MSU Extension offers a land Rent Calculator to help producers compare the impact of land rents with their farm`s net farm income. By inserting estimated revenues and expenses, a producer can determine whether the base rent payable is reasonable or whether the base tenancy agreement should be discussed or even renegotiated. This tool is available on the MSU Extension Farm Management website. Information on average rental prices in your county can be found in the following report, based on survey data from the USDA`s National Agricultural Statistics Service for Michigan County. A copy of this whole series can be accessed in the fact sheet format at the following web address. The share of the crop is considered a flexible land use contract, in which the landowner and tenant distribute the income of the crops on the farm in a predetermined ratio or percentage. A joint equity agreement would be 25% for the landowner and 75% for the tenant of the harvested grain crop if the landowner did not contribute to the production costs. In some cases, a 1/3 is used for the landowner and 2/3 for the lessor, but in this case, the landowner would pay for crop production for 1/3 of the costs of seeds, fertilizers and chemicals. Since entrance and overhead fees have increased over the past 10 years, tenants can no longer afford the historic shares, 1/3 to the landowner with 2/3 to the tenant without participating in the costs. This difference is different from the fixed cash lease by the fact that the price paid to the landowner is based on income and not on a fixed amount. The dollar is influenced by crop yields and prices. If yields and prices go up, the rent will go up, and vice versa.
Over the years, producers have leased farmland, also known as swapping ground, for a variety of reasons that use a wide range of types of agreements. The nature of the agreement generally has a lot to do with how a landowner wants to participate in plant production on his territory. Some landowners do not want a production or market risk or participate in production decisions. Some want to own part of the crop. Some might want to be able to market their share of the crop. There is great flexibility in agreements based on what corresponds to the needs of the landowner and the needs of the tenant. Here is a basic summary of land leases. Here is an example of land rental designed by lawyers and designed free of charge for download, change and use.
By accessing or downloading this lease, you recognize and accept that Farm – Food Care Ontario is not liable for any damage resulting from your access or use of the framework lease. Use the computer to discuss tenant values with landlords so they can be better informed about the issues on their land and the potential impact on production and profitability of the operation.