When Martin Mogensen takes his dinner with his wife Wanja and their three children in the stately farmhouse of the old gentleman farm Lillerup north of Horsens, he can literally take ownership of what he sees. And when his eyes contemplate the large and luxuriant wheat field growing behind the farm, he is looking at his own land, and it is he who is responsible for farming the field. But the crop doesn’t actually belong to him.
The wheat and all the other crops that grow on the 156 hectares of arable land on Lillerup belong to GoGris I/S, a partnership that Martin Mogensen and four other farmers, each with their own freehold, formed on January 1, 2008. This was two years after he had purchased Lillerup at market conditions.
The basis of the agreement between the five owners of Go-Gris is that they each continue to own their own land and buildings, while the partnership owns the agricultural machinery, the extensive swine herd and all stocks of grain and other crops, fertilizer etc. The five farmers hold an equal share in the partnership, which is responsible for all operation of the pens as well as the farmed land and then pays the owners a farm rent for the land. In this way, Martin has become a tenant-farmer of its own land as well as co-tenant-farmer of the more than 500 hectares that belong to the four others in the partnership.
Full-line production with 1,000 sows
All in all, Go-Gris has 670 hectares, which are primarily used to grow feed for the swine herd consisting of 1,000 sows, piglets and pigs for slaughter. The entire thing consists of eight buildings, where swine occupy seven of them. “Because of the partnership we have a much larger turnover and stronger financial clout, than we could have had on our own,” explains Martin.
But because of the partnership, he is now a full-time farmer, busy working as operational field manager of all the properties, as well as 30 acres of forest land plus being responsible for all exterior maintenance.
It is worth its weight in gold to include the know-how of our parent’s generation.
Similarly, the others in the partnership have their areas of responsibility, depending on what has their special interest. One of them is his brother Mads Bie Mogensen, who is responsible for piglets and pigs for slaughter as well as milling. A third is Jonas Würtz Midtgård, Martin’s close friend ever since they met at Bygholm Agricultural College. Jonas is responsible for keeping the sows. The remaining two are Martin’s and Mads’ father Poul-Erik Mogensen and his brother Hans-Jørgen Mogensen. Hans-Jørgen does the accounts while Poul-Erik lends a helping hand when there is a need for it.
“My father and uncle have reduced their work load. They want the right to work, but not the obligation,” says Martin with a smile. The two senior co-owners are full members of the partnership and participate along with the three young ones in the monthly Go-Gris meeting where all major decisions are taken. “It is worth its weight in gold to include the know-how of our parent’s generation”, thinks Martin. In addition to the owners, there are nine permanent employees of Go-Gris.
Yield in a normal year
- Wheat: 9,0 tons/hectare
- Rye: 7,8 tons/hectare
- Spring barley: 6,2 tons/hectare
- Rape: 4,5 tons/hectare
Growth in the number of I/S partnerships
According to Statistics Denmark, the number of single-ownership farms fell by almost 14,000 from 2006 to 2016, while the number of partnerships increased by more than 1,000 in the same period. Other forms of company ownership grew by nearly 1,100. I/S partnerships and other types of company formation are particularly widespread among large farms. Poul-Erik Mogensen thinks it’s great to have gone from being a freehold farmer to becoming part of a community.
“This is really good, because we are now five to exchange ideas with each other. Until we founded Go-Gris, I ran my own farm by myself. My brother also had a farm near by, and we shared machinery and bandied ideas about with each other and that was good too. But it is even better to be five as opposed to two when it comes to exchanging ideas,” he thinks. Examples are often seen of partnerships created as a framework to manage succession, where it doesn’t work out the way it was intended to and where the parties separate. “I think that it goes wrong sometimes, because seniors hang onto the idea that it’s probably for the best that they make the decisions. But I am fine with pushing decisions over to the young guys,” says Poul-Erik.
Of course the decision-making process takes a bit longer when you are several people doing it. On the other hand, decisions will be more balanced when you have to present them to the others first.
His son Martin also doesn’t miss the freedom to decide everything for himself that he would have had as a freehold owner. “Of course the decision-making process surrounding major decisions takes a bit longer when you are several people doing it. I can’t just decide for myself that I’ll go out and buy a new combine. On the other hand, decisions will be more balanced when you have to present them to the others first. There won’t be very many ill-advised decisions. And I am in charge of field operation on a daily basis. For example, the others don’t butt into how I do the field plan. And I don’t butt into how they do the day-to-day running of the pens when I am in there helping out.
The totality is most important
If Martin had been an independent feed grower, he would probably have gone for more high-value crops in his field plan. But because it is the pigs that must generate the money for Go-Gris, it is his first priority to deliver cheap feed grain to the pens. On the other hand he is also careful not to exhaust the soil with one-sided crop rotation focused only on grain. That is why something between one quarter and one fifth of the total area is seeded with cash crops such as – seed grass, rape and spinach. “Maybe we could be self-sufficient in feed grain in a few years, but at some point it would go wrong in the field. So I would rather take in some other crops that we can sell for a good price, and then use the money to buy some grain from our neighbors,” he explains.
Confidence is absolutely crucial
If others want to create a similar I/S partnership, it is absolutely crucial that preparations are thorough and done with the right people, is the advice of Go-Gris. “We spent all of 2007 getting all agreements and formalities in place and at the same time we made sure that we could work together. We had a great many talks and we got a head-hunting company to create personal profiles on us. Fortunately they confirmed that we complement each other very well,” says Martin. Poul Erik notes: “The most important thing is that we can rely on the fact that what the others do is for the partnership and not for their own benefit. Confidence is absolutely crucial”.