Resources: Equipment Sharing Coops

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Equipment sharing coops require more trust and flexibility than other coops. Co-owning and managing equipment is often better done in small groups or in subsets of larger coop memberships. One solution is to have equipment be associated with one operator. Sharing equipment is a better use of resources and should cut costs for farmers. It helps to be in the same geographic area to cut down on transport costs. This may be an important tool especially for new farmers building their businesses.

Issues to Discuss:

• Equipment Rates or User Fees
This is based on an analysis of operational costs and may be completed with consultation with a third party, such as a university extension. It could be based on hours or acres, and may vary if types of machinery are different.

• Equipment Depreciation
There are various options for determining depreciation rates. They all have different impacts on taxes and financial reporting of the cooperative.

• Equipment Storage and Transportation
Should the equipment be stored on the members' property or should an alternative location be secured? If stored by members, how should they be reimbursed? How will the equipment be moved from storage to farms?

• Equipment & Operator Insurance
How much and what type of insurance should the equipment and operator have?

• Equipment Maintenance and Repairs
How should maintenance and repairs be charged to members? This may be part of the equipment rates or user fees. Would a no fault program reduce conflict or encourage inappropriate usage?

• Equipment Retirement
When should the equipment be replaced?

• Fuel Purchasing and Storage
How should the cooperative purchase and store fuel for the equipment?

• Source of Labor
Should the members supply labor or should the cooperative hire employees?

• Schedule of Usage
Who has usage priority?

• Rules of Conduct Regarding Usage
What condition should the machinery be in when the user member returns it?

• Operational Downtime
How should this be handled?

Equipment Sharing Coop Resources
Farm Machinery & Labor Sharing Manual
Machinery Management Decision Making Tools Excel spreadsheets