Tenant farmers and landowners can learn more about different types of farmland leases in the free Purdue University workshop "Farmland Leases 101" on Nov. 17 at the Hancock County Fairgrounds in Greenfield.
Presenter of the 6:30-8:30 p.m. workshop is Michael Langemeier, associate director of the Purdue Center for Commercial Agriculture.
"With market conditions changing so rapidly, it is very important for both parties in a farm lease arrangement to understand what should be included in a good lease agreement," Langemeier said. "The goal of the negotiating process should be to come up with an arrangement that meets the needs of both the tenant and the landowner."
Langemeier said there is no one-size-fits-all model for farmland leases, meaning that lease agreements can often be tailored to individual circumstances.
In a cash-rent agreement, the tenant pays a specified amount at specified times, similar to a residential lease or rental. This is the most secure option for the landowner, but it also offers the lowest return.
In a share-lease arrangement, the landowner and tenant agree to split the proceeds of the farm business. This type of arrangement is often better for tenants because it can help reduce the burden of high lease payments in a bad crop year.
Langemeier said a third type of lease agreement is gaining popularity. In a flexible cash-lease, the tenant typically makes a base payment with a bonus to the landowner in good crop years.
"Regardless of the type of lease agreement, it is important for both tenants and landowners to be proactive in their relationship," Langemeier said. "They should recognize the value of a positive, trusting, long-term relationship between neighbors, and they should avoid the temptation to put that relationship at risk by trying to save or gain a few extra dollars."
The workshop will include a comparison of the different types of leases, as well as a brief review of trends in cash rents and land values.
Registration is required. For more information, contact Roy Ballard, Purdue Extension educator, at firstname.lastname@example.org or call 317-462-1113.
The workshop will be in the Exhibit Hall of the fairgrounds, 620 N. Apple St.
Langemeier encourages anyone interested in attending the workshop to visit the website Ag Lease 101, which was developed by the North Central Farm Management Extension Committee. The site is designed for educators, farmers and agribusiness professionals and offers detailed information on leasing and cash-rental arrangements for farmland, buildings, equipment and livestock, as well as sample lease agreements and blank lease forms.
George Patrick, professor of agricultural economics at Purdue, is a member of the team of agricultural educators and practitioners who designed and maintain the site.