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Farmland rental rates increasing? Land stewardship may trump price.

Published Feb. 24, 2011 | Discuss this article on Facebook
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Chad Endsley provides an explanation why some farmers may see land rental rates increase.

Buckeye Farm News

Interest in renting farmland continues to be strong, as some farmers look for more land to try to take advantage of high crop values.

The result is that farmers may see rental rates go up in Ohio, said Chad Endsley, Ohio Farm Bureau’s director of agricultural law. Experts said farmland rental rates are 5 percent to 10 percent higher than previously.

Endsley provided an explanation of the situation after OFBF had been contacted by members through Facebook with concerns about farmers being outbid for land they had long been renting.

“With corn prices over $6.50 per bushel and soybeans over $14 per bushel, farmers are aggressively trying to acquire more land either by purchasing or renting it,” Endsley said.

Another reason why rental rates may be going up is the recent increase in the Current Agricultural Use Valuation (CAUV). Some landowners may be trying to make up for the higher CAUV taxes by increasing their land rental rates, Endsley said.

For farmers who have oral rental agreements, it could be difficult to avoid the rent increase, he said. The best way to protect your interest is to avoid “handshake deals” and have a written contract signed by both parties with specific terms such as a termination date and written notice of proposed contract changes, Endsley said.

Because Ohio does not have uniform termination dates, affected parties usually look at what is customary in their area, he said. Farmers should try to seek compensation if they already did preparation work for their crops such as putting in a cover crop or fertilizing it.

If somebody submits a higher rental bid than you, talk to your landlord about it and point out the non-financial benefits that you may be providing, Endsley said.

“You may be well served to highlight some of those benefits,” he said. “You can talk about how you’ve been a good steward to the property, how you’ve replaced nutrients and maintained soil fertility. What conservation practices you have installed, how you’ve help control soil erosion. You can talk about whether you took action to control weeds, repaired damage to the property. If you have done things particularly well, the other farmer may not have the same track record.”

In the case that disputes arise that aren't easily remedied, contact a local attorney to see if there is a solution, Endsley said.

ONLINE EXTRAS:

Listen to Ohio Farm Bureau's Chad Endsley provide an explanation for an increase in farmland rental rates.

Learn how CAUV works and why values are rising in some counties.



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