Cash Farm Lease with Provisions for Improving, Conserving and Maintaining Farm

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Multi-State
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US-0962BG
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Description

Some farm owners have switched from the traditional crop-share lease to a cash lease. Instead of receiving a share of the crop, they are paid cash. Reasons for switching from a crop-share lease to a cash lease may include a desire for less involvement in the farm operation on the part of the owner and simplified farm record keeping for the operator. Cash leases are one of several options that owners and operators should examine before judging which lease form is best.
Under a typical cash lease, the operator will receive all crop income, make all management decisions and pay all crop expenses. The owner will pay land taxes, his/her own insurance and major building repairs. For this, the owner receives a known, stable income and is freed from farm management responsibilities.

A Cash Farm Lease with Provisions for Improving, Conserving and Maintaining Farm is a type of agricultural lease agreement in which the landlord grants the tenant the right to use the farmland for agricultural activities in exchange for a cash payment. The tenant is also responsible for maintaining, improving, and conserving the land. The provisions of this type of lease may include specific obligations to improve and maintain the land, such as installing fencing, dredging, or planting cover crops. Other provisions may include conservation practices such as soil erosion control or water management. Different types of Cash Farm Lease with Provisions for Improving, Conserving and Maintaining Farm include fixed cash leases, share leases, and hybrid leases. In a fixed cash lease, the tenant pays a fixed amount of money for the use of the land. In a share lease, the tenant pays a share of the crop produced on the farm to the landlord. In a hybrid lease, the tenant pays a combination of cash and crop share.

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FAQ

Farm shares connect local farmers directly with consumers, which helps develop a regional food supply and strong local economy. Farm shares also cut out the middleman, which lowers costs for consumers and provides better income for farmers.

Crop share A common share agreement would be 25% to landowner and 75% to tenant of the harvested grain crop when the landowner does not share in any production costs.

Tenant farmers usually received between two-thirds and three-quarters of the harvest, minus deductions for living expenses. Sharecroppers, however, received only half the crop, from which landowners deducted rent and any credit (with interest) for supplies provided for the family's subsistence.

The lessee is the temporary occupant of the property, and the lessor owns the property in which the lessee is staying. Who Holds the Lease of the Property? The lessor, or landlord, holds the lease of the property.

Crop-share arrangements refer to a method of leasing crop land where the production (crop) is shared between the landowner and the operator. Other income items, such as government payments and crop residue, are also often shared as are some of the production expenses.

The traditional share arrangement for a grain crop like corn or wheat is one-third to the landowner and two-thirds to the tenant. Usually, the expenses paid, and crop received, are equal to the share ? i.e. the landowner would pay one-third of the expenses and receive one-third of the crop.

More info

IMPROVING, CONSERVING, AND MAINTAINING THE FARM. Improving Your Farm Lease Contract program on the farm unit, and receives all the crop and any associated USDA commodity program payments.Under a fixed cash lease the tenant pays a given amount of cash rent per acre per year for the use of the farm resources. Note: This chapter is adapted from "Fixed and Flexible Cash Rental Arrangements for your Farm," North Central Farm Management Extension Committee Publication. This form can provide the landlord and tenant with a guide for developing an agreement to fit their individual situation. This can be accomplished through the provisions of your farm lease agreement. Provisions of your farm lease agreement. While placing certain limits and requirements on how your tenant farms the land provides valuable protection,. Leasing of Agricultural Real Estate; What Is a Lease? To use this lease form: Complete two identical copies – one for the Lessor (Landowner) and one for the Lessee (Tenant).

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Cash Farm Lease with Provisions for Improving, Conserving and Maintaining Farm