2013 LOGAN COUNTY FARM OUTLOOK MAGAZINE LINCOLN DAILY NEWS.com October 25, 2013 Page 15
With the advent of tough
economic times, it is becoming
more common for people to rent
a property or rent-to-own their
possessions. The practices of rental
agreements extend into the farming
community. Those farmers who do
not own the land that they work,
or the equipment they use, turn to
rental agreements such as cash rent
or share rent in order to keep their
farming business running more
smoothly.
The questions before us now are:
How much success comes with
these agreements? Is there a trend
between the two?
In order to find answers, we have to
start with an established definition
for these types of land agreements.
Cash rent involves property
rental in which the farmer pays
the property owner a lump sum
per year for use of the farmland.
In addition, the landowner may
supply extra resources along with
the use of the land. Crop marketing
and the timing of input purchases
fall as the responsibility of the
tenant, along with the management
of tasks associated with federal aid.
Share rent, or sharecropping as it
is also called, is similar to cash
rent, save that the landowner gets a
share of the resulting crop. Under
this type of agreement, the farmer
and landowner share crop revenues
and production costs; however,
both parties also share the financial
risk.
With these definitions in mind, we
turn to experts such as economist
Nick Paulson and Professor Gary
Schnitkey. Paulson and Schnitkey
both provide findings on these
agreements via the University of
Illinois Agricultural Extension and
their farmdoc project.
In 2011, the University of Illinois
Agricultural Extension began
looking for a trend concerning
these practices. According
to those findings, cash-rent
levels increased by 70 percent
between 1990 and 2010.
Increasing cash-rent levels
represented a concern for
farmers in Illinois. Between
1990 and 2010, the average
cash rent in Illinois increased
from $100 per acre to $169
per acre, according to the
USDA.
What do
the trends
tell about
cash rent
vs. share
rent?
Story by Derek Hurley
