Sustainable farm lease options

lease options

Investing back into land improvements

Sustainable leases allow for leasing land and investing some income into land improvements. Allowing the land to be managed in a sustainable manner.

Sustainable leases can be implemented that is fair to both the landowner and operator/tenant.

Options for sustainable lease; Factors to consider;

  1. Production risk
  2. Market risk
  3. Capital/financial risk
  4. Rate of return
  5. Control of assets

Types of lease/sharefarm/alternative lease:

  • Lease – % of land value. Usually between 4-7% return.
  • Sharefarming – varied responsibility of involved parties.
  • Contracting – outsource all management services, cropping, spraying and harvest.
  • Joint venture/collaboration farming – synergies of businesses to deliver efficient operations with specialist areas.
  • Equity Sharing Lease – opportunity to hedge the production risk between the operator/tenant and owner/landholder. The equity arrangement provides a level of risk acceptable to both parties.