Posted 8/1/2020 14:38 (#8409046 - in reply to #8408951) Subject: RE: Land Lease Agreement
Your location would help....
If you are responsible for all expenses, I assume that means you get all the income from all crops?? And if that is the case, you are exposed to all the market and weather risk? If that is the case, you are the farmer on that property. The only way around that I can see is some kind of share rent arrangement, where you would still both be considered "producers" or "farmers".
For USDA farm program payments, the payments are either based on acres or bushels, and either the owner or the renter gets the payments, or the payment can be divided by some percentage for a share rental contract. That decision is made before signup, and the rental contract must be provided to your local FSA office to prove that decision to be correct.
For Ag property tax relief in Ohio (CAUV), leasing has nothing to do with it...as long as it is farmed, the property owner gets the reduced tax rate, as they should, no matter who farms it.
The bank just needs to understand your farm business loan needs and repayment ability...they shouldn't care if it is leased, custom farmed, shared, or whatever.
Both you and the owner need to pick your poison...who pays expenses and who gets income, thus bearing the risk? That should make the decision on who the "producer" is for USDA. Either that or do a share rent. You both can't have it both ways. Again, if you pay the expenses and you get the income from crop sales, you are the farmer, and you pay the owner rent and a tillage fee. If the owner pays expenses and gets the sales income, then you are the custom operator for his farming operation.
Or do share rent and he gets a % of the sales income and furnishes land and tillage for his share, and you get a % of income and furnish all other expenses for your share. Gov't payments (here) would be divided accordingly.