Typical rental forms with provisions for several types of leases are available. See publications FM 1538 (AgDM C2-12) Iowa Farm Lease Form or FM 1874 (AgDM C2-16) Iowa Cash Rent Farm Farm Lease (short). Some agreements pay the custom trader a bonus for achieving certain planting date or yield goals. Others provide that instead of a cash payment, the farmer receives a percentage of the crop, usually between 20 and 25 per cent. This is sometimes called “net stock leasing.” When the custom operator assumes responsibility for the purchase and supply of plant inputs, the cash payment or share of the crop is generally higher. Publication FM 1823 (AgDM A3-15), Custom Farming: an Alternative to Leasing has more details. File xlsx Use this decision tool to estimate returns to a landowner and tenant under various leases, including cash rent, flexible rent, harvest share or a custom farm contract. The disadvantages and potential problems of the fixed-rate lease are: Iowa law sets out three methods to terminate an operating contract to terminate the lease on March 1. The following is cited in the Iowa Code, Section 562.7: Fertility Farm Owners often worry about whether a tenant maintains or improves the fertility level of the farm. Regular soil studies determine whether additional nutrients are needed. While tenants should be discouraged from “degrading the soil” and applying additional fertilizers (including phosphorus and potassium) when levels are already high or very high, it not only wastes money, but also contributes to nutrient removal and downstream pollution. Fixed Cash Lease Under a fixed cash lease, the tenant pays a certain amount of rent in cash per hectare per year for the exploitation of agricultural resources.
The owner may impose certain restrictions on crops that can be grown or on conservation, conservation and pest control practices that can be applied. In addition, the tenant has carte blanche to plan the livestock harvesting and production program on the farm unit and receives all harvest payments and corresponding payments from the USDA product program. Good communication between tenants and landowners is essential to establish a successful leasing relationship. Landowners are concerned about the use and maintenance of their farm. Non-resident owners cannot meet the conditions first-hand. Some spouses or children who have not been involved in the management of the property may feel unsure of how to make decisions.