Sharing Farm equipment, services, facilities and more
Acquiring all the equipment and facilities that would allow a small farmer to operate with
maximum efficiency is more often than not outside their financial means. At the same
time not having access to these resources can add to labor cost, reduce productivity and
prevent expansion, diversification and/or new market development. Cooperative
purchasing and sharing agreements can make these resources accessible by spreading
ownership risks among users. Shared ownership helps members to decrease their
equipment investment and expenses while gaining access to larger scale, newer, more
efficient and technologically advanced equipment and can increase labor productivity.
Some sharing groups expand into other areas such as labor sharing, purchasing inputs and
marketing.
Interviews with farmers raise many concerns about why sharing equipment can be
difficult: What if something breaks? Am I liable? Will the equipment be in good repair?
Who will maintain the equipment? How do I know the equipment will be sanitary and
won’t bring weeds or pests with it? Will the equipment be available when I need it? How
to schedule use? How will we get large items from one from to another? Will we need a
trailer? What about equipment that is difficult to learn or use? Will we need an
operator? Will we need training? How much will sharing equipment cost?
1. Benefits of using, purchasing and/or leasing shared farm equipment
increase labor efficiency and productivity
reduce capital investment in machinery and facilities
save on operating costs
take advantage of new technology
access specialized equipment
attain greater economy of scale at a lower financial cost
And can lead to
shared labor and experience
agreements that open new markets
additional savings though joint purchasing of other farm inputs such as fuel, feed,
seeds, etc.
collaborative production systems among farmers that make better use of land
resources, improve crop rotations and facilitate joint marketing and distribution
2. What are the biggest challenges?
Scheduling: Especially during time-sensitive planting and harvesting periods
Downtime: Especially if related to improper operation
Homework: Especially taking the time and having the patience to plan operations
3. Communication
Mutual respect and trust
Ability to discuss issues and bring forth any concerns
Strong spirit of cooperation
Sharing experience and skills
Key to success: cooperate to maximize benefits and minimize challenges.
Requires members who are committed to the concept
and willing to plan, organize and capitalize the co-op.
Organizational Issues
1. Compatibility— of members and farm operations
* Personalities
* Work ethic
* Skills
* Farm type
2. Planning
a. Equipment
* What equipment is ‘worth’ sharing?
* Whose equipment would we share? Our own? description, age, condition,
value. Sell to co-op? Lease to co-op? Co-op needs to make an informed, objective
decision.
* What equipment would we purchase together? What could we lease together?
-what is each farm’s wish list? what might these items cost to aquire?
-estimate usage needed per farm per hour or per acre per machine as well as
timing
-are any of these items available from a local rental agency?
-how many farmers will use it? How many days, hours/acres per person, per
the whole
-out of this list, which items are most likely to be successfully shared?
(Consider need, time and weather sensitivity, ease of transportation, ease of
use by multiple operators, potential for breakdowns.)
* Scheduling? Who decides? When decided? Who keeps track? Can we match
the machinery capacity to farms accounting for crops, soils, seasonality; or do
a geographic rotation; or hold a lottery. Need flexibility and timeliness.
* Storage? Where will the items(s) be stored? Compensation? Insurance?
* Transport? How will items be transferred among farms?
* What equipment will include an operator?
* What equipment requires training? How accomplished?
* What are our rules of use: Decide what condition the equipment should be in
when transferred: full tank? lubed? cleaning standard? Create a checklist.
* Records:
-Log book for each item wherein each user records:
how much the equipment was used (e.g., in bales, hours, acres or ?);
the date and time of any breakdowns or any anomalies;
the date, time, and nature of any repairs or maintenance performed.
-Equipment records: Date put in service, condition and value; maintenance
plan and records.
* Policies for Repairs: Decide what kinds of repairs can be handled by the user
and what requires ‘professional’ attention. A procedure for determining the
cause of a breakdown whether from careless operation or regular wear and
tear; a method for dealing with breakdowns caused by operator misuse.
* Replacement policies; How will the co-op handle depreciation costs and afford
to replace equipment?
b. Operations:
* What are our operating items and costs?
* How will operating costs be allocated?
* Which costs will be shared and included in usage fee and which will be paid
separately by members?
* Fuel, lubrication
* Repairs, maintenance
* Replacement fund
* Depreciation
* Financing or leasing payments
* Insurance
* Storage
* Transport
* Equipment recordkeeping
* Bookkeeping
* Management
At minimum, member fees cover: the cost of financing (capital and interest)
purchase of the equipment; replacing the equipment; using the equipment,
including insurance, repair and maintenance; and storing the equipment.
c. Structure/governance
Management of the organization? Of the equipment?
How will we make decisions?
How will farmers join and leave the cooperative?
How will we plan to dissolve the organization?
4. Agreements: Everything out in the open and accessible—Clear rules and legally
binding contracts with members that spell out the rights and obligations of the
organization and its members as well as the details about use, fees, insurance,
repairs, maintenance, records, transfer among farms, storage, replacement, labor,
etc.