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Add Conservation Addendum to Farm Lease

by Jason Johnson, Public Affairs Specialist, USDA-Natural Resources Conservation Service

More than half of Iowa farmland is cash rented or crop shared, an upward trend that raises many issues for both landowners and tenants, not in the least of which is who is responsible for the farm’s conservation plan.

A new project through the Allamakee Soil and Water Conservation District (SWCD) brings landowners and tenants together to make sure both parties are on the same page. The SWCDs Conservation Lease Project adds a conservation addendum to a farm lease.

Sara Berges, Lease Project Coordinator with the Allamakee SWCD, says the addendum typically includes an updated conservation plan and a conservation plan map. Other information could include information about conservation compliance, nutrient management, conservation practice installation responsibilities, and crop residue amounts.

“By attaching the conservation plan to the lease, both the landowner and tenant are more aware of what is written in it and when changes need to be made,” said Berges. “Getting them together gives all of us an opportunity to review the conservation plan annually when they review their leases.”

Good Communication = Better Land Stewardship
According to Ed Cox with the Drake University Agricultural Law Center, there is a direct correlation between good communication between landowners and tenants and a tenant’s confidence in their land tenure and the security of conservation investments they make in the land.

“It also requires the parties to think about their own priorities for the land,” said Cox, “to recognize any concerns of the other party, and ultimately negotiate a lease contract that meets the needs of both parties.”

He says the addendum could include just about anything either side wants to add, but obviously both parties need to agree and sign the addendum. “If wildlife viewing is important, the conservation provisions could be drafted to protect nesting habitat,” he said. “If water quality is a concern, provisions could be included that require vegetative buffers.”

Through the project, Berges attends meetings with the landowner and tenant. She says these meetings encourage open discussion about each of their goals and priorities for the land. “We talk about types of equipment, crop rotations, erosion issues and length of the lease,” she said. “Written lease terms regarding conservation allow decisions to be made before potential problems arise.”

Berges said just recently a renter failed to comply with a conservation addendum by not installing waterways, which was specifically identified in the lease. “They talked about it on their own and worked it out,” she said. “The good thing is they have a map showing precisely where waterways should be, and the landowner can refer to the map in the addendum.”

Current conservation compliance requirements often represent the bare minimum conservation standards, says Berges, which can prompt many landowners to add requirements. “A conservation addendum gives the landowner the ability to enforce conservation compliance on their land,” she says.

Cox emphasized that farm leases are a contract that bestow possession of the land to the tenant, but landowners ultimately have control over how their land is to be managed. “Landowners can put restrictions in place to make sure conservation concerns are addressed,” he said. “However, it is important for them to recognize and understand that conservation does have costs, and lease contracts can also be used to share the costs and risks with farm tenants.”

LuAnn Rolling, who has served as USDA-Natural Resources Conservation Service (NRCS) district conservationist in Waukon for 26 years, says adding a conservation addendum to the farm lease can benefit both the landowner and tenant, and “we make it clear that we are not there to negotiate rental prices,” she said.

What a Landowner Might Include
Rolling says many landowners don’t realize they have a say in how their land is farmed once it’s rented. For example, even though state law says corn stover belongs to a renter, a lease agreement can negate that. “Most don’t realize the tremendous amount of nutrients leaving cropland when stover is harvested,” said Rolling.

Other items a landowner might add to a conservation addendum include:

  • Soil/organic matter testing protocol that requires minimum levels are maintained.
  • Clearly defining minimum or reduced tillage. Specific requirements must also clearly state the consequences for not following the plan.
  • Clearly stating how conservation practices are maintained, i.e. grassed waterways, terraces.

What a Renter Might Include
Likewise, a renter could include these various items in a conservation addendum:

  • If a landlord requires conservation practices such as grassed waterways and field borders, those acres that the USDA-Farm Service Agency (FSA) lists as no longer farmable can be recalculated in the total number of farmable acres, potentially reducing rental rates.
  • Increases in input costs, such as fertilizer, and a lowering in commodity prices could lower future rental rates.
  • If a landlord requires hay in a rotation, the expense of a hay seeding and longevity and tenuousness involved is a high risk to renters and could discount the rental rate.

Cox says landowners that intend on passing down their land to their heirs, who may not be farming, should consider sitting down with them and their farm operator to discuss why the land is farmed the way it is and what is needed to ensure that stewardship continues when they receive ownership.

He also recommends contacting an attorney to draft the farm lease document, and to establish priorities to ensure they are addressed in the contract. Cox is available to answer your questions at 515-271-2205 or through email at edward.cox@drake.edu.

You can contact your local NRCS/SWCD office to review your current conservation plan.

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Conservation Farm Lease Contract Demo Receives NRCS Innovation Grant

Drake University’s Agricultural Law Center received a 2013 Conservation Innovation Grant (CIG) through USDA’s Natural Resources Conservation Service (NRCS) to demonstrate the benefits of using conservation-oriented lease contracts. The Center will work with five sets of landowners and tenant producers in the Upper Mississippi River Basin, including Iowa, now through Aug. 31, 2014.

The goal of the project is to demonstrate that negotiation, implementation, monitoring, and even enforcement and amendment of innovative farm lease contracts will address a suite of environmental concerns. These could include soil health, nutrient management, or wildlife habitat preservation.

Participants will provide monthly reports and two video interviews addressing each step in the leasing process, as well as background information about their land, experience in agricultural production, farm management, and needs and concerns regarding the land and operation.

The CIG program is voluntary and intended to stimulate the development and adoption of innovative conservation approaches and technologies. CIG enables NRCS to work with public and private entities to accelerate the transfer of technology and to adopt new technology to address pressing natural resource concerns.