3.0 BACKGROUND
Very little is known about the origins of the sharemilking industry. However, it is generally accepted that it originated from the Scottish concept of share farming and was melded with the American share-cropping arrangement in the 1880's to produce an agreement which has led to the development and institutionalisation of sharemilking in the New Zealand dairy industry.
The first recorded sharemilking partnership was on the Tairei Plains in 1884. Since then, considerable variation has occurred in the share taken by the milker from the quarter and third share agreements in prominence at the turn of the century, through to the half share, 29% and 39% agreements of the 1930's, and the variable order (19-40%) and 50/50 sharemilking positions of today.
By far the most compelling reason today to employ a sharemilker is, as it was a century ago, to enable the farm owner to discontinue milking cows while retaining a reasonable income and modest return on investment. Whether this be for reasons of either health or sanity, there are very few farmers who aspire to milk cows all their lives. By employing a sharemilker, the farm owner can gradually reduce their involvement in the farm, depending the type of agreement they adopt.
Other benefits which accrue to the sharemilker and the dairy industry in general could be considered as incidental but are also vitally important in forming an ongoing mutually acceptable relationship between sharemilker and farm owner. These benefits have historically included for the sharemilker the opportunity to earn a level of income which will enable them to purchase a farm, and for the industry a level of motivation leading to greater productivity and minimal industrial unrest.
Returning to the present day, there is a general feeling within the industry that farm owners are not achieving an acceptable return on their investment. For this reason, pressure has come on the 50/50 agreement, resulting in change to the effective apportionment of income and expenditure between the sharemilker and farm owner. However, this is raising concern among sharemilkers whose ability to purchase a farm, the traditional end point of a sharemilking career, is being compromised by reduced returns and a widening gap between cow and land values.
At this point, it is necessary to come back to the reasons for the existence of the sharemilking system, which are to allow farm owners the opportunity to discontinue milking and day to day management of the farm. The benefits to the sharemilker of being able to get a return on their labour and capital are really coincidental, but have been of great importance in the continuing existence of the sharemilking system. The demands of the farm owners are likely to drive the direction of sharemilking agreements in the future. However, sharemilkers still have a major role to play as they are the labour force seen as being able to provide the best productive return from properties. Obviously a compromise will have to be reached. This project sets out to address these problems from the perspective of the grass roots of the industry, the sharemilker and farm owner.
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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