Michigan Cash Farm Lease for Purpose of Producing Crops, Livestock, and Livestock Products, According to Land Use and Cropping Plan
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Description
Typically, in these arrangements, the landlord will share input costs (including but not limited to seed, fertilizer, fuel) while the tenant provides all of the labor and remaining input costs. Once harvested, proceeds will be divided according to the agreement (normally ranges from 25/75 to 50/50). In this scenario, the farmers both share the risk with the other person and the landlord will typically satisfy the "actively engaged in farming" requirement of federal programs. The downside (or upside - depending on your view) for the tenant is that he/she loses autonomy because the landlord is involved in the decisions of the operation. Sharply different than the cash rent lease, rental income will be subject to self employment taxes and may lower the landlord-farmer's social security check if he/she is retired.
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