As the agricultural industry begins to navigate uncharted waters in response to the challenges and potential changes in public assistance, H-H Land-Estates is beginning to see many businesses moving away from more traditional agricultural structures. The farmer is the landowner who has taken the services of another, known as a “contractor” and who is engaged in agricultural activities for a certain period of time. It is a flexible agreement, determined by the needs of the parties involved, which provides an ideal platform for a mutually beneficial joint venture. The main principles were that, through partnership and dialogue, these agreements included financial compensation for past damages related to non-#8 contractual commitments to agricultural benefits. These joint agreements have been approved by First Nation members in community votes over the past year. It is essential that CFAs are properly managed to ensure that the landowner is able to meet the capital tax benefit requirements, both personally and capital tax requirements. While Contract Farming Agreement offers many benefits, it is urgently reported that professional advice is sought before an agreement begins. It is important that a CFA agreement also requires the landowner to continue to be actively involved in the management of farms, which ensures that he retains his “farmer status” and that he can continue to receive and apply for the basic payment scheme and environmental protection schemes. This situation will change later, as the new Agriculture Act stresses that financial assistance to farmers is probably determined by the Environmental Land Management Scheme (ELMS).
“The overall goal of a CFA is to improve business efficiency by improving the company`s performance. Although the use of contractors in the agriculture sector has long established itself as an effective business model, both parties are opening up new opportunities by introducing a CFA and investing fully in the business while preserving their individual identity as a separate company. This also applies to newcomers who wish to expand existing farms without having to finance the purchase or lease of land. Tim continues: “CFAs are different from more traditional agreements such as Farm Business Tenancies, which many partners may be reluctant to do because of increased contractual constraints.