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Tenant farmers, land owners need to communicate

March 26, 2012|By JEFF SEMLER
  • Jeff Semler
Jeff Semler

The role of the tenant farmer is to keep land open, in high fertility and weeds under control.

This is a service to the landlord and the tenant’s pay is the sale of his crops.

While the tenant is caring for the land, the land is appreciating and the landlord will reap the benefit of this appreciation.

If you say my tenant doesn’t do that, then you need to have a talk with them.

They are stewards of all land, both owned and rented.

Secondly, by farming your land, your tax assessment as agricultural land is secure — rezoning by your own petition or that of a government body withstanding.

Don’t get me wrong, there are a great number of excellent landlords out there. There are a few scoundrels just as there are farmers who are less responsible.

My main point here is oftentimes landlords feel it is the tenant’s responsibility to pay for the landlord’s costs of owning land, taxes and insurance, for example. That is what is known as the cost of owning land and those costs will be more than covered by the land appreciation even if it is the heirs who reap that benefit.

A caveat here is buildings are an exception since to the landlord this is a depreciable asset and there are maintenance costs. I look at this as similar to renting an office or warehouse space.

Now is when farmers might want to stop reading. Farmers need to remember the old saying, “If we don’t hang together, we will surely hang separately.”

I hear about neighbors out-bidding neighbors for land that the one neighbor was already renting. I have also heard of bidding wars. Recently, a price of farm land came up for rent and I understand the rent was extremely high.

The problem, once others hear the rental rate, they will think their land is worth that, too.

I know the price of corn is up right now, but it has been low for many previous years and while rent goes up now when corn prices are high, I doubt the rate will drop when the price of corn drops.

The moral to my tale today is walk a mile in the other man’s shoes.

While crop prices are on the rise, prices have been low. In addition, costs are rising, too.

Fuel and nitrogen fertilizer are approaching new record highs.

So tenants and landlords need to keep open lines of communication and work together for everyone’s benefit.

Jeff Semler is an Extension educator, specializing in agriculture and natural resources, for the University of Maryland Extension. He is based in Washington County. He can be reached at 301-791-1404, ext. 25, or by email at jsemler@umd.edu.

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