John Phipps: The Great Land Debate on Long-Term vs. Short-Term Leases
U.S. Farm Report 02/12/22 - Customer Support
From long-time viewer Don Wirth in Tangent, Oregon:
“I have said that part of the problem in the Midwest is the short-term leases. We have property here that our family has leased for close to 60 years with no fear of losing it. This allows it to be treated just like we owned it.”
Don, I almost didn’t read this letter because I kept thinking this is not something you should say out loud. It strikes me as tempting fate.
There is also the fact that tenant farmers all over the world struggle to solidify their hold on rented acres. When I was in England a few years ago, the Tenant Farmer Association had a top priority to make tenancy a minimum of ten years. We, too, have some ground that my family has rented for about seventy years, but such long-term leases are mostly a string of shorter-term leases, namely the lifetime of the heir. That actually highlights the underlying problem with rental security – it depends less on the tenant’s performance and even profitability and way more the owner’s health, family structure, and financial needs – any of which can change overnight.
More than one farmer career has been shattered by an untimely landowner death, divorce, or unexpected financial need, such as a job loss. Looking at enduring land tenure also suffers from survival bias – you only see the ones that fortune, or lack of misfortune, favor. Remember, virtually every successful renter means there were many more unsuccessful renter-wannabees.
Farm media generate pages and hours of content on how to achieve this kind of security, but the luck of kinship, location, and history still play an overwhelming role and cannot be calculated or taught. More farmland each year is leased for cash payments, not simply because owners are greedy, but because it makes the decision less difficult for them in many ways, and often coincidentally more lucrative. The complexity of farm programs, volatility in market prices, and bold competition also fuel this shift away from shared-risk traditional arrangements.
I agree with you, Don, but after 50+ years of trying wasn’t able to pry the right to select the farmer away from the landowner. What I find amusing is how quickly attitudes about rental terms change when an owner-operator becomes just an owner.
