Throughout the year, I receive calls from producers and landowners about a fair rent for the country that is in possession or what is rented. The commonality of these appeals is that they either want to get a fair rent or pay a fair rent. In this article, I will discuss cultural action leases. Unlike contract farming, equity agreements do not provide guaranteed payments, regardless of commercial performance. This means that both sides can prosper in times of prosperity and share losses in the poorest times. Similarly, the farmer pays his share of crop insurance and inputs increasing yields. In addition, tenants pay for the total maintenance of irrigation facilities, work, land use, harvesting and transporting the crop to a given location (bin, elevator or sales barn). To overcome this situation, farmers have explored alternatives to effectively generate profits. Common agriculture is one of the most common alternative diets. A lease of plant shares may be okay for a farmer by sharing the fruits of her labour in exchange for increased protection against economic and weather factors beyond her control. Compared to cash leases, the farmer needs less working capital under a harvest share lease, as the lessor participates in these costs. A farmer who uses a lease with a crop share must maintain a shared expenditure count and be able to articulate realistic production targets for the owner.
Share Farming did not commit to a single solution, and Mr. Henderson made fun of some of the people he spent on the street during his months promoting common agriculture in the 1980s and 1990s. The reasons why equity agriculture never started after its first introduction more than 30 years ago have never been very clear, but the importance of contract farming has probably stifled its development. In 2009, I left the farm under contract and I had the opportunity to conclude a joint agriculture with my parents. As common agriculture can be very specific, you will need more than a standard model if you want to set everything up. Each company remains legally separate, with performance and costs divided by the report agreed in the agreement. They rely on each other`s mutual success and therefore participate in what their partner does. Sure, it`s a risk, but you have to be willing to try it and try new things.
We really do not see any disadvantage to our agreement. Participation, also known as profit sharing, allows a farmer to operate a farm business without providing the initial capital needed to own arable land. Most of the time, a landowner (with land and fixed equipment) enters into a joint farmer`s contract with another farmer (with work and machinery). The model is the most popular in the dairy sector and includes different risk and benefit allocations between the farmer and the landowner. In an agreement on the shares, the landowner actually “leases” part of his land to another farmer.
