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Percentage with young renter ...
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Posted 5/2/2021 19:39 (#8983814 - in reply to #8980973)
Subject: RE: Percentage with young renter ...

Really a share crop arrangement can be anything that both parties agree on.

You could structure it so that you pay all of the inputs, he uses your equipment and gets a % of the crop for doing the work.    You could do that for a few years for him to get built up a little and then maybe move towards a more normal share crop agreement with him paying his share of the inputs.    Eventually you could possibly start selling him your machinery as part of your exit plan.

Doing the share crop %'s for crop insurance and FSA isn't difficult at all.    You get the govt payments for your share and he gets the payments for his share.    You insure your share however you want and he insures his share however he wants, it would help to deal with the same company and agent though.    What could possibly be a big benefit for him being share crop with you is that he gets to use your yield history for crop insurance.

I really applaud you for wanting to help a new guy get started.   

Edit to add, some states have income tax incentives (for the landlord) for renting ground to a beginning farmer.    I know Iowa does and the tax break is higher for a share crop lease arrangement than it is for a cash lease.   Might want to check into that for your state, your accountant should know if they are well versed in farm accounting.

Edited by Kooiker 5/2/2021 19:43
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