Farm Lease Management

Mar 27, 2024 | Ag Business Management

Out of curiosity, I asked the ag folks on X/Twitter the number of landlord relationships they had to manage. Here are the poll results:

With over 1,700 votes, most were in the 1-5 range. But the surprising thing to me was how many producers fell into the 10+ category. (The most I saw in the comments was someone with 55 landlords) That’s a lot of landlord relationships to manage. With that comes some risk factors…

Poor farm lease management carries significant risks that can adversely affect the operational stability and financial health of a farming operation. These issues not only jeopardize the immediate farming activities but also the long-term opportunities and sustainability of the farm business.

1. Missed Payments: Can strain relationships and lead to legal disputes or loss of the lease, disrupting farming operations.

2. Poor Landlord-Tenant Communication: May result in misunderstandings and missed opportunities for expansion or renewal of lease terms.

3. Death of Landlord Without Succession Plan: Leaves the lease in jeopardy, potentially leading to disputes with heirs and loss of access to the land.

4. Errors in Flex or Share Crop Lease Calculations: Can cause financial discrepancies, leading to overpayment or underpayment, and strain relationships.

5. Insurance and Liability Confusion: Without explicit terms, there’s risk of inadequate insurance coverage and unclear liability for accidents, leading to potential financial losses.

6. Lack of Investment in Property Improvements: Can result in soil degradation, reduced property value, and lower productivity due to uncertainty over long-term tenure.

7. Inflexibility to Market Changes: A rigid lease may prevent adaptation to market shifts or new technologies, putting the farming operation at a competitive disadvantage.

8. Succession and Transition Challenges: Poorly managed leases can complicate planning for retirement or the inclusion of new family members, threatening the farm’s future.

Each of these risk factors underscores the importance of careful lease agreement drafting, open lines of communication, and proactive management of the lease relationship.

But how do you efficiently manage those relationships?

I recently came across a new solution available to producers. It’s called Oaken and it’s a digital platform to organize all these moving pieces. I had a chance to speak with the Founder/CEO and it looks like a great tool to get these lease details stored in your head or in a file folder into an easily accessible location.

If you’d be interested in more info, I can get you in contact with the folks at Oaken. Just let me know by emailing info@braintrustag.com.

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