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"Leases of irrigated land have ranged from $1200 to $1600 per hectare plus irrigation pumping costs and water charges," Banks said.
Over the last 20 years, farmland rental rates per acre in tennessee have risen from an average of $56 per acre in 1996 to $102 per acre in 2019. This represents an increase of $46 over this time period with an average implied capitalization rate of 2.6%.
A lease is a contract outlining the terms under which one party agrees to rent an assetin this case, propertyowned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange.
Statewide Farmland Cash Rent Cropland averaged $66.5 per acre in Alabama, down 2 percent from 2020. Irrigated cropland had a rental rate of $120 per acre, a decrease of $15 from 2020, while non-irrigated cropland received a rate of $64 per acre, which follows six years of rates at $22 or $23.
A farm lease is a written agreement between a landowner and a tenant farmer. Through a farm lease, the landowner grants the tenant farmer the right to use the farm property. Key terms of basic leases include the length of the lease, rent amounts and frequency of payment, how to renew or end the lease, and more.
Cash rent for pasture is unchanged at $12.50 per acre. In Alabama, cash rent for cropland averaged $61.50 per acre, an increase of $3.50 from last year.
But leasing could be used much more and the supply of land for leasing could rise with better agreements between the landowner and lessee. More equitable agreements are expected to deliver greater stability and hence sustainability in leasing as a farm business model, he says.
Over the last 20 years, the price of farmland per acre in alabama has risen by an average of 4.8% per year to $3,500 per acre as of 2019. This represents an increase of $2,050 per acre of farmland over this time period.