With the start of a new year, some landowners and tenants might want to look at their farm leases. Not something most are eager to do, but it does not have to be a difficult process either.
To be clear, there is no perfect lease rate or leasing arrangements. With the variables, consideration has to be made of determining a fair and equitable lease, landlords and tenants should enter any re-negotiation phase with the goal of open conversation and honest discussion about some of those variables. Both parties need to be willing to share information about their role in the operation and the value their role plays in the financial success of the arrangement. Conversations can be difficult, no doubt, but as long as both landlord and tenant are taking the opportunity to share their goals, wants, needs, etc., the agreement can or should become one that is mutually appreciated.
Information abounds on leases. None are perfect. I would suggest you start by reviewing your current agreement. If no written agreement is in place, strongly consider getting something on paper. It just makes things clearer for everyone. Make notes about what needs to be included and updated. Check out sample agreements available either online or through your local Extension Office. Revise them to fit your situation.
You can check out rental rate information and tools as well. The K-State Agricultural Economics Department has an in-depth calculator you can use to evaluate arrangements on its website, www.agmanager.info (check out the “Farm Management” tab, then “Land and Leasing”). They also have publications that can help you sort through the process. Kansas Agricultural Statistics data is also a good resource of information on land values and rental rates based off of survey responses www.nass.usda.gov.
One important publication is titled Kansas Farm Lease Law (C-668), available online at www.agmanager.info or from your local Extension office. It outlines the law of farmland leasing in Kansas, particularly as it applies to oral leases. If you are working on an agreement — new or old — it’s a good one to take a look at.
Fair and equitable is what you are shooting for, not necessarily top dollar rent — which could back-fire if the tenant leaves the land in worse shape than it was. Take some time early this year to make sure your agreements are just that.
Stacy Campbell is the Kansas State Research and Extension agent for Ellis County.