Articles

    Landlord Boot Camp

    How well a non-operating landowner communicates with the renting farmer will go a long way in ensuring a well-informed landowner and a successful farming operation. This was the underlying theme of the “landowner boot camp” conducted by Jennifer Filipiak and Jami Cox at the January 13th Chicago Farmers meeting.

    Ms. Filipiak, executive director of Driftless Area Land Conservancy, and Jami Cox, of AgAware, are members of TCF’s board of directors. Ms. Filipiak and Ms. Cox explained that they drew information from the USDA Agricultural Census and a survey of non-operating (non-farming) landowners conducted by American Farmland Trust (AFT). (The link to the AFT survey is www.farmland.org/noissurvey. The link to the USDA ag census is https://www.nass.usda.gov/AgCensus/)

    The USDA Agricultural Census indicates that 39 percent of U.S. farmland is rented, and in the Midwest, rental rates are higher. In Illinois, 60 percent of farmland is rented. Nationally, 61 percent of land is owned by the person who is farming it; 31 percent of American farmland is owned by non-operators who rent the land to farmers, and eight percent of farmland is owned by farmers who rent the land to other farmers. Ms. Filipiak noted that an operator refers to either a farmer or rancher, while a non-operator owns the farmland, but doesn’t farm it. Through a survey of non-operating landowners in 11 states, AFT found that most of these landowners live near their land. They may own the land for a number of different reasons, including investment, recreational, or family (inheritance) purposes. The AFT survey also showed that most landowners trust the farmers who rent their land to make good decisions about its management and are committed to their renters continuation as a renter of their land.

    Ms. Filipiak pointed out that farmers who rent land to farm often rent from multiple landowners. “The surveys also indicate that 57 percent of the rented acres are rented annually,” said Ms. Filipiak.

    A survey of Illinois, Iowa, and Indiana for agricultural landowners, found that 63 percent of these landowners have experience in farming, but they might not have the confidence in making decisions because farming has changed in recent years.

    Ms. Cox pointed out that verbal leases are common in many parts of the country. Ms. Filipiak noted, “In many areas we found that a written lease sends the message ‘you don’t trust me.’”

    Regarding leases, while they usually renew annually, many are long-term, and can be three to five years in length, with some as long as 15 years, said Ms. Filipiak.

    Ms. Filipiak and Ms. Cox stressed that the landowner’s trust in the farmer is an important factor in the non-operator landowner-renter relationship. In a survey, landowners indicated that other factors that rate high in determining a renter are:

    • The renter is trustworthy
    • The renter cares about the landowner’s land
    • The renter is financially responsible

    Non-operating landowners indicated that they wanted more information on their land’s soil and water quality. They want to be well-informed. The AFT survey indicated that 92 percent of Illinois landowners also said they trusted their operator to initiate good conservation practices. Noted Ms. Cox, “The landowner will likely support the renter in conservation practices they wish to implement.”

    “The survey found that the non-operating landowner loves the land and wants the renter to love it as well,” said Ms. Cox. “The landowner is willing to structure a lease to accommodate a renter’s input. It is important that the landowner and the renter have a conversation that will inform the lease.”

    Ms. Cox and Ms. Filipiak pointed out that landowners can self-educate and learn about their land and farming operations by doing such things as riding in the combine with the farmer to personally see the land and, at the same time, talk with the farmer.

    The women said that landowners should create goals for their land, ask the renter what their goals are, and determine how the two parties can work together to achieve all of the goals.

    Issues that the renter and landowner must agree on include:

    • The length of the lease
    • Is the landowner crop sharing or will it be cash rent
    • What is permitted and what is prohibited on the land, e.g., could hemp be grown on the farm; can the renter tile the land; etc.

    Communication is very important in the relationship. “The landowner and renter have to start the conversation and determine what each one needs,” said Ms. Filipiak. Ms. Cox noted, “The Midwest has productive land and the farmer does not want to ruin the land. Each of the parties has something the other needs – landowners need a farmer, and farmers need land to farm.”

    Ms. Filipiak pointed out, “A lot of the non-operators are not getting the information that the famer is getting. We need to get that information out in more general ways and not just place it in resources that only a farmer would access. We need to market to a broader audience.”

    Written by Denise Faris, Chicago Farmers Editor