Lease Considerations When Transitioning to Organics

When making the switch from conventional farming to organic, overlooking the land lease agreement is done at both parties’ peril. Glennis McClure, Extension Farm and Ranch Analyst with the University of Nebraska, said there are many things to consider.

"The landowner may be especially concerned about maintaining productivity, protecting the organic status, and understanding what practices will occur," McClure noted. "The tenant needs enough flexibility and security to manage rotations, weed control, certification, and investments that may take several years to pay off. Both parties benefit from a written agreement that makes responsibilities and expectations clear.”

McClure said organic systems may require greater management intensity, labor and long-term attention.

“Conservation, fertility, weed control, manure or compost infrastructure that's involved, water, grazing, and long-term productivity," McClure said. "These conversations can prevent disagreements later because both parties understand what taking care of the land means to the other person.”

Several lease structures can be used during an organic transition.

“A cash lease is straightforward, but the tenant may bear much of the production and transition risks," McClure said. "In that case, a flexible lease may provide a way to recognize changing outcomes if both parties can agree on the adjustment mechanism. Crop share arrangements may require reconsidering traditional expense splits because organic production can add to costs. A multi-year lease can be especially important when the tenant is accepting transition risk or investing in soil improvements.”

Learn more by watching a recent webinar McClure hosted, by Clicking Here.

If you have a story idea for the PNW Ag Network, call (509) 547-9791, or e-mail glenn.vaagen@townsquaremedia.com