What is a Farm Lease?
If you have farmland for sale or are looking for farms for sale, farm managers, farm operators, or a position in farm management, having the proper farm land lease form that covers the necessary lease terms is essential to ensure smooth land and farm operations and minimize future farm owner and farmer-tenant disputes. In general terms, farm leases are a contract created on farms for sale or farms for rent, allowing a farmer-tenant to possess and conduct farm operations on agricultural property in exchange for rental payments in some form. There are various types of farm lease forms that can be created, such as:
- Cash farm lease - A lump sum or per acre price may be paid by the farmer-tenant. Crop prices or harvest yields are not a factor in the rent. A cash farm lease may include provisions for restrictions on certain uses or crops, or specify that a minimum productivity level be maintained. Typically, the farmer tenant will be responsible for farm management, farm operation, and farm expenses. In a cash rent lease, the farmer-tenant owns the crops.
- Flexible cash lease - In these types of farm agreements, the rent payment can be based upon the price or the yield of the crop, or most commonly, on the revenue produced by the crop. The flexible cash lease is a variation of the cash farm lease. Such agreements in a farm for lease can be used to distribute the risk of loss between the farm owner and tenant.
- Crop share lease - Both the landowner and tenant can agree to rent a farm and share in the crop and harvest proceeds based upon their respective contributions toward crop production. The crop share farm lease can describe in what proportion land owners and farmers will contribute to farm operating expenses and farm maintenance expenses like fertilizer, seed, and farm machinery. A crop-share cash farm lease offers flexible terms for payment of crop-share rent.
- Livestock-share lease - Typically, the owner of a farm to lease provides the farm and buildings and the farmer tenant provides most of the major farm machinery. Livestock and production costs are often equally shared. However, this type of lease form can vary significantly, based on the terms agreed on by the owner of the farm for rent and the farmer-tenant. Livestock facility lease or farm building lease forms may also be created.
- Farm machinery lease form - This type of lease form is often used when a farmer-tenant finds it makes more sense to lease agricultural property equipment than invest in buying new machinery.
- Pasture Lease - A pasture lease is a land lease used for raising livestock and will specify terms such as the number of livestock animals and fencing to be on the pasture. This type of farm land lease may also be used for livestock facility lease or other agricultural property use like wind turbine energy production.
FARM LEASE FAQs
What do you mean by a farm land lease?
A farm land lease is a common type of land lease that exists in places where large extents of farmable land are available. Farm leases are agreements entered upon for farms for sale or farms for rent, allowing a farmer-tenant who does not own adequate agricultural property to cultivate crops and conduct other agricultural operations on another's property. Landowners who own big plots of farmable land often lease their plots to farmer-tenants. If you are an owner with farmland for sale, or are if you are looking to buy/ lease farms for sale or farm for lease, you can use any of the farm land lease forms. In case of a lease, the landowner and the tenant can lay out all agreed terms for easy and smooth running of all land and farm activities and operations, and thus avoid future disputes. A farmland lease can also be used by a farmer-tenant to raise livestock or keep horses in areas where adequate space is not available or affordable.
Are there different kinds of forms for farm leases?
Yes, there are different types of farm leases depending on the terms entered by the owner of the farm for rent and the farmer-tenant. Farmland lease form, cash farm lease form, crop-share cash farm lease form, flexible cash lease form, pasture lease form, farm building lease form, livestock facility lease form, farm machinery lease form and livestock-share lease form are some examples of the different kinds of forms for farm leases. You can use any of the forms based on the facts of your case.
What is the difference between a cash and a flexible cash lease?
A cash farm lease is a lease form in which rent is paid in cash per acre or in a lump sum by the farmer. Usually, the farmer-tenant is chiefly responsible for the day to day running of the farm. All duties from farm management to farm operations, including all farm expenses, fall in his domain of responsibility. The prices of the crop or the yield at the time of harvest are not an influencing factor in the payment of the cash rent.
A variation of the cash farm lease is the flexible cash lease. Here the rent payment is based upon the proceeds from the harvest. A flexible cash lease facilitates, between the landowner and the farmer-tenant, an equitable distribution of the risk of loss. In a cash farm lease, the farmer-tenant retains ownership of the crops. A cash farm lease may lay out provisions restricting certain uses, or stipulating the maintenance of a minimum production.
What do you mean by a pasture Lease?
Generally, a pasture lease is a form of a land lease used for raising livestock. This type of a lease lay out terms with regard to the number of animals being raised, maintenance of fencing on the pasture, and a rental rate agreeable to both parties. This lease form can also be used for creating a livestock facility lease or in the production of wind turbine energy.
Is crop share leasing a beneficial form of farmland use?
A crop share lease is a form of lease between a farm owner and a farmer tenant, in which a farmer-tenant agrees to rent a farm from a landowner. He also has to agree to share the proceeds from the harvested crop. The crop-share will be based upon their individual contributions towards the production of the crop. A crop share farm lease lays out the terms regarding the share which the landowner and farmer will have in terms of the contribution towards farm operations and expenses toward farm maintenance. These expenses may include the cost of farm machinery and equipment, seed and fertilizer. Also, the risk of loss and expenses for cultivation are shared in a crop share lease. A crop share lease can also be a crop-share cash farm lease that allows for flexibility in the payment terms of crop- share rent.
What are the features of a livestock-share lease?
A livestock-share lease is an arrangement where usually the farm and buildings are provided by the owner of a farm to lease while the farmer- tenant brings in the main farm machinery. Production and livestock costs may be shared equally. Livestock-share leases may vary extensively, based on the requirements and terms of agreement between the farmer- tenant and the owner of the farms for rent.
When is a farm machinery lease required?
A farm machinery lease is usually entered into when it is more economical and cost-effective for a farmer-tenant if he leases agricultural property equipment rather than him investing capital in the purchase of new machinery. The machinery may be used in exchange for a rent in any form.