The Importance of Establishing Your Priorities
Farm leases come in a variety of forms. This is because there are a variety of landowners and tenants, all with different concerns and motivations when entering a lease. Stewardship of the land and the sustainability of the farm operation are often important concerns for landowners, but are by no means the only concerns. Landowners also have to consider their finances, estate planning, tax issues, social and family concerns, as well as personal preferences such as, perhaps, enjoying retirement.
It’s also important to recognize that not all landowners have the same values. Some may merely want to ensure compliance with an NRCS conservation plan or simply to maintain eligibility for future government programs, while others may have specific concerns regarding water quality or assisting new farmers. Fortunately, there are a variety of lease mechanisms available to match the variety of landowner concerns, while still promoting sustainable farm practices.
Before examining the different ways sustainability can be promoted in a lease arrangement it is first necessary to determine what your essential priorities are and where you have room for flexibility in negotiating the lease contract. This will help enable you to develop a lease that is suitable to you and your tenant while promoting the adoption of sustainable practices. After all, a lease can only promote sustainability for as long as it is in effect. A lease containing numerous ways to encourage your tenant to adopt sustainable practices and conservation clauses covering every aspect of good stewardship is not sustainable if your essential needs are not met.
You might also need to recognize that while creative solutions to certain constraints are available, circumstances may initially limit your ability to achieve the level of stewardship you desire or to address other sustainable issues, such as leasing to a beginning farmer. However, immediate roadblocks should not discourage the adoption of lease provisions that support gradual steps toward a truly sustainable farm operation. It may be encouraging and more effective to think of sustainability as a process rather than an end result. Determining your priorities can help you understand your own limits, which then allows the development of a lease that begins the process of sustainable farming.
In short, determining your priorities will effect the type of lease you will enter. It’s important to establish the priority of certain factors to properly analyze the type of lease and important clauses you should consider and to determine where you have room for flexibility.
Questions to ask yourself
These questions are meant as examples of some issues you might consider. Your particular situation could require other considerations. If reading this guide through the Sustainable Farm Lease website you can view additional information on the specific topic by clicking the links in the answers. You can also download this as a separate document to print and fill out.
What are your long-term plans for the property?
- Transfer to family?
- Agricultural or Conservation easement?
What are the characteristics of the property?
- Highly erodible land (HEL)?
- Karst Topography?
- Wildlife Habitat?
- Is a house located on the property?
Do you have room for flexibility regarding rental income?
- Can you afford to reduce the rent?
- Can you afford to share certain expenses?
- Can you share any of the risk (and reward)?
- No, I rely on rental payments as my primary income.
Do you have the time, experience, or desire to participate in the management aspects of the farm operation, and if so, what aspects of the operation are you interested in?
- Operational decision-making?
- Organic certification?
- Participation in federal farm programs?
Do you have specialized equipment the farm operator can use?
Can you provide secure land tenure, or a long-term lease?
What particular concerns do you have regarding the sustainability of your farmland? (Again, the answers here are by no means an exhaustive list.)
- Soil conservation
- Improving water quality
- Floodplain management
- Mitigating climate change
- Integrating livestock
- Rejuvenating neglected land
- Woodlot management
- Increasing biodiversity
- Wildlife habitat
- Encouraging integrated pest management
- Existing leases?
- Zoning restrictions?
Is an agricultural lease the right choice for you?
- This will largely depend on the answers to several of the questions above. For instance, if you are not dependent on income from leasing the property, place a high value on wildlife or other conservation concerns, wish to retain rights for private recreation, and the land is not well-situated for agricultural production you might find a conservation easement more appealing.
- Conservation easement?
- Custom farming?
After examining your own priorities it is time to talk to the tenant. Remember, setting priorities to discuss with the tenant rather than deciding on a rigid plan is more likely to result in a win/win situation and a longer, more sustainable tenancy.