Farm tenants: Build relationships in business and life

LONDON, Ohio – Ohio farmers keep several traditions alive each time they plant crops or feed livestock.
Perhaps one of the most long-standing traditions – one that allows them to raise crops or cattle – is that of land rents and leasing.
After all, you can’t plant a crop or graze a herd if you don’t have the land to do it. And if you don’t have the land, you rent it from someone who does.
But it’s not as easy as telling your neighbor you’ll farm her ground, planting the crop, and going to town with the profits.
Whopping percentage. Land leases aren’t small potatoes in the Buckeye State.
Don Breece, an Ohio State farm management specialist, said around 60 percent of the farmland in Ohio is owned by someone other than the person who farms it.
That makes a huge impact on every agricultural community, he said.
Managers. The farm bust of the 1980s led to today’s trend of nonfarmers owning the state’s farmland.
For the farmer, that means more landlords to deal with, and more competition for land with other tenants.
“Piecing together farms gets to be a bit of a trick,” when you’re dealing with parcels owned by several landlords, said Bernie Erven, a retired Ohio State ag economist, during a discussion at Farm Science Review.
Adding to the mix are landlords who may not live in the community, may not understand farming, and family members – such as widows – who are suddenly a part of farming decisions.
“To be successful isn’t just what happens, it’s what’s managed. Both [landlord and tenant] have to recognize and work at it,” Erven said.
Tips and tricks. Erven said to forget tradition and get any agreements in writing.
“I remember as a boy in northwestern Ohio, everything depended almost entirely on tradition in my community,” Erven said.
“It was rare if anything was in writing,” he said, noting oral landlord-tenant agreements are still out there, but present special management considerations.
When you’re dealing with so many landlords, it’s easy to forget what you agreed on, Erven said.
Getting all management options – why pays for lime, fencing, drain tile – in writing also lets landlords who may not be familiar with those things learn about them firsthand.
Written agreements also let landlords stay informed about what’s going on with their property, and helps communicate an owner’s values to the tenant.
“If you still want the farm to look beautiful, let it be known. Tell them they have to mow the roadsides,” Erven said.
Tenants. Tenants have the challenge of understanding their landlords, and that means working the land and communicating with its owner.
“If you have 20 landlords, don’t pretend it’s two,” Erven said, noting it’s essential for tenants and landlords to communicate regularly and keep the lines open.
He suggests sharing harvest schedules, showing nonfarm landlords how you weigh grain, and other things farm folks often take for granted.
Keep landowners updated on your farm operation, too.
“Let them know you’re buying a new combine. Tell them what it costs for you to produce a crop,” if you think they’ll wonder if your rent is too cheap, he said.
Erven also said it’s the tenant’s responsibility to meet with each landlord annually.
“If a landlord isn’t important enough to you to sit down with once a year, how do you expect to build a good reputation in the community?” Erven said.
Breece adds that verbal rental agreements are valid up to one year. Any agreement that will last more than two years should be written, and leases for three years or more should be recorded in the county courthouse.
Most Ohio cropland rental agreements are annual in nature but have a rollover clause for the next year, Breece said. It’s doubly important to keep a good relationship with the landowner to have a better chance of getting to farm there the next year, Breece said.
More than farming. Erven also said it’s a good idea for tenants to recognize their landlords have other things going on in their lives than leasing crop ground.
Recognize major life events, Erven said, like anniversaries, deaths and sicknesses.
“Let the landlord know this is more than cash rent, more than corn and soybeans. It’s about people.
“People remember these kinds of things years after they happen,” he said.
(Reporter Andrea Myers welcomes reader feedback by phone at 1-800-837-3419, ext. 22, or by e-mail at amyers@farmanddairy.com.)