose? Are you writing this into the contract, so they don't still expect their full share if they can't deliver as planned?


To figure out a fair split, I'd try and list out of all the inputs and assign estimated values to them.

Do you have a sense of how the labour divides out?

Are you providing the infrastructure and equipment? Cages, fences, and buildings, feeding equipment? How much are you expecting to spend? Some of this might be capital assets rather than annual expenses.

Depending on the land values in your area, nominal rent at farmy rates is probably less than you will put into inputs. Do have some sense of what land rents for in your area? How much space will this take?

I would think that out of those figures, some notion of a fair division will emerge, even if the figures are a bit rough.

I am providing the cages, fences, buildings, feeding equipment, etc...zero expense to the land owner.

The land owner will only be spending about 40 minutes a day feeding, watering and checking on the animals.

So far I am thinking that their labor rate of $10/hr will be used to compensate for the care of the animals which would be $2,500 annually.

If that is agreeable, then we will need to come to an agreement for the very small amount of land that will be used. The land owner has identified the value of the rabbit poo and asked for all of it as part of the compensation plan.

Joe

Joe Camarena wrote:I am providing the cages, fences, buildings, feeding equipment, etc...zero expense to the land owner.

Will you be paying for: Property taxes, Shells for the shotgun, Water, Equipment to move poop, Dust masks, Pencils, The lost productivity of the land occupied by the rabbitry and associated infrastructure, etc?

Joe Camarena wrote:The land owner will only be spending about 40 minutes a day feeding, watering and checking on the animals.

Only? I suppose that the farmer will also be providing 24 X 7 security against vandals, thieves, and predators. And meeting with the veterinary. And fixing fences and cages. And attending to the feed delivery people. And hauling garbage. And chasing loose animals. And changing bedding. And shoveling poop. And chatting with the animal's owner. And giving special attention to pregnant/birthing does. And Moving animals. And disposing of dead/injured animals. And fixing fences. Perhaps building fences or infrastructure? You feeding any greens to the animals? Farmer harvesting those? Or moving animals between pastures? You expect the farmer to do any record keeping?

Joe Camarena wrote:So far I am thinking that their labor rate of $10/hr will be used to compensate for the care of the animals which would be $2,500 annually.

It would be hard for me to feel very involved with a near minimum wage job that I had to show up to twice a day every day, and that expected me to be constantly on call and constantly vigilant, and that only paid $6.70 per day. Especially if the amount of work actually performed were seriously underestimated.

Your input has been noted. But let me add something. The landowner wants the rabbits there and I want to expand my rabbitry.

BLUF: the deal has to work for both people (be profitable), or it will not happen.