Share Rental Agreements
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Last week, cash rental agreements were discussed and now crop share rental agreements. For crop share rental agreements, both landowner and tenant share crop expenses and also the crop. This involves much more involvement of landowners in the farming operation. The landowner has the land while the tenant supplies the labor and the equipment for farming the crop. Since the landowner has more risk, usually the return is expected to be higher, but they also have to have more cash outlay. For newer farmers or for cash strapped tenant farmers, this can be helpful, lowering the tenant cash outlay and risk, but the tenant should expect lower total returns. Share crop agreements are much more contentious and require more time to manage. It requires more trust and transparency into more farming decisions. Since market conditions vary from region to region and from year to year, they often have to be renegotiated on a yearly basis...