|
Farmland needs to be promoted as a sound investment, but one
that provides a good return over a course of years rather than
on an annual basis. When farmland owners seek the highest
possible annual return they are actually harming the long-run
return on their investment. Farming land intensively for
short-run profit strips the soil of nutrients that harms land
productivity for years to come, which will harm future land
value. Farmers Supporting Independent Agriculture
"Promoting local economics through a faith-based framework
that seeks to establish relationships between landowners and
local farmers," Farmers Supporting Independent Agriculture is a
faith-based community organization that represents the interests
of family farmers and local communities throughout central
Illinois. FSIA was started by family farmers in Logan County who
wanted to participate in decision-making that directly affects
them and their communities. FSIA works to ensure the survival of
family farms, preserve the local economy and promote sound land
stewardship practices.
The organization advocates the following:
End highest bidder cash rent
In a cash rent contract a landowner rents farmland at an
established cash price to a tenant farmer for a certain time
period. The landowner receives rent payment, and the farmer
bears all risk associated with either good or poor harvest. A
landowner can maximize his annual return by charging the highest
cash rent price that a tenant farmer can bear to pay. This
practice typically prices local tenant farmers out of the
market, and absentee mega-farmers step in to pay the high cash
rent and farm the land. The problem is that when an absentee
mega-farmer pays a high cash rent price, he will farm the land
in a manner that will offer the best chance at the greatest
annual profit. This often means that the mega-farmer neglects to
properly fertilize the land and improve the soil in an effort to
minimize his own costs. With fewer costs the mega-farmer’s own
return will be largest. The long-run fertility of the land is
compromised for short-run profit. The farmers who can afford to
pay the highest cash rent prices are not always the best at
maintaining land fertility and value.
Disclose cash rent calculation method
Cash rent prices need to be calculated by using a formula
that accounts for farmland productivity. Highest bid cash rent
prices can fail to account for land productivity and the
important role of the farmer in maintaining the productivity of
the land. By disclosing the formula that is used to calculate
cash rent prices, local farmers can be sure that cash rent
prices are not being determined by highest bid. Highest bid cash
rent accelerates the increase of cash rent prices as farmers
resort to irrationally high bids in order to secure land to
farm. At the highest prices, it is virtually impossible to farm
without taking a loss if the land is fertilized and maintained
correctly.
Require lease-back on farmland sales
Lease-back options help keep local farmers farming local
land. A leaseback is a requirement on a farmland sale that the
new landowner honor the contract and existing relationship
between landowner and current tenant farmer. Local tenant
farmers lose the land that they farm when the new landowner
chooses a new tenant farmer who will pay highest bid cash rent.
Highest bid cash rent provides an entry point into the community
for absentee mega-farmers who farm the land for short-run
profit, neglecting the long-run fertility of the land. The sale
of farmland should not harm local communities by forcing local
tenant farmers out of work.
[to top of second column in this article] |
Create information network to link local tenant farmers to
landowners
A network that links local tenant farmers to landowners would
benefit both local farmers and landowners, along with benefiting the
local community. In rural communities, local tenant farmers are in
search of land to farm. New farmland owners are in search of farmers
to farm their newly acquired land. Local tenant farmers have a
vested interest in farming local land in an environmentally sound
and productive manner. Many times, landowners lease farmland to
absentee mega-farmers without recognizing that there are also local
farmers who would farm the land in a sustainable manner. By sharing
information, landowners will have more local farmers from which to
choose to farm and protect their investments, and local farmers
looking for land to farm can be matched with landowners looking for
local farmers who will be good stewards of the land.
Use tenant quality metric to measure the quality of tenant
farming practices.
A tenant quality metric should be used to measure the quality of
tenant farmers. A measurement that accounts for the land stewardship
practices and crop output of tenant farmers would be a valuable tool
for farmers, landowners and financial institutions. There is no
guarantee that a particular farmer is a good farmer who will farm
the land in a manner that does not harm the long-run value of the
land.
An empirical measurement will help protect landowner and farmer
by providing information that is not formally available, which can
then be used to help determine which tenant farmer the landowner
should choose. The long-run productivity and value of farmland is
crucial for the survival of rural communities and is also important
for farmland owners and financial institutions. Any means of helping
ensure that farmland retains its productivity would be of
significant value.
The next meeting of Farmers Supporting Independent Agriculture is
at 7 p.m. Tuesday at the Logan County Farm Bureau, 120 S. McLean St.
in Lincoln. For more information contact Larry Huelskoetter at (217)
949-5471, biglar@dtnspeed.net
or Joel Janisewski at (309) 830-2233,
joelj@springnet1.com.
[Farmers Supporting Independent Agriculture
news release]
 |
