HN

Notes on Share Farming Agreement and Farm Operations Discussion

Current Share Farming Agreement Negotiation

  • The speaker and Pete are discussing adjustments to their share farming agreement, focusing on the milk percentage split and cost allocation.

  • The initial proposal from the speaker involves receiving 25\% of the milk check each month while paying for 25\% of the grain and 25\% of the hay harvest labor costs.

Financial Discrepancies and Proposals

  • Pete's Perspective:

    • Pete believes the proposed 25\% split is unfair because after all her allocated expenses, the income difference between them would only be \$32,000 .

    • Pete's estimated income after all expenses (tractors, insurance, loan, hay, 75\% of grain, and other farm needs) would be \$141,000 .

    • Pete questions why she should give up an additional 5\% of her income when she owns all the cows and farm assets, and bears the costs for their maintenance and setup.

  • Speaker's Perspective:

    • The speaker's estimated income after paying her 25\% share of grain and hay harvest would be \$111,000 .

    • The speaker argues that Pete's \$140,000 income is after paying for all her significant assets and associated costs (rent, tractor loans, ute loan, insurance), whereas the speaker has no comparable assets.

    • The speaker is currently unhappy with their income and feels it is not fair given the responsibilities and work involved, especially compared to a standard wage job where unforeseen issues are not their responsibility.

    • Speaker's Personal Expenses Example:

      • A new car loan would cost approximately \$1,200 per month, totaling \$14,400 annually.

      • This would reduce the speaker's initial \$111,000 to \$97,000 .

      • Adding another personal expense (star income insurance) of \$140 per month (totaling \$1,680 annually), further reduces the speaker's net income to approximately \$94,000 .

      • Comparing this to Pete's \$141,000 , the actual difference in take-home pay becomes over \$43,000 , not accounting for other personal expenses.

    • Alternative Proposal: The speaker is willing to consider a 20\% share with absolutely no cost contributions for the first year, emphasizing that this initial period allows them to get on their feet.

    • Tax Implications: A higher percentage for the speaker would lower Pete's taxable income, which was highlighted as a potential benefit to Pete.

    • Inaccurate Financial Data: The figures used are based on the last financial year, which included several non-recurring or non-operational expenses distorted the actual profit available for distribution:

      • \$22,000 for an excavator.

      • \$14,000 in subcontracting for Benjamin.

      • \$10,000 given to the speaker for a portable loan, plus other payments to the speaker.

      • Totaling approximately \$55,000 in expenses that are not accurate for ongoing operational costs.

Labor Allocation and Responsibilities (Kylie's Role)

  • Pete's Argument: Pete argues that since she pays Kylie \$661 per week for six milkings (Monday to Wednesday), she should financially have those days off and not have to give up more percentage for labor.

  • Speaker's Counter-Arguments:

    • Pete only pays Kylie for the milking, not for general farm work throughout the entire day. Therefore, Pete is not fully relieved of all duties on those days.

    • The speaker believes it is Pete's choice to pay Kylie, and this personal choice should not burden the speaker with extra work or justify a lower income share for the speaker.

    • The speaker proposes a fortnightly roster system:

      • Week 1: Speaker works Monday-Wednesday (and choose not to pay Kylie, performing all duties themselves), and Pete works Thursday-Sunday.

      • Week 2: Pete works Monday-Wednesday (and can choose to pay Kylie or do the work herself), and the speaker works Thursday-Sunday.

    • This system ensures an equal split of responsibility and prevents Pete from using Kylie's payment as leverage against the speaker.

    • The speaker emphasizes that they have no control or say over Monday-Wednesday farm operations if Kylie is paid by Pete, yet they are expected to pick up the slack if Kylie becomes unavailable (e.g., calling in sick).

Communication and Interpersonal Dynamics

  • Lack of Communication: The speaker notes a general lack of communication, including a weekend incident where Pete blamed the speaker, but Pete also failed to communicate vital information.

  • Work Hours Disagreement: Pete initially suggested the speaker