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South Central PA | I'm sure it happens here on the East coast but I just don't hear of sharecropping occuring around here. How many of you guys do it and how do you like it compared to a traditional land lease. Also how do some of you guys divide costs with the landowners? |
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| I farm in Southern Illinois. IMO, "sharecropping" is the traditional lease in my region. Within the last 10 to 15 years however, cash renting arrangements have become more and more common. Today, I cash rent more of my rented acres than crop share. In the corn belt areas of IL, it is my understanding the majority of the rented ground is leased on a cash rent basis. That may vary depending on the region.
I have heard of 50-50 and 60-40 and 2/3-1/3 ( in the latter two, the tennant gets the larger share) crop share leases. Often the input expenses (seed, fert and chem) are shared consistently with the grain split. Individual deals vary with the circumstances of the people involved. |
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| I'm on the landowner side this year. I believe that with the price volatility of the seed, fertilizer, herbicide, and especially the grain markets that a crop share is the only way to achieve an equitable split in profit between landowner and tenant. Its impossible a year in advance to set a cash rent to accomplish that and its easy to grab for a high cash rent that guarantees the tenant loosing money. Then unless the total rent is collected up front, there is considerable danger than the tenant may be be able to pay the agreed to price. So it has to be renegotiated or litigated.
Some modify the cash rent with a bonus based on crop sales, and sometimes that can be written so it doesn't add the FSA office complications of pure crop share (where the government payments are also shared).
I pay 1/2 the seed, fertilizer, and herbicide, and I get half the crop delivered to the nearest elevator. My tenant puts his half in the elevator too so the elevator does the split and I do the merchandising of my half.
Gerald J. |
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Lewisburg, PA | I'm also looking at some crop shareing but am wondering who pays for drying ? I think it should be split also . Luke |
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Texas & western Iowa | I have the same set up as Gerald. Tenant supplies equipment and labor. I supply land. We split inputs and product 50/50. We each pay for our own share of drying and each market our own grain.
If there is a negative in this type of arrangement it is in the area of trust. Since I live in Texas and my place is in western Iowa I can't always be there to see exactly how much comes out of the field. When everything is in I call the elevator to see what my 'share' is. I have no way of knowing if what they show is truely half. Same with inputs. Since my tenant also farms some of his own ground I can't be sure that some of what I pay for doesn't go to his ground. Keeping detailed records is a must. Any large descrepancies should be questioned.
Edited by PRNDL 12/24/2009 13:17
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| drying and shrink should be split out as well, as well as hauling. |
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West Texas | Who gets any government payment? |
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NEMO | gov. payments are split the same % as the grain is sold. |
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Texas & western Iowa | farmerboy50 - 12/24/2009 12:58
Who gets any government payment?
Split between tenant and myself. |
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| Drying is done after the crop split at the elevator, so I pay drying and storage if I don't sell right away. If I had drying on the farm, then that cost would have to be negotiated, maybe an even split of fuel cost but I have to have made a greater investment in equipment to have bins and dryer.
Hauling to the elevator in MY contract is the responsibility of the tenant. A slight warp in my favor. A more even split would split that cost too.
Gerald J. |
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sharecropping
