LAFAYETTE COUNTY
14 E 19th, Suite 102
Higginsville, MO 64037
(660) 584-3658
(660) 584-3659
E-MAIL Lafayetteco@missouri.edu
http://extension.missouri.edu/lafayette
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March 9, 2012
Maximize Land Tenure While Minimizing Land Costs
Competition for tillable farm land is fierce. This fact is evident by the historic rental rates
that have been negotiated prior to this year’s corn and soybean planting season. Expectations
about the value of the 2012 crop have driven land rental rates to record levels. Given the stiff
competition for land, tenants who are concerned about land tenure and profitability should
consider strategies that will solidify their relationships with landlords while minimizing financial
risk. One strategy that will improve a tenant’s chances of retaining land tenure and decrease the
likelihood of future rent hikes is having a policy of open communication.
Communication is an often overlooked aspect of farm rental agreements that has a
significant bearing on the landlord/tenant relationship. Communication is the footing of trust, and
trust is the foundation of any relationship. Consequently, when communication between a tenant
and landlord is lacking, trust between the two parties dwindles. When a tenant is neglectful or
reluctant about sharing information related to farm maintenance, farming practices, or yield
results, he provokes suspicion on the part of the landlord. A suspicious landlord is prone to
compensate for his tenant’s lack of communication by raising the rent, or he will find a tenant
who is willing to share the information in which he is interested. Depending on how the landlord
deals with confrontation, he may quit the lease without much warning. (In Missouri, landlords
are required to provide a lease termination notice 60 days prior to the date of termination, but
even so, this notice can come as a shock to some tenants.)
While backlash from a landlord is sometimes warranted, it is also important for a
landlord to recognize the risks undertaken by a tenant and a tenant’s business privacy rights. A
tenant may see a landlord’s expectation to share information regarding his income and actual
costs of production as unreasonable. In a fixed cash rent lease situation, a tenant who does not
wish to share financial information should not be criticized. A landlord should respect a tenant’s
privacy on such matters. Of course, in a non-fixed-cash rent arrangement, where the rental rate is
dependent on revenue and/or production costs, all of the information used to calculate the rent
payment should be shared between both parties. The bottom line here is that a tenant should be
able to keep a ‘reasonable’ amount of privacy about his farming operation, but a landlord has the
ability to influence what is considered ‘reasonable.’ The information shared between the parties
involved in a lease will be unique, just as each landlord/tenant relationship is unique. The
important thing is to communicate expectations.
The benefits of open communication between a landowner and tenant are many. Open
communication builds trust, minimizes suspicion, reduces stress, lengthens tenure, stabilizes
relationships, reduces occurrences of costly lawsuits, minimizes undesirable surprises, and
increases both parties satisfaction with the lease. Having a policy of open communication does
not have to cost much, and the benefits will certainly outweigh the costs. Yes, communicating
takes time, but in the long-run, the time spent will pay huge dividends. Open communication
can produce peace of mind, and, these days, peace of mind is worth a lot.
For more ideas and information about how to foster open communication, including
instructions for developing a farm newsletter and farm resume, contact your local MU Extension
office or visit extension.missouri.edu.
Whitney Wiegel
University of Missouri Extension
Agricultural Business Specialist
14 E. 19th St., Suite 102
Higginsville, MO 64037
660-584-3658
660-584-3658 (fax)
wiegelw@missouri.edu