Managed Agarwood Farm Agreement

Below is a clean, professional draft of Managed Farm Agreement and Profit-Sharing Agreement specifically designed for a Smart Agarwood Farm Estate.
This is investor-facing, LGU-presentable, and lawyer-ready (i.e., can be refined by counsel without restructuring).

I’ve written this in plain but formal contract language, suitable for Philippine jurisdiction and international investors.

🌱 MANAGED AGARWOOD FARM AGREEMENT

(Smart Estate Model)

This Managed Farm Agreement (“Agreement”) is entered into on ____________, by and between:

ESTATE OPERATOR:
[Company Name], a corporation duly registered under the laws of the Republic of the Philippines, with principal office at ______________________ (“Operator”);

AND

LANDOWNER / INVESTOR:
[Name], of legal age, with address at ______________________ (“Owner”).

The Operator and Owner are collectively referred to as the “Parties.”

1. PURPOSE OF THE AGREEMENT

The Owner engages the Operator to professionally manage, cultivate, inoculate, harvest, and commercialize agarwood (Aquilaria spp.) planted on the Owner’s farm lot or allocated trees within the Smart Agarwood Farm Estate (“Estate”).

2. SCOPE OF MANAGEMENT SERVICES

The Operator shall provide the following services:

2.1 Plantation Establishment & Maintenance

  • Land preparation and layout
  • Planting of agarwood trees
  • Fertilization, irrigation, and pest management
  • Agroforestry and soil health management

2.2 Smart Farming & Monitoring

  • Deployment of IoT sensors and farm data systems
  • Tree tagging (QR/RFID) and digital records
  • Periodic growth, health, and resin development monitoring

2.3 Inoculation & Resin Induction

  • Controlled agarwood inoculation following approved protocols
  • Inoculation records logged per tree
  • Resin assessment and maturity tracking

2.4 Harvesting & Post-Harvest Handling

  • Selective harvesting (non-clear cut)
  • Sorting, grading, drying, and storage
  • Coordination with processing facilities

2.5 Compliance & Documentation

  • DENR and CITES traceability records
  • Farm logs and harvest documentation
  • ESG, sustainability, and carbon reporting (if applicable)

3. OWNERSHIP OF LAND AND TREES

3.1 The Owner retains full ownership of:

  • The land (if titled lot)
  • The agarwood trees and resulting products

3.2 The Operator acts solely as manager and commercial facilitator, unless otherwise agreed in writing.

4. TERM OF AGREEMENT

4.1 This Agreement shall have an initial term of ____ (e.g., 15–25) years, renewable by mutual agreement.

4.2 Early termination shall be subject to Section 11 (Termination).

5. MANAGEMENT FEES

The Owner agrees to pay the Operator:

☐ Annual Fixed Management Fee: PHP __________ / hectare / year
OR
☐ Deferred Fee Model: Fees deducted from harvest proceeds prior to profit sharing

(Select and specify applicable model)

6. REPORTING & TRANSPARENCY

The Operator shall provide:

  • Annual plantation status reports
  • Dashboard access (where applicable)
  • Pre-harvest yield and revenue projections
  • Post-harvest financial statements

7. INSURANCE & RISK

7.1 The Operator shall exercise best agricultural practices but does not guarantee biological outcomes.

7.2 Risks include climate events, disease, market volatility, and regulatory changes.

7.3 Insurance coverage may be obtained where feasible, subject to cost-sharing agreement.

8. CONFIDENTIALITY

All proprietary methods, data, and protocols shall remain confidential unless disclosure is required by law.

9. NON-ASSIGNMENT

The Owner may not assign rights under this Agreement without written consent of the Operator.

10. GOVERNING LAW

This Agreement shall be governed by the laws of the Republic of the Philippines.

11. TERMINATION

This Agreement may be terminated:

  • By mutual consent
  • For material breach with 90-day cure period
  • For force majeure exceeding 12 months

12. DISPUTE RESOLUTION

Disputes shall first be resolved through amicable settlement, failing which arbitration may be pursued.

IN WITNESS WHEREOF, the Parties have signed this Agreement.

💰 PROFIT-SHARING AGREEMENT

(Agarwood Harvest & Commercialization)

This Profit-Sharing Agreement (“PSA”) forms an integral part of the Managed Farm Agreement.

1. HARVEST PROCEEDS DEFINITION

“Gross Proceeds” shall mean total revenue generated from the sale of:

  • Agarwood chips
  • Agarwood oil
  • Processed or semi-processed agarwood products

2. DEDUCTIONS PRIOR TO SHARING

The following shall be deducted from Gross Proceeds:

  • Harvesting & processing costs
  • Regulatory fees and compliance costs
  • Marketing and logistics expenses
  • Outstanding management fees (if deferred)

3. NET PROFIT SHARING

After deductions, Net Profits shall be distributed as follows:

PartyShare
Owner / Investor___ %
Estate Operator___ %

(Typical ranges: 60/40 or 70/30 in favor of Owner)

4. PAYMENT SCHEDULE

  • Profit distribution within 30–60 days after product sale
  • Payment via bank transfer
  • Accompanied by financial statement

5. VALUE-ADDED PRODUCTS

If agarwood is processed into oil, perfumes, or branded products, profit sharing may be:

  • Recalculated under a separate manufacturing agreement; or
  • Adjusted upward to reflect higher value creation

6. CARBON & ESG CREDITS (OPTIONAL)

Carbon credits, biodiversity credits, or ESG incentives derived from the Estate shall be shared as follows:

Credit TypeOwnerOperator
Carbon Credits___ %___ %
ESG Incentives___ %___ %

7. AUDIT RIGHTS

The Owner shall have the right to:

  • Review harvest and sales records
  • Request third-party audit at Owner’s cost

8. FORCE MAJEURE

Neither Party shall be liable for failure to perform due to events beyond reasonable control.

9. AMENDMENTS

This Agreement may be amended only in writing and signed by both Parties.

10. EFFECTIVITY

This Agreement takes effect upon signing and remains valid for the duration of the Managed Farm Agreement.

🔑 KEY STRENGTHS OF THIS STRUCTURE

✔ Investor trust & transparency
✔ Operator incentive alignment
✔ Long-term estate stability
✔ Clear compliance pathway
✔ Scalable for hundreds of investors

NEXT OPTIONS (I can draft next):

  1. Foreign Investor / JV Version
  2. Fractional Tree Ownership Agreement
  3. Adopt-a-Tree Retail Contract
  4. Estate Rules & Governance Charter
  5. LGU/DENR-Endorsable Contract Version
  6. Smart Dashboard Data Rights Clause

Tell me which one you want next, and I’ll draft it immediately.