The terms and conditions of the Sharemilking Agreement (applicable in cases where the sharemilker does not provide the herd) as settled by the Sharemilkers' Section of Federated Farmers of New Zealand (Incorporated) and the Sharemilker Employers' Section of Federated Farmers of New Zealand (Incorporated).
In this Agreement, the following definitions apply:
dairy company relates to any company that processes milk
farm owner is the person named as the farm owner in the Agreement. A farm owner is any person by agreement with whom a sharemilker is entitled to receive a share of the returns or profits derived from the dairy farm operations
notice of dispute has the meaning given to it in clause 139
season means a dairy season beginning on 1 June in any year and ending on 31 May in the following year
sharemilker is the person named as the sharemilker in the Agreement. A sharemilker is any person contracted to perform work on a dairy farm (other than an employee) and who is entitled under a Sharemilking Agreement to receive a share of the returns or profits derived from the dairy farm operation
working day means a day of the week other than Saturday or Sunday on which banks are open generally for business in New Zealand.
Agreement made, pursuant to the Sharemilking Agreements Order 2011, on [date]
Full name: (the farm owner)
Full name: (the sharemilker)
The farm owner must, before signing this Agreement, provide to the sharemilker, for the past and present dairy seasons, the following records, if available, concerning the herd's status:
| || ||Records||Received||Comments|
| ||(b)||Enzootic bovine leucosis (EBL) ||[specify]||[specify]|
| ||(d)||Milk grading||[specify]||[specify]|
| ||(e)||Somatic cell counts ||[specify]||[specify]|
| ||(g)||A copy of the herd profile and herd records||[specify]||[specify]|
Annual grazing-off policy
Legal description of land
Area of land to be used by sharemilker
Machinery, implements, and vehicles
If the sharemilker is required to supply machinery, implements, and vehicles, the farm owner and the sharemilker must agree on a set amount to meet the running costs and supply of the machinery, implements, and vehicles. These amount(s) are to be specified in Annex 1.
The farm owner and the sharemilker must, on termination of this Agreement, account to each other for the items of machinery, implements, and vehicles.
Fertiliser and lime costs
If a contractor is used, the farm owner must pay all costs associated with the purchase, cartage, and spreading of fertiliser and lime.
Term and renewal of Agreement
(b) If the farm owner and the sharemilker indicate in writing, no later than 3 calendar months before the expiry of this Agreement, a willingness to renew or renegotiate the Agreement for a further term, then the Agreement may be renewed or renegotiated accordingly. If either or both of the parties indicate in writing an unwillingness to renew or renegotiate this Agreement, or the parties do not indicate either way, then this Agreement will terminate on the date specified in paragraph (a).
Penalties incurred by way of grades, or penalties or deductions incurred from the dairy company, must be paid by the sharemilker, unless there are matters outside the sharemilker's control that prevent the sharemilker from producing the finest-grade milk. This clause is subject to clauses 63 to 66.
Note: Any historical soil contamination will be the farm owner’s responsibility.
Replacement calves and calves sold
The farm owner is entitled to select for rearing for herd improvement and replacement purposes (or in the absence of that selection the sharemilker must do so) up to 25% of the total minimum number of the herd specified in clause 42. Unless otherwise agreed in writing, all other calves are to be sold in the farm owner's name.
The sharemilker must tend and rear calves if required by clause 21, and must feed the calves according to the directions of the farm owner. In the absence of directions from the farm owner, the sharemilker must observe good farm husbandry in accordance with clause 39.
Other calves reared
If, under clause 22, additional calves are reared by either the farm owner or sharemilker in excess of 25%, the terms and conditions under which such calves are to be reared, including the sharemilker’s remuneration, must be negotiated and recorded in writing and do not form part of the agreed share.
Capital distribution and additional shares
Change to method of payment
If there is a change to the method by which payments are to be calculated and paid by the dairy company to the farm owner, it is the intention of this Agreement that the sharemilker must not be disadvantaged. Therefore, the method by which the sharemilker’s share of income is paid to the sharemilker must be revised by agreement between the parties and if there is no agreement, then by the dispute resolution procedures provided in this Agreement.
Method of payment
|*Select whichever applies.|
Before taking a holiday or time off (or if the sharemilker is unable to perform the sharemilker’s duties because of sickness), the sharemilker must arrange, at the sharemilker’s expense, for a competent person agreed to by the farm owner to perform the sharemilker’s duties during the sharemilker's absence. The farm owner must not unreasonably withhold agreement.
If a farm owner employs a sharemilker with young children and the farm owner requires the partner of the sharemilker to milk the cows, the farm owner must ensure a safe area is provided at the farm dairy if it is necessary to accommodate children at the farm dairy during milking. In these circumstances, the sharemilker should view and approve the safe area before the sharemilker signs this Agreement, and if the sharemilker does not do so, the farm owner must, at the farm owner's cost, provide a safe area or upgrade the safe area to a standard that meets the sharemilker's approval (which must not be unreasonably withheld).
If, after signing this Agreement, the sharemilker becomes responsible for young children and it is necessary to accommodate the children at the farm dairy during milking, then the sharemilker and the farm owner must, in good faith, negotiate to ensure a safe area is provided for the children. If there is a dispute about the provision of a safe area, the dispute must be submitted to conciliation as provided for in clauses 142 to 148.
The farm owner or the farm owner’s agent must retain the management and control of the farm, and all of the farm's operations, and of the management of the herd. All work to be performed on the farm by the sharemilker under this Agreement must be performed in accordance with any reasonable directions and instructions that the farm owner (or the farm owner's agent) may give from time to time. In the absence of any directions or instructions, the sharemilker must perform the work in a manner that conforms with good farm husbandry.
The sharemilker must not, without the previous written consent of the farm owner, plough up any permanent pasture land, or cut down or damage or destroy any trees or hedges, on the farm.
Alterations and improvements
Before the commencement of this Agreement, the farm owner agrees to carry out the alterations and improvements to the house, farm dairy, or other facilities specified in Annex 2. The alterations and improvements must be done promptly.
Feed on hand
The farm owner or the farm owner’s agent and the sharemilker together must, within 10 working days of the commencement of this Agreement, verify and record in writing the amount of pasture cover and supplementary feed on hand. If the parties do not agree, the farm owner must engage a suitably qualified person to carry out a count or measure and that person must issue a certificate recording the count or measure.
If there is insufficient feed available on the land at the commencement of this Agreement for the requirements of the stock during the winter and spring immediately following, the farm owner must, at the farm owner's expense, promptly make good the shortfall. For the farm owner to be liable under this clause, the shortfall as at the commencement of this Agreement must be recorded in writing within 10 working days of the commencement of this Agreement.
Landed cost of bought-in feed
The landed cost of bought-in feed for the stock that is the subject of this Agreement, except in clause 51, and including meal purchased for calves, must be paid by the farm owner unless otherwise specified in the table in clause 106.
If, at the commencement of this Agreement, extra feed input is required over and above that agreed to in Annex 1 (Total C), the cost of bought-in feed (eg, grazing, meal, nitrogen) must be agreed by the parties. The agreed share must be recorded in writing between the parties before purchase.
If, on termination of this Agreement, the supplements, pasture cover, or area closed as specified above are not on hand, the cost of any shortfall must be met by the farm owner or according to the terms and conditions of clauses 98 to 105. No payment is to be made to the sharemilker for feed left in excess of that specified in clauses 54 and 55.
The farm owner must provide an efficient milking plant and cooling system for the milking of the herd (except those accessories that are specifically required to be provided by the sharemilker (see clauses 74 to 76). The sharemilker must have the milking plant, cooling system, and cleaning system checked for efficiency each season by a suitably qualified tester who is appointed and paid by the farm owner. This Agreement gives the sharemilker the authority and responsibility to organise the machine test. The sharemilker must deliver the result of the efficiency check to the farm owner and, until this is done, the farm owner is not liable for any inefficiency in the milking plant.
The sharemilker must, at all times, maintain a minimum standard that is acceptable to the farm owner regarding the operation, cleanliness, and efficiency of yards, milking shed and surrounds, plant, utensils, and appliances used for milking the herd to ensure the highest value for milk supplied. All cleansing materials and cleaning costs are to be supplied and met by the sharemilker at the sharemilker's expense.
The sharemilker must, in accordance with the terms of the supply agreement with the dairy company, follow good farm husbandry, and in particular must—
The farm owner has the right to determine the dairy company or other company to which the milk will be supplied. The farm owner may change supply from one company to another during the course of the season, as long as the sharemilker is not disadvantaged in terms of remuneration. At the commencement of this Agreement, the company to be supplied is [name of company].
Milk and meat contamination insurance
Produce and grading losses
Downgrades or loss of value
In all other cases, including (without limitation) somatic cell count grades, if there is a downgrading or lowering in value of milk or meat supplied, the party responsible for the downgrading or lowering of value must reimburse the other party to the extent of the loss.
Note: The parties to this Agreement must be aware of their responsibilities under the Resource Management Act 1991. The farm owner must obtain and supply to the sharemilker any resource consents that are required.
The sharemilker must operate the effluent disposal system in a proper and skilful manner and in accordance with good practice and the standards set by the local authority. The sharemilker must indemnify the farm owner against any charges or actions arising out of the failure of the sharemilker to operate the system in a proper and skilful manner. The sharemilker must notify the farm owner immediately a deficiency or failure is discovered in the equipment or system. In the event that the sharemilker cannot contact the farm owner, the sharemilker is authorised to fix the fault immediately, at the cost of the farm owner.
Pump or spray effluent disposal systems
The sharemilker must, at the commencement of this Agreement, supply and install new milking plant rubberware and, where necessary during the term of the Agreement, maintain and replace all milking plant belting and rubberware (except pulsator and cooler rubberware) required for the efficient operation of the milking plant according to the manufacturer’s specifications. The sharemilker must leave the rubberware and belting in working order.
The sharemilker must pay for all electricity used by the milking shed and pumps, including the cost for milking machines, water heating, pumping of water, chiller, and effluent pumping.
Machinery, implements, and vehicles
Damage to plant or equipment
Expenses incurred by the farm owner or the sharemilker through damage to plant or equipment (except normal wear and tear) caused by the neglect of, or misuse by, the other party must (at the date the damage is repaired) be paid by the party who caused the damage.
Fuel and lubricants
The owner of the machinery, milking plant, effluent disposal unit, and water pumps must supply the fuel and lubricants for the machinery, plant, unit, and pumps.
If the sharemilker uses a motorbike on the farm, the sharemilker will provide it. All costs, including fuel, oil, and running expenses, must be paid for by the sharemilker and recorded in Annex 1.
If the farm owner requires the herd to be tested, the farm owner must pay all herd testing charges. If extra labour is required for herd testing, the sharemilker must pay for that labour. The sharemilker must co-operate with the tester in the work of herd testing and provide to the tester the records and assistance that the tester may require.
Bulls and artificial insemination
Unless otherwise instructed by the farm owner, the sharemilker is responsible at all times for the total care and husbandry of all stock that is the subject of this Agreement, including the calling of a veterinarian where necessary.
The following methods, materials, and period of administration must be used for the prevention of bloat, facial eczema, grass staggers, and mastitis:
| || ||Method||Material||Period of administration|
| ||Facial eczema||[specify]||[specify]||[specify]|
| ||Grass staggers||[specify]||[specify]||[specify]|
| || ||Method||Cows to be treated||Period of administration|
| ||Mastitis||Teat spray||[specify]||[specify]|
| || ||Dry cow therapy||[specify]||[specify]|
The farm owner must, after consultation with the sharemilker, decide when the cows are to be dried off and the sharemilker must take appropriate steps to dry off the cows. In the absence of this instruction, the sharemilker must seek the authority of the farm owner before the cows are dried off.
Animal health and veterinary expenses
Weeds and pest control
The farm owner must, at the farm owner’s expense, supply the chemicals and other materials required for weed and pest control and eradication and the sharemilker must provide the necessary labour. Subject to clauses 96 and 97, the sharemilker must at appropriate times of the year eradicate all noxious weeds and weeds of economic importance (except capital weeds as defined in clause 96) from the land.
The responsibility of the sharemilker for the control and eradication of capital weeds is confined, as far as is practicable, to the prevention of any increase in capital weed infestation compared with the extent of infestation at the commencement of this Agreement or any subsequently improved position brought about at the farm owner’s expense. If it is considered necessary, the parties may, at the commencement of this Agreement, consult a farm consultant or other acceptable third party to record the extent of capital weed infestation at the specified locations. The cost of any consultation is to be shared in the same proportion as specified in clause 19.
Unless otherwise agreed, the costs incurred in employing contractors for any harvesting, collection, carting, and stacking of surplus feed on the land, including the extra labour and machinery required, must be paid by the farm owner. If the parties agree to share the costs, the share to be paid by the sharemilker must not exceed the agreed share and must be recorded in the table in clause 106 and reflected in costs allocated in Annex 1. For the cost of harvesting maize silage, see clause 101.
Forage crops and maize silage
The growing of green feed or other forage crops on the land is to be determined by the farm owner in consultation with the sharemilker and must be recorded in writing. The farm owner must provide seeds, fertiliser, fencing materials, and any other materials required to carry out this work. If outside contractors are used, the farm owner must meet that cost.
Unless otherwise agreed, in the case of maize grown for silage on the land, the cost of growing and harvesting the crop must be paid by the farm owner. If the parties agree to share the cost, the share to be paid by the sharemilker must not exceed the agreed share recorded in the table in clause 106 and must be reflected in the costs allocated in Annex 1.
Unless otherwise agreed, the costs, including cartage and spreading where a contractor is used, of applying urea to boost seasonal pasture growth on the land, except as provided for in clause 50, must be paid by the farm owner. If the parties agree to share the cost, the share to be paid by the sharemilker must not exceed the agreed share and must be recorded in the table in clause 106 and reflected in costs allocated in Annex 1. If the parties agree that the sharemilker will share the cost of the application of compound nitrogenous fertiliser to boost seasonal pasture growth, the cost to the sharemilker will be determined by calculating the nitrogen content based on the equivalent cost of urea.
Unless otherwise agreed, the landed cost of bought-in supplementary feed for the stock that is the subject of this Agreement, except as provided for in clause 50, including meal purchased for calves, must be met by the farm owner. If the parties agree to share the cost, the share to be paid by the sharemilker must not exceed the agreed share and must be recorded in the table in clause 106 and reflected in costs allocated in Annex 1.
Unless otherwise agreed, the cost including cartage of the grazing off of any stock that is the subject of this Agreement, except as provided for in clause 50, must be paid by the farm owner. If the parties agree to share the cost, the share to be paid by the sharemilker must not exceed the agreed share and must be recorded in the table in clause 106 and reflected in costs allocated in Annex 1. The conditions of grazing off must be recorded in writing before the stock is grazed off.
Freight and droving fees
All costs of cartage incidental to the farming operations (except where otherwise provided for in this Agreement) and all droving fees (except for the droving by the sharemilker or the sharemilker’s employees of the stock that is the subject of this Agreement, to outside grazing) must be paid by the farm owner.
The farm owner must provide a water supply system of sufficient capacity to provide water of acceptable quality for stock, farm dairy, and household purposes. If satisfactory drinking water for domestic use cannot be obtained from other sources, sufficient tank accommodation for the collection of rainwater must be provided at the sharemilker’s house. The cost of purchased water for household purposes must be paid by the farm owner.
The sharemilker is responsible for minor repairs to the water system and regular maintenance of the water pump, and the farm owner must provide the materials, where necessary, for this purpose. Any provision for the historical use of the community water supplied to the land must be recorded in Annex 1.
In the event of a serious interruption to the water supply or the need for major repairs to the supply, the sharemilker must immediately advise the farm owner, who must take prompt steps, at the farm owner’s expense, to remedy the situation. If a shortfall is due to climatic conditions or a serious malfunction of the water supply system outside the sharemilker’s control, the farm owner must meet the cost of imported water.
If water is being used for a purpose for which the sharemilker does not receive a share of the returns, except for use at the farm owner’s house, then all costs associated with the supply of water to such areas must be paid by the farm owner.
If irrigation of pastures is practised, the sharemilker is responsible for shifting the irrigation plant and equipment as required by the farm owner. The sharemilker is responsible for minor repairs and the regular maintenance of the irrigation system, and must provide the farm owner with the materials, if necessary, for that purpose.
The farm owner must provide and maintain in good order and condition suitable accommodation for the sharemilker and the sharemilker’s employees. The sharemilker may make this house available to the farm manager. The accommodation must consist of suitable living room, kitchen, including a stove operating to the manufacturer’s specifications, bedrooms, bathroom, laundry, and flush toilet. The accommodation must include—
On termination of this Agreement, the sharemilker must leave the house, chattels, and surrounds in a clean and tidy condition. If the sharemilker fails to do so, the farm owner is entitled to have the premises cleaned and to deduct the cost of the cleaning from any money due to the sharemilker.
Neither the sharemilker nor the sharemilker’s employees are a tenant of the land or any building. If the sharemilker or the sharemilker’s employees are given notice of early termination of this Agreement, the sharemilker or the sharemilker’s employees have 14 working days to vacate any accommodation provided as part of the contract.
Administration Accident compensation levies
Occupational safety and health
The farm owner and the sharemilker acknowledge that safety in the workplace is a priority to both parties and that both parties will take all practicable measures to ensure safe working conditions and to comply with the Health and Safety in Employment Act 1992. To this end, the parties agree to take all practicable steps to provide a safe working environment, and act in accordance with good practice and relevant standards set by the Department of Labour. If either of the parties brings people onto the farm, that party will be responsible for those person's safety.
If an appropriate authority orders the slaughtering of an in-milk cow, and the slaughtering of the animal does not reduce the herd to below the minimum number specified in clause 42, the farm owner may elect whether or not to replace it with a similar-producing animal.
If slaughtering referred to in clause 126 reduces the herd below the minimum number specified in this Agreement, the farm owner must, at the farm owner’s expense, within 14 working days of the animal leaving the farm, replace it with another similar-producing animal, unless the parties agree in writing that it should not be replaced.
Death of party
If this Agreement is made with a sole sharemilker and the sharemilker dies during the period of this Agreement, the Agreement will terminate as from the date of the sharemilker's death. In this case, the personal representatives of the estate of the sharemilker are entitled under clauses 19 to 29 to all money due to the sharemilker at the time of the sharemilker’s death, including deferred or final payments, but subject to adjustment in respect of any other matters of income or outgoings (or both) arising under this Agreement.
If this Agreement is with a sharemilking partnership and 1 of the partners dies during the period of this Agreement, the remaining partner or partners have the option of terminating this Agreement immediately or at the conclusion of the season, but the farm owner has the prior option of terminating the Agreement within 1 month of the date of death of the sharemilker in the event that the remaining partner or partners cannot continue to the satisfaction of the farm owner.
In either case, the personal representatives of the estate of the deceased sharemilker and the remaining partner or partners are entitled under clauses 19 to 29 to all money due to the partnership at the time of the conclusion of this Agreement, including deferred or final payments up to the date of the conclusion, but subject to adjustment in respect of any other matters of income or outgoings (or both) arising under the terms of this Agreement.
Matters not provided for
If this Agreement is silent on any matter or thing that becomes the subject of dispute between the parties, then that matter or thing must be determined in accordance with the custom prevailing in the district. If there is no custom prevailing in the district, the matter or thing must be determined in accordance with equity and good conscience.
Breach of Agreement
If the sharemilker commits a serious breach of this Agreement, the farm owner may give the sharemilker notice in writing to remedy the breach. If the breach is not rectified within 10 working days, or recurs, the farm owner may terminate this Agreement immediately and the sharemilker is entitled only to money actually due to the sharemilker at the time of termination, but without prejudice to—
Any sharemilker who uses, possesses, or cultivates any illegal substance or who commits an offence against the Misuse of Drugs Act 1975 is to be treated as having committed a serious breach of this Agreement and those actions constitute grounds for immediate termination of this Agreement.
If the farm owner commits a serious breach of this Agreement, the sharemilker may give the farm owner notice in writing to remedy the breach and, if the breach is not rectified within 10 working days or recurs, the sharemilker may terminate the Agreement immediately. If this Agreement is terminated under this clause, the sharemilker is entitled to money actually due to the sharemilker at the time of the termination and subsequent payments on production up to the date of termination. Termination of this Agreement under this clause does not affect the rights of the sharemilker to recover damages for breach of this Agreement, the rights of any other sharemilker, or the farm owner’s right to refer the matter to conciliation under clauses 142 to 148.
No claim by the farm owner against the sharemilker or the sharemilker against the farm owner in any way arising out of this Agreement in relation to operations during any one milking season (whether the Agreement is renewed or not) will be recognised or sustainable, and no action in respect of any claim is enforceable, unless full details of the claim in writing (the notice of dispute) are served by the claimant on the respondent within 20 working days of the claimant becoming aware of the alleged breach of this Agreement, but in any event no later than 20 working days from the end of the season to which the alleged breach relates, time being strictly of the essence.
If a claim is made by either party, a period of 10 working days after the claim has been served is permitted within which to make a counterclaim. No counterclaim will be recognised or sustainable, and no action in respect of any counterclaim will be enforceable, unless adequate details, in writing, of the counterclaim have been served by the respondent on the claimant within that 10-working-day period.
The conciliator must not, unless by consent of the parties, act as arbitrator, witness, counsel, adviser, or representative of any party in any subsequent arbitration or judicial proceedings in respect of any dispute that has been the subject of the conciliation procedure where he or she has been the conciliator.
If a dispute, difference, or question arises between the parties or a party's representative in relation to the construction of this Agreement or in relation to any matter or thing connected with or arising out of this Agreement (a dispute) that cannot be resolved by conciliation under clauses 142 to 148, the dispute must, in the absence of any provision to the contrary, be referred to arbitration with a sole arbitrator in accordance with and subject to the Arbitration Act 1996.
The parties may agree on the arbitrator. If the parties are unable to agree on the arbitrator within 20 working days of the dispute being referred to arbitration, then the arbitrator is to be appointed by the President of the Arbitrators’ and Mediators’ Institute of New Zealand Incorporated (or the President's nominee) in accordance with the Arbitration Act 1996. The arbitrator must not be a person who has participated in any conciliation procedure in respect of the dispute unless by consent of the parties.
If the farm owner withholds more money from the sharemilker than the amount the farm owner is claiming, then, in the absence of extenuating circumstances, the arbitrator must award interest on that money at a rate of 8% per month or part of the month compounding.
If the farm owner withholds only the amount being claimed and the farm owner’s claims are subsequently not awarded in full, then, in the absence of extenuating circumstances, the arbitrator must award interest at a rate of up to 5% per month or part of the month compounding on the excess money withheld.
Public liability insurance
Sale of farm
The farm owner has the right at any time during this Agreement to sell the farm or any part of the farm and, in doing so, to cancel this Agreement. If the farm owner sells the farm or any part of the farm, the sharemilker is entitled to receive from the farm owner the sharemilker’s proportion of the actual, deferred, and final payment unpaid on milk or milksolids produced during the season up to the date on which the cancellation takes effect, together with an amount equal to the sharemilker’s net proportion of the value of the estimated milk or milksolids for the unexpired period of the season, including deferred and final payment. If the farm owner and the sharemilker fail to agree as to the estimated amount of milk or milksolids, the previous 3 years’ average production must be used as the basis for the calculation. The total production in the previous 3 seasons for the month in question must be divided by the number of cows milked during those months in the previous 3 seasons, giving, for the purposes of the calculation, a standard of production per cow.
If the farm owner has not been dairying on the farm during the previous 3 years, the standard of production per cow for the purposes of the calculation is the declared average production per cow supplied during the months that milk was supplied to the farm owner's dairy company from all its suppliers in the previous year. From the sharemilker’s proportion of the estimated gross value of the standard production per cow must be deducted the estimated cost of production per cow by way of labour charges, shed expenses, power costs, and all other charges that are the responsibility of the sharemilker. The difference must then be multiplied by the number of cows milked at the date on which the cancellation takes effect, and the result is the sharemilker’s net proportion of the value of the estimated milk or milksolids for the unexpired period of the season, including deferred and final payments.
Signature and date
Note: Before signing this Agreement, parties should take particular note of clause 16.
Name of farm owner (print):
Signature of farm owner:
Name of witness (print):
Signature of witness:
Occupation of witness:
Address of witness:
Name of sharemilker (print):
Signature of sharemilker:
Name of witness (print):
Signature of witness:
Occupation of witness:
Address of witness: