Equity partnerships, profit sharing, modern leasing where the lease cost is linked to gross farm income or commodity prices, and wages plus performance-based incentives were all options where the farming business generated income for the owner and the young farmer gained management control and was rewarded for achieving results.
Bennett said agreements that required “skin in the game” consistently produced better results than those that didn’t.
All could be structured into low equity-type agreements to make it a win-win for both parties.
“It might be that the lessee comes up with 10, 20 or 30% of the equity, or owns a percentage of the land or stock. Also, if the two parties kept working together the type of agreement could morph into a new arrangement.
"A possible example was a wages plus-performance agreement changing to a stock-plant lease and then an equity partnership."
He said that in the central Hawke’s Bay, hill-country lease values were still about $275-$300/ha. Flat land lease values had softened slightly from $780 to $750 but would most likely hold, especially on land that could be irrigated if the Ruataniwha dam gets the go-ahead.
