The Farm Management Agreement serves as a crucial legal framework for agricultural operations in Indonesia, where professional management of farming assets is becoming increasingly important. This document is typically used when farm owners wish to delegate the operational management of their agricultural property to professional managers or management companies while retaining ownership. It addresses key aspects required under Indonesian law, including sustainable land use practices, labor management, and environmental compliance. The agreement is structured to comply with Indonesian agricultural regulations, particularly Law No. 41 of 2009 on Protection of Sustainable Agricultural Land and related statutes. It includes detailed provisions for operational management, financial arrangements, reporting requirements, and risk allocation, making it suitable for various agricultural operations from small farms to large plantations.
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1. Parties: Identification of the farm owner and the farm management company/manager
2. Background: Context of the agreement, including brief description of the farm and purpose of the management arrangement
3. Definitions: Definitions of key terms used throughout the agreement
4. Scope of Services: Detailed description of farm management services to be provided
5. Term and Renewal: Duration of the agreement and conditions for renewal
6. Management Responsibilities: Specific duties and responsibilities of the farm manager
7. Owner's Obligations: Responsibilities and obligations of the farm owner
8. Financial Terms: Management fees, payment terms, and financial reporting requirements
9. Operating Budget and Expenses: Process for budget approval and expense management
10. Labor Management: Requirements for hiring, supervising, and managing farm workers
11. Compliance Requirements: Obligations to comply with relevant laws and regulations
12. Reporting and Records: Requirements for maintaining records and providing reports
13. Insurance and Liability: Insurance requirements and allocation of risks
14. Termination: Grounds and process for termination of the agreement
15. Dispute Resolution: Process for resolving disputes between parties
16. General Provisions: Standard legal provisions including notices, amendments, and governing law
1. Environmental Management: Specific environmental obligations and sustainable farming practices - include when the farm requires specific environmental management
2. Crop Selection and Planning: Details on crop selection and rotation - include for farms with variable crop patterns
3. Marketing and Sales: Responsibilities for marketing and selling farm produce - include if manager has sales responsibilities
4. Equipment and Machinery: Management of farm equipment and machinery - include when significant equipment is involved
5. Irrigation Management: Specific provisions for irrigation system management - include for farms requiring irrigation
6. Intellectual Property: Protection of farming methods or proprietary techniques - include when unique farming methods are used
7. Force Majeure: Provisions for natural disasters or unexpected events - include in areas prone to natural disasters
1. Schedule 1: Property Description: Detailed description of the farm property, including maps and boundaries
2. Schedule 2: Management Services: Detailed list of management services and performance standards
3. Schedule 3: Fee Structure: Detailed breakdown of management fees and payment calculations
4. Schedule 4: Operating Budget: Initial operating budget and budget preparation guidelines
5. Schedule 5: Equipment Inventory: List of equipment and machinery included in the management scope
6. Schedule 6: Reporting Templates: Templates for required operational and financial reports
7. Schedule 7: Key Personnel: Details of key management personnel and their qualifications
8. Appendix A: Compliance Checklist: Checklist of relevant regulatory requirements and compliance measures
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