Rental Relationships

---

The tenant pays a given amount per acre per year for the use of the land and/or structures. The landowner can put some restriction on the farming practices of the tenant but for the most part the tenant has free rein to manage the farm as he/she sees fit. The tenant then receives all the income from the crop.

The variation of the fixed cash lease follows the actual yield and the price in which it was sold for, with a guaranteed base payment. This allows the landowner to share in lower yields and commodity prices but benefit when the price and production exceeds the expectations of the tenant. 

  In a crop-share lease, the owner receives a portion of the profit from the crop and/or USDA payments. The landowner normally furnishes the land and buildings, as well as occasionally grain set-up. The tenant will supply labor and equipment. Because of the increased asset input from land owner, they receive a higher ratio of profit compared to other rental relationships. Many crop-share leases are a 50/50 split; however, this varies depending on asset investment of landowner.